The GENIUS Act, in effect since mid-July, prohibits stablecoin issuers from directly paying interest, leading to increased scrutiny of reward programs. The stablecoin market is expected to grow to $297 billion by 2025, marking a nearly 50% increase from January. Companies such as PayPal offer 3.7% annual interest on PYUSD as 'rewards' rather than direct interest, while others circumvent restrictions by partnering with banks or using clearing accounts. Experts warn that regulators may challenge these methods, potentially widening the gap between compliant issuers like Circle and offshore entities like Tether.
GENIUS Act Restricts Stablecoin Interest Payments, Raises Compliance Concerns
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