Yielding Stablecoins Set for Growth

Yielding stablecoins, including tokenized U.S. Treasuries, are projected to grow significantly, possibly making up 50% of the stablecoin market, as per a new report by JPMorgan analysts.

Currently, yielding stablecoins account for only 6% of the total stablecoin market cap. However, analysts led by Managing Director Nikolaos Panigirtzoglou forecast a substantial increase in their market share unless regulatory changes occur.

Since the U.S. elections in November, the combined market value of the leading yielding stablecoins—Ethena’s USDe, Sky Dollar’s USDS, BlackRock’s BUIDL, Usual Protocol’s USD0, and Ondo Finance’s USDY—has surged from approximately $4 billion to over $13 billion.

This upward trend is anticipated to persist, partly due to the U.S. SEC’s recent approval of Figure Markets’ yielding stablecoin, YLDS. Unlike conventional stablecoins, YLDS is classified as a security, which analysts believe could expedite the adoption of yielding assets.

Traditional stablecoins such as Tether’s USDT and Circle’s USDC do not offer reserve yield distributions to users, as doing so would configure them as securities, thereby imposing strict compliance regulations, according to JPMorgan analysts.

*This is not investment advice.