- Yield-bearing stablecoins grew from $4B to $13B, reflecting strong investor demand.
- JPMorgan forecasts yield-bearing stablecoins could capture 50% of the market by 2025.
- Top yield-bearing stablecoins like USDe and USDS lead the charge with rapid market growth.
JPMorgan analysts predict yield-bearing stablecoins will increase from 6% to 50% of the total stablecoin market cap. According to a report released on Wednesday, March 26, 2025, the forecast predicts rising interest in these assets.
Analysts led by managing director Nikolaos Panigirtzoglou, attribute the surge to investor demand for returns in a high-interest-rate environment. Unlike traditional stablecoins, these newer tokens offer yields akin to money market funds, drawing parallels to conventional finance.
The report arrives as the market, currently valued at $220 billion, experiences rapid evolution. Yield-bearing stablecoins, including tokenized Treasurys, have jumped from a $4 billion market cap in November 2024 to over $13 billion today. This growth follows the U.S. election and aligns with the SEC’s approval of Figure Markets’ YLDS, a yield-bearing stablecoin registered as a security. Such developments signal a maturing market, though regulatory hurdles remain a key factor in its trajectory.
Rising Popularity of Yield-Bearing Tokens
Investors prefer yield-bearing stablecoins because they earn profits without requiring risky trading or lending activities. Users can receive yields from their assets through collateralization at Major platforms, including Deribit and FalconX, by using tokenized Treasurys. Meanwhile, Users of decentralized finance systems choose these assets as conventional yield rates decrease. Projects like Frax Finance integrate tokenized Treasurys, boosting their utility across the crypto ecosystem.
The top five yield-bearing stablecoins—Ethena’s USDe, Sky Dollar’s USDS, BlackRock’s BUIDL, Usual Protocol’s USD0, and Ondo Finance’s USDY—lead this charge. Their combined market cap has tripled in months, reflecting strong demand. Analysts note that these tokens appeal to institutions and individuals seeking capital efficiency. However, their classification as securities imposes compliance burdens, limiting broader adoption among retail investors for now.
Challenges and Future Potential
Traditional stablecoins like Tether’s USDT and Circle’s USDC dominate with superior liquidity and low-cost transactions. Their design avoids sharing reserve yields, keeping them free of securities classification. In contrast, yield-bearing stablecoins face regulatory restrictions that slow their growth. Despite this, JPMorgan analysts see a path forward as these assets gain traction in derivative trading, DAO treasuries, and venture fund reserves.
The shift could redirect idle cash from traditional into yield-bearing alternatives over time. While traditional tokens hold a liquidity edge, analysts argue this gap may narrow as adoption spreads. If regulatory clarity emerges, the 50% market share projection becomes achievable.
