Stablecoin Yield: Why Institutions Are Shifting to Tokenized Assets Despite the GENIUS Act Ban

The landscape of digital finance constantly evolves. Recent legislative actions, like the US GENIUS Act, are reshaping how major financial players approach digital assets. This landmark bill, while aiming to boost stablecoin adoption, introduces a critical restriction: a blanket ban on yield-bearing stablecoins. Consequently, institutions are not abandoning their pursuit of returns. Instead, they are redirecting trillions of dollars towards tokenized real-world assets (RWAs) to secure compliant Stablecoin Yield. This shift signals a profound transformation in how capital seeks returns in the digital economy.

Understanding the GENIUS Act and Stablecoin Yield Restrictions

The US GENIUS Act represents a significant legislative step for digital currencies. It aims to provide a clear regulatory framework for stablecoins. Many experts believe it will solidify the position of dollar-backed digital currencies, both domestically and internationally. However, a central provision of the GENIUS Act has sparked considerable discussion. This provision enacts a blanket ban on yield-bearing stablecoins. This means holders cannot earn interest on their digital dollar balances directly through the stablecoin itself. This restriction creates a unique challenge for institutional investors. They traditionally seek returns on all their holdings. Therefore, the absence of direct Stablecoin Yield mechanisms within the stablecoin framework forces a re-evaluation of strategies.

Will Beeson, a former Standard Chartered executive and founder of Uniform Labs, highlights this crucial point. He notes that the restriction will accelerate capital flow into tokenized real-world assets. Institutions need compliant ways to earn yield while maintaining liquidity. Idle, depreciating assets do not align with institutional investment mandates. Beeson states, “With yield-bearing stablecoins off the table, institutions need a compliant way to earn yield while staying liquid.” He further adds, “Capital is already shifting.” This observation underscores a fundamental truth about institutional finance. Capital always seeks efficiency and returns. The GENIUS Act, despite its intentions, inadvertently pushes this pursuit into new digital frontiers.

An excerpt of US President Donald Trump’s GENIUS Act fact sheet. Source: White House

Why Institutions Prioritize Stablecoin Yield

Institutional investors manage vast sums of capital. Their primary objective is to maximize returns while managing risk. Consequently, holding non-interest-bearing assets for extended periods is not a viable strategy. Trillions of dollars in non-interest-bearing stablecoins currently exist. These assets represent significant untapped potential for returns. Will Beeson emphasizes this reality. “Institutional holders aren’t going to sit on idle, depreciating assets. They’ll demand yield — and infrastructure that makes accessing it compliant,” he explains. This demand for Stablecoin Yield is a driving force behind the evolving digital asset landscape. It reflects a core principle of financial management.

The next phase of digital finance moves beyond simple asset holding. It focuses on programmatic access to risk-free yield. Institutions require the ability to move seamlessly between cash and high-quality assets. This agility ensures optimal capital deployment. Beeson notes, “The next phase isn’t about holding idle stablecoins. It’s about programmatic access to risk-free yield, and the ability to move between cash and high-quality assets at will.” This perspective highlights the need for sophisticated infrastructure. Such infrastructure must support compliant, efficient yield generation. Institutions are not simply looking for yield; they are seeking yield within a regulated and secure environment. This distinction is paramount for their participation in digital markets.

Tokenized Real-World Assets: A New Path for Stablecoin Yield

Tokenized Real-World Assets (RWAs) offer a compelling solution for institutions seeking compliant yield. RWAs represent ownership stakes in tangible or intangible assets. These assets include everything from real estate and commodities to government bonds and private equity. Blockchain technology tokenizes these assets. This process converts traditional assets into digital tokens on a blockchain. Consequently, they become programmable, fractionalizable, and more liquid. The ability to tokenize traditional assets opens new avenues for generating Stablecoin Yield. Institutions can deploy their stablecoin holdings into these tokenized assets. They can then earn returns traditionally associated with those underlying assets.

Solomon Tesfaye from Aptos Labs shares Beeson’s view. He told StockPil that the GENIUS Act will benefit tokenization as much as it does stablecoins. This mutual benefit underscores the symbiotic relationship developing between stablecoins and RWAs. Stablecoins provide the digital liquidity. RWAs offer the underlying yield-generating opportunities. This combination creates a powerful new financial paradigm. It allows institutions to bridge the gap between traditional finance and decentralized digital markets. The transparency and efficiency of blockchain also enhance these processes. Furthermore, tokenization can significantly reduce settlement times and administrative costs. These benefits further attract institutional capital.

Uniform Labs and Multiliquid: Facilitating Stablecoin Yield Access

To meet the growing institutional demand for compliant yield, companies are developing innovative solutions. Uniform Labs, founded by Will Beeson, is at the forefront of this innovation. They are building Multiliquid, an institutional liquidity layer for tokenized markets. Multiliquid’s purpose is clear: to enable programmatic, real-time conversion between tokenized assets and stablecoins. This platform allows institutions to seamlessly transition their digital dollars into yield-bearing assets. For instance, they can move stablecoins into tokenized US Treasurys or money market funds. This capability directly addresses the need for compliant Stablecoin Yield that the GENIUS Act’s ban created.

Multiliquid boasts an open-architecture design. This design allows compliant issuers to integrate without complex commercial agreements. This fosters a more inclusive and efficient ecosystem. Beeson confirmed that Uniform Labs is “working with a number of leading institutions, fintechs, and stablecoin issuers.” These collaborations are happening ahead of Multiliquid’s production launch later this year. Beeson’s prior experience at Libeara, a tokenization platform incubated by Standard Chartered’s SC Ventures, provides him with deep insights into institutional needs. His background positions Uniform Labs to deliver solutions that meet stringent compliance and operational requirements. This expertise is vital for attracting significant institutional capital.

Surging Interest in Tokenized Assets for Stablecoin Yield

The market for tokenized assets has witnessed significant growth, particularly in recent years. Tokenized Treasury and money market funds have seen a notable surge in 2025. This growth directly reflects the institutional demand for secure, compliant yield. Data from Glassy Nakamoto confirms this trend. The increasing adoption of these tokenized instruments signals a broader acceptance of digital assets within traditional finance. Institutions are recognizing the efficiency and transparency benefits of blockchain-based assets. These benefits include faster settlement, improved liquidity, and enhanced auditability. As a result, tokenized assets are becoming a preferred choice for deploying capital previously held in idle stablecoins.

Tokenized Treasury and money market funds have witnessed significant growth in 2025. Source: Glassy Nakamoto

This trend aligns with the broader movement towards asset tokenization. It also highlights Wall Street’s increasing interest in digital assets. Tokenized money market funds, for example, emerge as a direct answer to stablecoins. They offer a yield-bearing alternative that satisfies regulatory requirements. The inherent stability of these underlying assets, like US Treasurys, provides a low-risk profile. This makes them highly attractive to risk-averse institutional investors. Consequently, the volume and variety of tokenized assets are expected to continue expanding. This expansion will offer even more diverse opportunities for generating Stablecoin Yield in a compliant manner.

Beyond Bonds: Expanding Opportunities for Stablecoin Yield

While tokenization has largely focused on private credit and government bonds, its potential extends much further. Sandra Waliczek, a member of the World Economic Forum’s blockchain and digital asset division, emphasizes this point. She wrote that “the next phase of digital assets is focused on asset tokenization.” Waliczek highlights tokenization’s ability to level the investing playing field. Historically, asset classes like real estate and private equity remained restricted to wealthier investors. Tokenization changes this dynamic fundamentally. It enables asset fractionalization. This process breaks down large assets into smaller, more affordable units. This accessibility can democratize investment opportunities significantly.

A snapshot of the nearly $26 billion tokenization market. Source: RWA.xyz

The nearly $26 billion tokenization market, while growing, represents only the beginning. Will Beeson predicts that the disruption will extend far beyond current segments. He foresees tokenization encompassing a wide range of assets, including:

• Corporate bonds
• Credit and credit funds
• Commodities
• Equities
• Real estate funds
• Private equity funds
• Private equity and real estate assets themselves

This expansion will unlock new sources of Stablecoin Yield. It will also create unprecedented liquidity for traditionally illiquid assets. The ability to trade fractions of these assets 24/7 on a blockchain will transform global financial markets. This evolution will attract even more institutional capital. It will also foster innovation across various financial sectors. The integration of tokenization into mainstream finance appears inevitable. It offers a more efficient, transparent, and accessible future for investments.

The Future Landscape of Stablecoin Yield

The GENIUS Act, despite its yield ban, inadvertently accelerates a crucial trend in digital finance. It pushes institutions towards the tokenization of real-world assets. This shift is not merely a workaround; it represents a fundamental re-imagining of how capital flows and generates returns in a digital age. The demand for compliant Stablecoin Yield remains strong. It is now being met through innovative solutions like tokenized Treasurys, money market funds, and a growing array of other RWA classes. This evolution signifies a deeper convergence between traditional finance and blockchain technology. It also validates the utility of digital assets beyond speculative trading.

Ultimately, the future of digital assets lies in their ability to provide tangible value and compliant returns. The regulatory landscape will continue to shape this evolution. However, the inherent demand for yield from institutional players will consistently drive innovation. Companies like Uniform Labs are building the necessary infrastructure. They are enabling a future where digital dollars seamlessly interact with a tokenized world. This creates new opportunities for liquidity, efficiency, and above all, sustainable Stablecoin Yield. The digital economy is maturing, and institutions are actively shaping its next phase.

Frequently Asked Questions (FAQs)

Q1: What is the primary impact of the US GENIUS Act on stablecoins?

The US GENIUS Act aims to boost stablecoin adoption by providing a regulatory framework. However, its primary impact on stablecoins is a blanket ban on yield-bearing stablecoins. This prevents holders from earning direct interest on their digital dollar balances.

Q2: Why are institutions seeking alternatives for Stablecoin Yield after the GENIUS Act?

Institutions manage large capital sums and cannot afford to hold idle, non-interest-bearing assets. The GENIUS Act’s ban on direct stablecoin yield means they must find compliant alternative methods to generate returns on their digital holdings, leading them to tokenized assets.

Q3: What are Tokenized Real-World Assets (RWAs), and how do they offer yield?

Tokenized Real-World Assets (RWAs) are digital tokens representing ownership of tangible or intangible assets like US Treasurys, real estate, or corporate bonds. They offer yield by allowing institutions to invest stablecoins into these tokenized versions of traditional assets, earning returns associated with the underlying asset.

Q4: How does Multiliquid by Uniform Labs address the need for compliant Stablecoin Yield?

Multiliquid is an institutional liquidity layer that enables programmatic, real-time conversion between stablecoins and tokenized assets (like Treasurys or money market funds). This allows institutions to deploy their stablecoins into yield-bearing RWAs in a compliant and efficient manner, circumventing the direct stablecoin yield ban.

Q5: What types of assets are being tokenized beyond government bonds?

Beyond government bonds and private credit, the tokenization market is expanding rapidly. It now includes corporate bonds, credit funds, commodities, equities, real estate funds, private equity funds, and even private equity and real estate assets themselves. This broadens the opportunities for compliant Stablecoin Yield.

Q6: How does tokenization benefit investors beyond just offering yield?

Tokenization offers several benefits beyond yield, including asset fractionalization (making expensive assets accessible to more investors), increased liquidity for traditionally illiquid assets, faster settlement times, reduced administrative costs, and enhanced transparency through blockchain technology.