The US GENIUS Act bans issuers from offering yield-bearing stablecoins, protecting money market funds. Tokenized MMFs could offer yield and serve as DeFi collateral. EY’s Brody highlights the importance of yield in deciding between tokenized MMFs and stablecoins. The banking industry has influenced the stablecoin debate to protect their traditional business model.

Financial institutions lobbied against interest-bearing stablecoins. The SEC approved the US’s first yield-bearing stablecoin security in February. YLDS, issued by Figure Markets, offered a 3.85% yield. GENIUS Act aims to prevent foreign issuers from offering yield-bearing stablecoins.

Read more at Cointelegraph: GENIUS Act Could Limit Stablecoin Appeal Amid Tokenization Boom