"The search for passive income has always driven investors toward assets like dividend stocks, real estate or government bonds. In 2025, crypto adds another contender: yield-bearing stablecoins. These digital tokens are designed not just to hold their value against the dollar but also to generate a steady income while sitting in your wallet. But before rushing in, it's important to understand what these stablecoins are, how the yield is produced and the legal and tax rules that apply."
"Decentralized finance (DeFi) savings wrappers: Protocols like Sky (previously MakerDAO) allow users to lock stablecoins, such as Dai (DAI), into a savings rate module. When wrapped into tokens like sDAI, your balance grows over time at a rate set by the protocol's governance. Synthetic yield models: Some innovative stablecoins, such as those powered by derivatives strategies, generate yield from crypto market funding rates or staking rewards. Returns can be higher but also fluctuate dependi"
Yield-bearing stablecoins are dollar-pegged tokens that distribute returns from underlying assets or strategies directly to tokenholders. Three main models exist: tokenized treasuries and money-market-style funds that pass short-term Treasury or deposit yields back to holders by rebasing balances or adjusting token value; DeFi savings wrappers that lock stablecoins into protocol-set savings modules (e.g., sDAI) to grow balances; and synthetic yield models that use derivatives, funding rates, or staking to generate variable returns. US and EU rules generally prohibit issuer-paid interest and restrict access. Rebases and rewards are taxed as income when received. Significant risks include regulatory change, market volatility, contract failures, and liquidity constraints.
Read at cointelegraph.com
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