GENIUS Act May Redirect USDT Capital Toward DeFi, Potentially Boosting Institutional Yield Opportunities

Key Points

1. The GENIUS Act restricts stablecoin yields, pushing institutional capital toward DeFi platforms offering programmable yield and liquidity.

2. DeFi platforms, such as Aave’s aUSDT and Ethena’s sUSDe, are gaining traction as alternatives for yield-seeking investors.

3. Tokenized assets and yield-bearing stablecoins in DeFi have collectively surpassed $10 billion in market capitalization.

4. Traditional finance may compete with DeFi by developing regulated platforms that mimic DeFi functionalities, while banks like JPMorgan Chase and Citi could issue stablecoins.

5. The GENIUS Act is expected to catalyze growth in the crypto ecosystem through institutional engagement, hybrid TradFi-DeFi platforms, and mass adoption of bank-issued stablecoins.