Coinbase and PayPal are continuing to provide yields of 3% to 5% on stablecoin deposits, despite the recently passed GENIUS Act, which prohibits stablecoin issuers from offering such yields. Coinbase, although it no longer issues USDC, offers a 4.1% annual yield on stablecoin deposits. The GENIUS Act aimed to define stablecoins primarily as payment currencies rather than investment products. During earnings calls, both companies’ executives confirmed their commitment to rewards programs for stablecoin holders, asserting that they do not issue stablecoins but rather offer rewards, which are legally distinct from interest payments. PayPal’s stablecoin, PYUSD, is issued by a third-party firm, allowing it to continue to offer enticing yields. Despite regulatory restrictions on issuers, major payment and crypto firms appear undeterred in incentivizing stablecoin holders, suggesting an emerging trend in the sector to navigate around new legislative frameworks while maintaining customer engagement.

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