The GENIUS Act killed one of the most obvious selling points for stablecoins: paying holders interest. Now Circle CEO Jeremy Allaire is making the case that the industry doesn’t actually need it.
Allaire has been vocal about transaction-based incentives and loyalty programs as the path forward for USDC, framing the regulatory constraint not as a setback but as what he calls a “powerful tailwind” for adoption. In English: if you can’t pay people to hold your stablecoin, you reward them for actually using it.
What the GENIUS Act actually changes
Signed into law in July 2025, the GENIUS Act drew a hard line between payment stablecoins and deposit-like financial products. The core provision that matters here is the outright ban on direct interest or yield payments from stablecoin issuers to holders.
The law also mandates that stablecoins maintain 1:1 backing with high-quality liquid assets, comply with anti-money laundering rules, and submit to regular attestations. Section 4 of the act was specifically designed to differentiate stablecoins from bank deposits, a concession aimed at easing the banking industry’s long-running anxiety about crypto eating into its territory.
