How to Fight the Stablecoin War?
The outcome of the stablecoin war depends on 'who more efficiently distributes profits'.
Profits are the only engine for user growth, and Pendle offers the most compliant and efficient profit distribution solution.
Stablecoin L1, under the guise of institutional compliance, engages in distribution and profit generation. Profits can greatly facilitate user adoption. The Genius Act prohibits stablecoins from paying interest, but profit tools can circumvent regulations, needing to provide interest-generating functions for institutional users (compliance packaging), but cannot directly pay interest (which is illegal).
USDe relies on circulating loan issuance to reach the $10 billion mark within a month (profit-driven growth, but needs a legal path).
Regulatory circumvention: Tokenization of profits (compliance packaging of interest)
yUSDe (representing future profit rights of USDe)
Purchasing yUSDe ≠ receiving interest → instead, 'buying future USDe cash flow at a discount'.
Regulatory case: In March 2025, the SEC determined that yUSDe is a 'profit rights certificate' rather than a security.
Beyond the boundaries defined by rules lies a good arena for various firms to showcase their capabilities.
By the way, the latest proposal
The American Bankers Association (ABA) sent a letter to the Senate Banking Committee leadership along with 52 banking organizations, proposing amendments to the 'American Stablecoin National Innovation and Establishment Act' (GENIUS Act).
The banking organizations believe that there are loopholes in the restrictions on stablecoin issuers paying interest, which could be easily circumvented by exchanges, brokers, and other institutions. They warned that this could lead to stablecoins shifting from payment tools to value storage and credit mechanisms, which would affect market incentive mechanisms. The banking organizations suggested expanding the restriction on interest payments to digital asset exchanges, brokers, and affiliated entities.