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I'm a bit confused. So Stablecoin issuers are allowed to earn interest on their treasuries, but they are not allowed to pay interest to stablecoin holders directly. Instead, exchanges attract people to deposit stablecoins in their exchanges, but instead of paying interest on the stablecoins, they pay them "rewards"?
The GENIUS Act was designed to keep stablecoins as payment tools rather than savings products. As a result, it bans issuers from paying interest or yield to stablecoin holders. Cointelegraph
I think that under current rules, exchanges are not precluded from offering interest/rewards to people who deposit stable coins with them.
The recent CLARITY Act debate has been about a provision that would stop exchanges from doing this. I believe this was a major reason Coinbase backed out.
Ah, that makes sense. And another example of how big industry players will always have their thumbs on the scale of any legislation
I think this is how the stablecoin rewards thing works (or some variation of):
sourece
So, an exchange says we will give you customers 3.5% if you park your stablecoins with us, and also the exchange says to the stablecoin issuer: we want to list your stablecoin, but you konw it sure would be nice if you paid us a certain percentage of that yield you're getting so we can offer customers some rewards when they buy your stablecoin...
You got me all titillated with the Tether title and then I find that it's just stablecoins in general. I feel jilted.
(also, I think that Tether has at least in the past has offered loans to people...cough Celsius cough)