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Stablecoins are among the most popular cryptocurrency types in the market. Their rate stability and inherent link to traditional fiat currencies have drawn millions of crypto natives to use them for storing value and moving funds between blockchain and traditional finance (TradFi) sources. However, one of the most significant drawbacks of traditional stablecoins is their lack of yield: these assets are designed to be pegged to a major fiat currency, often the US dollar, but don't generate any interest on the principal amount.
This scenario starkly contrasts with fiat money held in deposit accounts at banks, as cash parked at a traditional banking institution earns you yield in the form of interest. Cash investments aren't known for stellar returns, but they can still protect your funds from value erosion due to inflation. Although stablecoins were envisioned as digital equivalents of fiat currencies, they don't earn interest when simply held in a crypto wallet.
Yield-bearing stablecoins are a relatively new trend in the crypto market, and are specifically designed to address this issue. As their name suggests, yield-bearing stablecoins allow you to earn yield, making them ideal for any investor who wants both rate stability and return potential.
The yield-bearing stablecoin niche has been growing quickly, as evidenced by a 583% increase in the category's market cap in 2024. Their surge in popularity has continued into 2025 as well. In February 2025, the US Securities and Exchange Commission (SEC) approved YLDS — a yield-bearing stablecoin offered by digital asset firm Figure Markets — as a security. This pivotal event is widely expected to further boost the already impressive growth of this segment. As of mid-April 2025, YLDS remains the only stablecoin of this kind to receive regulatory approval.
In this article, we’ll examine yield-bearing stablecoins and their benefits and risks, and consider the leading assets of this type currently dominating the rankings.