Stablecoin yield debate raises crypto accounting challenges as $22.7B market outpaces regulation

The US stablecoin market has a yield problem, and it’s not the kind most investors are thinking about. While the GENIUS Act, signed into law in July 2025, explicitly prohibits payment stablecoin issuers from directly paying interest or yield to holders, a growing ecosystem of third-party workarounds has emerged. The result is a $22.7 billion yield-bearing stablecoin market that’s growing at roughly 11% per month, and an accounting framework that has no idea what to do with it. Coinbase currently offers approximately 3.5% APY on USDC through what it classifies as loyalty rewards, funded largely through its revenue-sharing partnership with Circle, the issuer behind USDC. Kraken and Gemini offer rates above 3.75%. The yield isn’t coming from the issuer’s mouth, technically speaking. It’s coming from the platform’s pocket. That distinction matters enormously to regulators, accountants, and the banks watching their deposits trickle away. The loophole that launched a thousand spreadsheets The GENIUS Act drew a clean line: issuers can’t pay yield. But it left the territory around third-party arrangements largely uncharted. Crypto exchanges realized they could fund yield programs from thei...