Yield-Bearing Crypto Assets Poised for Exponential Growth Amid Regulatory Clarity

According to a comprehensive report from Redstone analysts, in collaboration with Gauntlet, Stablewatch, and the Tokenized Asset Coalition, yield-bearing crypto assets are set for rapid expansion as institutional adoption accelerates. The growth is largely attributed to the GENIUS Act, passed in July 2025, which establishes a regulatory framework for dollar-pegged cryptocurrencies and is sparking increased interest in yield-generating stablecoins.

The report highlights that the market size of interest-bearing stablecoins has surged by 300% over the past year, driven by new projects competing with major issuers like Tether and Circle. Currently, only 8% to 11% of crypto assets generate yield, compared to 55% to 65% in traditional finance (TradFi), indicating a significant growth opportunity. With the total crypto market capitalization at approximately $3.55 trillion, only $300 billion to $400 billion of those assets produce yield, presenting what Redstone calls crypto’s greatest opportunity.

Regulatory clarity from the GENIUS Act is fueling demand, but a loophole in Section 16(d) allows affiliates of issuers or third-party distributors, such as cryptocurrency exchanges and brokers, to provide rewards or incentives on stablecoin holdings. This enables platforms to indirectly offer yields through mechanisms like staking incentives or promotional bonuses, despite the Act prohibiting direct interest payments by stablecoin issuers. Critics have raised concerns that this loophole could disrupt banking lending capacity, though trade groups have requested its removal.

Specific yield-bearing assets are gaining traction, including Ether (ETH) liquid staking tokens (LSTs), which grew from 6 million to 16 million tokens over two years, representing a notional value of $34 billion. Similarly, Solana (SOL) LSTs doubled in supply from 20 million in January 2024 to about 40 million by November 2025, with 67% of Solana’s token supply now locked in staking contracts. These assets offer passive yields of around 4%, enhancing capital efficiency and attracting institutional interest.

The report concludes that as the Crypto-as-infrastructure thesis gains momentum and onchain finance proves its superior efficiency, yield-generating crypto assets are positioned for exponential growth, narrowing the gap with TradFi and encouraging broader adoption.