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Title: US Stablecoin Yield Ban Sparks Ethereum DeFi Rush After GENIUS Act Becomes Law
The recent signing of the GENIUS Act into law has sent shockwaves through the cryptocurrency market, with a specific focus on the stablecoin industry. The act bans all yield-bearing stablecoins across the United States, effectively cutting off one of the most popular ways for investors to generate passive income.
According to Senator Kirsten Gillibrand, this ban could potentially replace traditional bank services. However, it seems that institutions and individuals alike are choosing a different path. Instead of turning to regulated financial institutions, they are flocking to Ethereum-based decentralized finance (DeFi) protocols in search of alternative yield opportunities.
This shift is expected to be nothing short of transformative for the DeFi space. Nic Puckrin, an analyst, has described this move as a “shift toward Ethereum-based DeFi.” The reasoning behind his statement lies in the fact that Ethereum DeFi platforms still offer yield-generating options through liquidity pools, lending, and staking.
The impact is already being felt, with some predicting a significant influx of capital into Ethereum-based DeFi protocols. Reeve Collins, co-founder of Tether, has gone on record to state that the rise of yield-bearing fiat-backed tokens will likely surpass traditional stablecoins in popularity. This sentiment echoes sentiments expressed by Senator Gillibrand during her remarks at the DC Blockchain Summit.
As a result, the market is bracing for a potential increase in DeFi activity and participation. The ban’s effects are being felt across the board, with investors seeking new methods of generating passive income outside the scope of regulated financial institutions.
Source: coinchapter.com
