Why Stablecoins Win Without Yield

Under the GENIUS Act, stablecoin issuers cannot offer yield to consumers. That’s because lawmakers want to separate payment instruments from investment products.

So if the coin doesn’t pay, why would anyone use it? The answer is very simple: stablecoins can move money better.

Stablecoins look set to become one of the most efficient ways to transfer US dollars, especially now that they will operate under proper regulation. They will allow value to move across borders and platforms faster, cheaper, and more predictably than traditional banking rails.

An improvement on traditional payment rails?

Most cross-border retail payments still run on correspondent banking networks. Delays, hidden FX fees, compliance checks, and cutoff times are routine. For anyone earning or spending in more than one currency, these issues show up as daily friction.

Stablecoins will bypass that, at least in theory. They move 24/7, settle in minutes, and don’t depend on local banking hours or liquidity windows. They’re especially useful for people who want to hold dollars but live in places where access to USD might be slow, expensive, or restricted.

None of that depends on yield. The coin doesn’t need to appreciate. It needs to settle accurately and stay redeemable.

Payments, not performance

Yield is prohibited under GENIUS, and marketing can’t imply otherwise. That changes the incentives, but not the utility. In practice, stablecoins will be widely used for things like:

• Settling international freelancer payments

• Funding overseas tuition

• Moving savings between family members in different jurisdictions

• Avoiding delays during public holidays or banking outages

• Maintaining exposure to dollars without needing a US bank account
  
  

None of those cases depend on earning interest. They do depend on timing, cost, and liquidity.

The issuer earns the yield on reserves

GENIUS requires stablecoin issuers to hold reserves in liquid, low-risk assets. In practice this will mostly be short-term Treasuries and US dollars. The yield from those reserves funds operations: custody, compliance, audits, and reporting. Retail users don’t earn that yield, but they do benefit from what it pays for.

If issuers were allowed to share that yield, they’d be running investment products, not payments infrastructure. GENIUS prevents that confusion.

The benefit for users is going to be crystal clarity in payments. They know what the token is, what it’s worth, and when it can be redeemed.

Settlement with finality

Stablecoins will be used by platforms as a fast settlement layer. When a user receives a transfer or disburses funds to a contractor, the transaction settles immediately and irreversibly. That’s different from a card payment, which can reverse days later. It’s different from a wire, which might get stuck for review.

This simplifies reconciliation and reduces operational load. It will also improve user confidence. That alone is going to help drive adoption.

A shift in the model

In a yield-free model, stablecoins resemble digital cash. That works for neobanks. Most customers treat their checking balances as functional money, not as a store of wealth. Integrating a GENIUS-compliant stablecoin doesn’t change the core proposition.

For neobanks, stablecoins will be indispensable infrastructure. They will use them because they work. Stablecoins will shorten delays, reduce costs, and increase control when moving money, and that’s why consumers will want to use them, too.