Digital Dollars Will Pay Interest — By the Back Door
Stablecoins won’t be allowed to offer returns, so their users will earn yields via tokenized money-market funds.
There is a case for interest-earning crypto dollar.
Photographer: NurPhoto/Getty Images
This year is proving to be something of a “ChatGPT moment” for stablecoins. But while the excitement is palpable, their utility is still unclear. They are useful to exchange fiat money for speculative assets like Bitcoin. However, outside the world of cryptocurrencies, why would anyone want to hold tokens that are prohibited from paying their users anything?
The upcoming US regulations for these 1:1 blockchain copies of the greenback have led to aggressive forecasts of where the $260 billion market is headed. Some of that enthusiasm is visible in Circle Internet Group Inc.’s shares, which have risen sixfold over their $31 initial public offering price last month. Circle’s USDC is the second-most-popular digital dollar after Tether’s USDT.