The recent GENIUS bill, signed into law, prohibits yield-bearing options for US-regulated stablecoins, prompting analysts to predict a surge in demand for Ethereum and decentralized finance (DeFi). This legislation ends interest-earning opportunities for both institutions and retail traders, driving them to seek alternative avenues for passive income generation, primarily through Ethereum-based DeFi platforms. Analyst Nic Puckrin noted that the absence of yield on stablecoins enhances the attractiveness of DeFi, where users can generate returns to counteract fiat inflation. Christopher Perkins from CoinFund emphasized that with the dollar losing value, DeFi serves as a vital tool for yield generation. The competitive landscape could lead to more institutional investments in crypto as they seek on-chain yields. Senator Kirsten Gillibrand highlighted concerns that yield-bearing stablecoins could negatively impact traditional banking by reducing the incentive for customers to hold funds in local banks. Despite these concerns, industry experts like Tether co-founder Reeve Collins believe that higher yields will naturally attract users to yield-bearing options, potentially displacing traditional stablecoins.

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