thecoinrise.com
The supply of yield-bearing stablecoin has sharply increased following the enactment of the GENIUS bill in July, which prohibits issuers from offering direct yields to holders.
Despite the regulatory restriction, decentralized protocols have continued to offer attractive returns through staking, fueling demand for tokens like Ethena’s USDe and Sky’s USDS.
Since July 18, the circulating supply of USDe has jumped by 70%, reaching 9.49 billion coins, according to DefiLlama data. This rise has elevated USDe to the third-largest stablecoin by market capitalization. Meanwhile, USDS’s supply has grown by 23% to 4.81 billion, making it the fourth-largest stablecoin in circulation.
The surge in demand for USDe has also had a positive effect on its governance token, ENA, which has rallied nearly 60% since mid-July. ENA is currently trading at $0.58, according to CoinMarketCap.
Investors Shift to Protocol-Based Yield Models
The growth of these assets appears to be driven by an investor pivot to protocol-based yield mechanisms, which remain legally viable under the GENIUS Act. By staking stablecoins within the protocol’s native system, tokenholders can still earn passive income.
“Surprising winners in a post-GENIUS era — yield-bearing stablecoin supply is up a TON,” wrote Anthony Yim, co-founder of blockchain analytics firm Artemis, in a post on X.
Julio Moreno, Head of Research at CryptoQuant, echoed this view, stating that investors are “flocking to USDe and USDS” because they offer yield in a more compliant and decentralized way. “The GENIUS Act banned issuers from offering yield directly, but protocols offering native staking options are filling that gap,” he told Cointelegraph.
These staking mechanisms often leverage real-world assets, such as U.S. Treasurys or lending platforms, to generate returns. Currently, staked USDe (sUSDe) offers a 10.86% APY, while staked USDS (sUSDS) yields 4.75%. Adjusted for the U.S. inflation rate of 2.7% in June, this gives real returns of 8.16% and 2.05%, respectively.
Stablecoin Market Eyes $300 Billion Milestone
The total stablecoin market has grown from $205 billion at the beginning of 2025 to $268 billion, a 23.5% increase. Julio Moreno believes that if the current pace continues, stablecoin supply could reach $300 billion by year-end.
However, Temujin Louie, CEO of Wanchain, warned that tokenization of money market funds by traditional finance players could limit this growth. As financial institutions adopt blockchain for regulated, interest-bearing products, stablecoins may face increased competition.
Even so, the recent spike in yield-bearing stablecoins suggests that decentralized finance remains a compelling alternative for yield-seeking investors navigating a post-GENIUS landscape.