The U.S. GENIUS Act bans interest-bearing stablecoins, leading to the rise of tokenized money market funds in DeFi products. These funds offer an alternative way to generate on-chain Treasury yield. Despite similarities, stablecoins lack interest, making MMFs more appealing. Banks lobby to close a loophole allowing interest on stablecoin balances.

Popular stablecoins like Tether and USDC offer no savings opportunities. New yield-bearing alternatives like USDM and USDY distribute reserve income to holders. With yield-bearing stablecoins banned in the U.S., tokenized MMFs are a viable alternative, offering utility and potential returns. Innovative products like Real Yield Token (RYT) combine stablecoins and tokenized MMFs, creating new opportunities for investors.

Read more at Yahoo Finance: DeFi Embraces Tokenized Money Funds in Response to Stablecoin Yield Restrictions