Who Pays Stablecoin Yields and Who Can Cut Them

Congress and regulators have changed how dollar-pegged tokens earn yield. The GENIUS Act, enacted in 2026, bars permitted payment stablecoin issuers from paying holders interest or yield for simply holding the token. That prohibition left exchanges, wallets and payment platforms as the parties that now deliver customer returns. The Office of the Comptroller of the Currency proposed a rule in February 2026 that would create a rebuttable presumption against yield paid through issuer affiliates and related third parties. The Senate scheduled a procedural vote for Sept. 15, 2026 that could affect whether affiliate-paid rewards remain permissible.

Section 4(a)(11) of the GENIUS Act separates issuers from distributors. Issuers retain interest earned on reserve assets; distributors such as exchanges and wallets arrange payments to customers from their own revenue or from revenue-sharing agreements with issuers. Circle, the issuer of USDC, does not pay interest on USDC balances; some platforms using USDC have offered multi‑percent yields by rebating part of the issuer’s reserve income or by using other revenue sources.

The OCC proposal targets arrangements in which issuer revenue flows to an affiliated distributor and then to a customer. If the rule is finalized as proposed, many current rebate structures would face legal hurdles because regulators would begin from a presumption that affiliate-paid yields are impermissible unless rebutted. The Senate vote is part of broader legislative negotiations that include the CLARITY Act provisions on digital assets.

Market offerings that advertise similar headline rates are backed by different mechanisms. Custodial rewards typically reflect a platform sharing income it receives from issuers or other revenue. On-chain savings often route balances into lending markets, governance-directed protocol fees, or derivatives strategies that generate funding-rate income. Centralized lenders use unsecured lending books. Each approach has different operational and market risks.

Examples in market illustrate those differences. Coinbase’s USDC Rewards has rebated part of the reserve income Coinbase receives and reported rates in 2026 roughly between 3.5% and above 4%; the rate is set by Coinbase, can change without notice, and balances are claims on the company rather than insured deposits. Base App, the rebranded Coinbase Wallet, pays a similar rebate into a self‑custodial balance, has advertised rates up to about 3.35% in some markets, requires a linked Coinbase account in the U.S. and is not available in the EU or Canada.

MetaMask’s Money Account issues a separate dollar token, mUSD, and places those balances into on‑chain lending vaults; the yield varies with lending market conditions and requires conversion into mUSD. Nexo and comparable centralized lenders offer higher advertised rates tied to unsecured lending books and loyalty tiers; depositors in those products become unsecured creditors of the platform. Sky’s sUSDS savings rate is set by token governance and paid from protocol revenue such as stability fees and real‑world asset returns; recent rates sat in the mid‑3% range. Aave supply rates come from borrower interest in overcollateralised pools and commonly move within a 3% to 5% band depending on utilisation. Ethena’s sUSDe relies on the perpetual futures basis trade and has shown wide historical volatility, including deeply negative returns during some periods.

All major options differ from bank deposits. None of the products compared here carry FDIC insurance; stablecoin balances are claims on issuers rather than insured deposits. Custodial rewards can be revoked, restricted by region, or altered by a platform at its discretion. On‑chain models expose holders to smart contract, protocol and market risks. Terms and eligibility vary by jurisdiction, product tier and whether a program requires swapping into a different token or locking funds.

Market participants, legal advisers and firms that offer yields are monitoring the OCC rulemaking and the Senate calendar because a final rule or legislative outcome could limit affiliate-paid yields. Industry disclosures and product terms advise users to check who pays the yield, how the returns are generated, the custody arrangement and the withdrawal terms before depositing funds.