Restrictions on stablecoin yields may drive capital to unregulated financial instruments

The US CLARITY Act’s proposed yield limits for compliant stablecoins like USDC could lead to a capital flight towards unregulated offshore options, jeopardizing financial integrity. Experts predict investments will shift to higher-yield synthetic dollar products.

Restrictions under the GENIUS Act classify stablecoins as digital cash, limiting their ability to offer interest. This misalignment with current yields may push investors away from compliant stablecoins, complicating regulatory efforts.