Public blockchains such as Ethereum, Solana, and Sui are quickly becoming the dominant venues for stablecoin issuance. On-chain data coupled with financial macro trends indicate a move of capital from traditional fixed income assets into decentralized, yield-generating strategies. This movement underscores a larger trend permeating the financial markets, where investors are increasingly looking for greater returns in the DeFi world.
As of July 15, three-year Treasury notes yield about 3.93%, while ten-year bonds are at 4.50%. U.S. money market funds had about $7.07 tril. in assets as of July 2025. These funds offer very appealing yields between 4.2% - 4.4%. By comparison, DeFi stablecoin lending offers a chance to earn yields of 12% to 22% per year.
This year that huge gulf in yields is generating a lot of buzz. Investors have recently begun exploring ways to deploy stablecoins directly into DeFi lending pools. These pools almost exclusively utilize trading pairs pegged to the U.S. dollar, such as USDT or USDC. In addition, they are purposefully migrating money market functions from legacy finance institutions to the blockchain. The latter is an attractive feature for participants in these DeFi stablecoin lending pools since they are shielded from the concept known as “impermanent loss”.
The U.S. GENIUS Act continues the trend in favor of stablecoin issuance on public blockchains. This regulatory support increases the confidence and legitimacy within the DeFi space. Consequently, it attracts significantly more institutional and retail investors.
