"As interest payments are blocked, bypasses explode"...Stablecoin Profit War, Round 2 Begins

▲ Stablecoin

As the conflict between regulatory authorities and the industry over stablecoin interest payments enters a prolonged phase, an analysis suggests that a reorganization of the virtual asset market's profit models will begin in earnest.

According to financial media outlet Benzinga on September 28 (local time), market experts diagnosed that regulatory debates surrounding profit distribution models are intensifying in the stablecoin ecosystem led by Tether's USDT, Circle's USDC, and Ripple's RLUSD. Major financial regulatory agencies, including the U.S. Securities and Exchange Commission (SEC), are putting strict brakes on the structure of directly paying interest or profits to stablecoin holders, stating that it falls under traditional securities law and bypasses banking regulations.

Despite strong pressure from regulatory authorities, the demand from market participants to maximize capital efficiency is not decreasing. In an environment where high interest rates in traditional finance are maintained, there is a growing trend to pursue alternative profits through decentralized finance (DeFi) lending protocols or synthetic dollar models, in response to the existing structure where issuers monopolize the massive interest income from government bond reserves.

This regulatory conflict is ultimately expected to trigger the evolution of next-generation stablecoin design. It is explained that technological and institutional bypasses are being sought to avoid legal uncertainty, such as the emergence of new forms of asset-backed yield tokens that are recognized as legitimate within regulatory boundaries in line with the entry of institutional investors into the mainstream, or the restructuring of models into on-chain governance rewards.

Experts predict that market pains will be unavoidable in the short term as comprehensive legislation from Congress is delayed and enforcement actions by regulatory agencies continue. However, in the long term, it is analyzed that a clear regulatory guideline will be established, solidifying an oligopoly centered on large issuers with stable reserve disclosures and legitimate profit structures.

[Article Key Summary]

-Benzinga analyzed that the prolonged struggle with regulatory authorities over stablecoin interest payment models is triggering a restructuring of the market.

-As regulatory agencies such as the SEC classify interest-bearing coins as securities and apply pressure, demand for alternative profit models and synthetic dollars is increasing.

-In the long term, a market reorganization centered on large issuers that meet legal profit structures and strict reserve disclosure is likely.

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