Yield-bearing stablecoins have soared to $11 billion in circulation, representing 4.5% of the total stablecoin market, a steep climb from just $1.5 billion and a 1% market share at the start of 2024.<\/p>\n
One of the biggest winners is Pendle, a decentralized protocol that enables users to lock in fixed yields or speculate on variable interest rates. Pendle now accounts for 30% of all yield-bearing stablecoin total value locked (TVL), roughly $3 billion, the firm said in a report shared with Cointelegraph.\u00a0\u00a0<\/p>\n
Pendle noted that stablecoins make up 83% of its $4 billion total value locked, a sharp rise from less than 20% just a year ago. In contrast, assets such as Ether (ETH<\/a>), which historically contributed 80%\u201390% of Pendle\u2019s TVL, have shrunk to less than 10%.<\/p>\n Traditional stablecoins like USDt (USDT<\/a>) and USDC (USDC<\/a>) do not pass on interest to holders. With over $200 billion in circulation and US Federal Reserve interest rates at 4.3%, Pendle estimates that stablecoin holders are missing out on more than $9 billion in annual yield.<\/p>\n Pendle TVL share by assets. Source: Pendle<\/em><\/p>\n Related:\u00a0<\/strong><\/em>How to Use tsUSDe on TON for Passive dollar Yield in 2025<\/strong><\/em><\/a><\/p>\n The rise in yield-bearing stablecoins<\/a> comes amid increasing regulatory clarity under US President Donald Trump\u2019s administration.<\/p>\n In February, the US Securities and Exchange Commission approved yield-bearing stablecoins<\/a> as \u201ccertificates\u201d subject to securities regulation, rather than banning them. The approval allows yield-bearing stablecoins to operate under specific rules, including registration, disclosure requirements and investor protections.\u00a0\u00a0<\/p>\n Proposed bills like the Stablecoin Transparency and Accountability for a Better Ledger Economy (STABLE)<\/a> and\u00a0the Guiding and Establishing National Innovation for US Stablecoins (GENIUS)<\/a> signal a favorable direction.<\/p>\n Meanwhile, Pendle said it expects stablecoin issuance to double to $500 billion in the next 18 to 24 months. The firm also anticipates yield-bearing stablecoins to capture 15% of this market with $75 billion in issuance (7x growth from $11 billion).<\/p>\n Yield-bearing stablecoins issuance. Source: Pendle<\/em><\/p>\n Related:\u00a0<\/strong><\/em>PayPal to offer 3.7% yield on stablecoin balances: Report<\/strong><\/em><\/a><\/p>\n Initially focused on airdrop farming, Pendle has shifted toward serving as an infrastructure layer for decentralized finance yield markets.<\/p>\n Ethena\u2019s USDe stablecoin currently accounts for about 75% of Pendle\u2019s stablecoin TVL. However, newer entrants such as Open Eden, Reserve and Falcon have increased the share of non-USDe assets from 1% to 26% over the past year.<\/p>\n Pendle is also expanding beyond Ethereum, with plans to support networks like Solana and to integrate with Aave and Ethena\u2019s upcoming Converge blockchain.<\/p>\n Interest in\u00a0yield-generating strategies within the cryptocurrency sector<\/a>\u00a0has surged in recent years, driven by both retail and institutional investors seeking to maximize returns on their digital assets.<\/p>\n On May 19, Franklin, a hybrid cash and crypto payroll provider, announced the launch of Payroll Treasury Yield<\/a>, which uses blockchain lending protocols to help firms earn returns on payroll funds.<\/p>\nGrowing regulatory clarity benefits stablecoins<\/h2>\n
Pendle shifts focus to yield market<\/h2>\n