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Effects of Stablecoin Yield Prohibition on Bank Lending
The GENIUS Act, signed into law in July 2025, requires stablecoin issuers to maintain reserves backing outstanding stablecoins on at least a one-to-one basis. Reserves may only consist of certain specified assets, including US dollars, federal reserve notes, funds held at certain insured or regulated depository institutions, certain short-term Treasuries and Treasury-backed reverse repurchase agreements, and money market funds. It also prohibits stablecoin issuers from offering any form of interest or yield to stablecoin holders, but does not explicitly prohibit affiliate or third-party arrangements that might offer ... (full story)