When Bitget announced Cash Plus, a lot of people saw it as another crypto earn product that allows users to convert USDT or USDC into a yield-generating balance while keeping their funds liquid for future trading.
The product currently generates returns through allocations to USDGO, a compliant asset backed by short-term US Treasury securities, cash, and repurchase agreements. Planned integrations will also allow these balances to serve as trading margin while continuing to earn yield, but at first glance, this seems like a routine product launch; it is far from such.
Put your idle USDT & USDC to work.
Earn up to 4% with Bitget Cash Plus, while keeping your funds ready to trade, use as margin, and redeem instantly.
— Bitget (@bitget) July 14, 2026
The launch comes at a time when regulators in the United States, Europe, and the United Kingdom continue debating whether payment stablecoins should pay interest at all. If governments are trying to keep stablecoins simple, why are exchanges, wallets, and blockchain companies racing to make them earn yield? The answer says more about where digital finance is heading than the product itself.
The Fight Is No Longer About Stablecoins
A few years ago, the biggest question was whether stablecoins would even survive, but today, the market has largely answered that question. Stablecoins have become one of crypto’s most important pieces of infrastructure. They power trading, cross-border transfers, DeFi, and increasingly, business payments.
INTERESTING: The Crypto Market Runs on Stablecoins, Everything Else Is Catching Up
As adoption has grown, a different question has become far more important than whether stablecoins would survive. Who should benefit from the income generated by the assets backing those stablecoins?
Most major stablecoin issuers hold reserves in highly liquid assets such as short-term US Treasury bills, cash, and repurchase agreements. Those assets generate income, and from time immemorial, that income has stayed with the issuer. Now, exchanges and Fintech companies are trying to share some of that return with users.
Products like Bitget’s Cash Plus, Coinbase USDC Rewards, Binance Simple Earn, OKX Earn, and tokenized Treasury products such as Ondo USDY all show the same premise. Idle digital dollars should not remain idle when they can generate returns, in spite of what anyone says.
Regulators Want Stablecoins Boring, On Purpose
This trend has created a difficult dynamic, one where regulators generally want stablecoins used for payments to behave like digital cash because once a stablecoin begins paying interest directly, it starts looking less like money and more like an investment product. This difference is important because investment products often fall under different regulatory frameworks.
Instead of making the stablecoin itself interest-bearing, many companies are designing separate products that sit alongside stablecoins. Users deposit their USDT or USDC into a yield product, while the underlying funds are invested in low-risk assets such as tokenized Treasury bills or money market instruments.
It may seem like a small technical difference, but it allows firms to pursue crypto passive income while staying closer to what many people expect from the regulatory bodies.
The Loophole That Explains Everything
The GENIUS Act, signed into US law in July 2025, does prohibit stablecoin yield, but only for one specific actor. Section 4(a)(11) bars a “permitted payment stablecoin issuer” from paying holders any interest or yield, in cash or tokens, solely for holding the token. The word doing all the work in that sentence is issuer. The statute never mentions exchanges, wallets, or affiliates.
That’s not an oversight anyone disputes; it’s the reason Coinbase can offer USDC Rewards while Circle, the actual issuer of USDC, cannot pay a cent of interest directly. Circle pays yield to Coinbase, and Coinbase pays a “reward” to whoever custodies USDC in a Coinbase-hosted wallet. Legal analysts have pointed out that this is functionally identical to Circle paying yield to the holder, since Coinbase is the technical holder of record. It’s just structured through an extra layer.
Banking groups have noticed. In a joint letter, the American Bankers Association and 76 state banking associations recently urged Congress to extend the ban to affiliates and exchanges, warning that unchecked yield programs risk pulling deposits out of the traditional banking system.
The Treasury Department has estimated that as much as $6.6 trillion in bank deposits are theoretically exposed to this kind of migration.
The Office of the Comptroller of the Currency had earlier, on February 25, 2026, issued a proposed rule that would treat any coordinated arrangement between an issuer and an affiliate or third party to deliver yield as itself a prohibited yield arrangement, a “rebuttable presumption” standard aimed squarely at structures like Circle-to-Coinbase. Separately, a Senate Banking Committee draft of the CLARITY Act considered barring exchanges from paying yield on holdings outright, while still allowing “activity-based” rewards tied to actual transaction use rather than passive holding. Neither has passed as of this writing.
This is the real answer to why products like Cash Plus keep appearing. The ban was written narrowly, intentionally or not, and until Congress or the OCC closes the gap, the legal space for exchange-level yield products remains open in the US specifically.
The EU and UK Closed the Door the US Left Open
The narrowness of the US ban is not the global default. The EU’s MiCA framework prohibits interest at the issuer level too, but the EU’s approach is broader than that of the US in an important way. Article 50 of the regulation, which governs e-money tokens, the category most payment stablecoins like USDC and USDT-style tokens actually fall under, keeps it simple. It expressly says issuers “shall not grant interest.”
Article 40, covering the separate category of asset-referenced tokens, goes further, barring issuers from granting “interest or any other benefit related to the length of time” a token is held, language clearly written to catch workarounds beyond straightforward interest payments.
Either way, the EU never left the kind of exchange-level gap the US did. MiCA also regulates the distribution side directly: authorized crypto-asset service providers, the EU’s term for exchanges, custodians, and wallet providers, are barred from offering non-authorized stablecoins to the public at all. The restriction attaches to the trading venue itself, not just the token, which closes off the kind of issuer-to-exchange handoff that works in the US.
The UK reached a similar place through its own process. The Financial Conduct Authority (FCA) finalized its cryptoasset rulebook on June 30, 2026, and explicitly maintained a ban on stablecoin issuers paying interest or backing-pool income to holders, “whether directly or indirectly,” language written specifically to prevent the kind of affiliate workaround the US is still fighting over.
This is a significant moment for cryptoasset regulation in the UK. 📢
Firms supporting people to buy, trade and hold cryptoassets will need to meet clear standards under our new rules and get ready for when they come into effect in October 2027.
Under our rules, cryptoasset… pic.twitter.com/EkNguSKY9l
— Financial Conduct Authority (@TheFCA) June 30, 2026
Although the FCA did leave one narrow opening in its recent update. Issuers can still pay commercial rewards from their own account, for example, tied to transaction volume, as long as that reward isn’t funded by income from the reserve assets themselves. That’s a real distinction; a loyalty-style reward is not the same as yield on a balance, but it’s considerably narrower than what US exchanges currently offer.
The pattern across all three regimes is consistent once you look past the headline “stablecoins can’t pay yield” because every regulator agrees the payment stablecoin itself should stay yield-free. What differs is how tightly each one restricts the workarounds sitting next to it.
Not Every Yield Product Is Playing the Same Game
Not every company in the space is taking the same legal risk. No, they’re not. Each of the products named earlier in this piece occupies a genuinely different regulatory position. That position is a better predictor of how long it survives than its yield rate is.
Coinbase (USDC Rewards) is the company actually testing the US loophole in real time. Coinbase is licensed and operating in the US, and it pays “rewards” on USDC held in Coinbase-hosted wallets, structured through Circle rather than paid directly by Circle to holders.
As earlier stated, some legal analysts have flagged this as functionally equivalent to Circle paying interest to the holder, since Coinbase is the technical custodian of record. This is the exact arrangement the OCC’s February 2026 proposed rule is designed to catch, which makes Coinbase the company with the most to lose if that rule finalizes.
Circle, as the actual issuer of USDC, cannot pay yield directly under GENIUS Section 4(a)(11) and doesn’t. Its exposure is different. It’s the counterparty in the Coinbase arrangement regulators are scrutinizing, not the one paying the reward itself.
Binance doesn’t serve US customers on its main global platform at all. US users are routed to the separately regulated Binance.US entity. In the EU, Binance has already restricted lending and Simple Earn subscriptions involving “unauthorized” (non-MiCA-compliant) stablecoins since mid-2024, ahead of MiCA’s enforcement deadlines. Its yield products largely operate in the same offshore-market space Bitget’s Cash Plus does, outside US and MiCA oversight, rather than working around it from the inside.
OKX is the most legally exposed of the “offshore” names, but for a different reason. It actually relaunched in the US in April 2025 after a $504 million Department of Justice settlement for previously operating as an unlicensed money transmitter, and now runs a separate, more restricted OKX US platform. Its stablecoin Earn products on the US platform are notably narrower than its global offering; no stablecoin-equivalent Earn product exists on OKX US the way it does globally, a sign the company is deliberately keeping yield products out of US reach rather than testing a loophole.
Ondo Finance’s USDY takes the most legally cautious structure of the group. USDY is explicitly not offered or sold to US persons under Regulation S, and it’s the issuer, not an exchange layering a reward on top, that pays the yield directly, since USDY is a security-like instrument by design rather than a payment stablecoin trying to stay outside securities law. That’s a fundamentally different legal strategy from everyone else in this list: rather than avoid the yield ban through structure, Ondo avoids it through exclusion, non-US investors only.
Bitget doesn’t operate in the US at all. It holds only limited national VASP registrations in the EU rather than a full MiCA CASP license, and shows no indication of FCA authorization in the UK. Cash Plus is built for the roughly 150 countries where Bitget already operates, most without a GENIUS-, MiCA-, or FCA-equivalent framework at all.
Capital Efficiency Has Become the New Competition
If you probe a little deeper beyond the surface contention of ‘yield’ or ‘no yield’, you will discover that ‘yield’ or ‘no yield’ isn’t necessarily the main issue; it is capital efficiency, and for years, stablecoins mostly acted as settlement tools. Traders moved funds into USDC or USDT, and waited for opportunities; then they deployed capital when markets moved. During that waiting period, billions of dollars just sat idle.
Many of these companies launching products and features now see those idle balances as an opportunity. Bitget describes Cash Plus as a way to make every dollar productive instead of forcing users to choose between liquidity and earnings. Future updates will even allow eligible balances to function as trading collateral while continuing to generate returns, and this idea extends way beyond one exchange.
Corporate treasuries, payment companies, and institutional investors all want cash that continues working without sacrificing immediate access. The competition to launch new stablecoins isn’t as interesting for people and companies who are now asking, “how can we make existing stablecoins more useful.”
Where the Yield Actually Comes From Now
In recent times, the source of that yield has also changed because during the DeFi boom, attractive returns often came from lending protocols, liquidity mining, or highly leveraged strategies. Today, many of the newest yield-bearing stablecoin products rely on real-world assets (RWAs) instead.
Bitget says Cash Plus currently allocates funds to USDGO, whose reserves include short-term US government bonds, cash, and repurchase agreements. Other firms are following similar paths by using tokenized Treasury-backed stablecoins and regulated money market assets to support returns.
This is important because it connects blockchain with traditional financial markets instead of separating them. Instead of replacing TradFi entirely, crypto builds on top of it, and that difference is everything.
The Issuers Aren’t the Ones Who’ll Win This
One interesting outcome of this change, driven by real-world assets (RWAs), is that stablecoin issuers may not capture all the value alone. Exchanges, wallets, Fintech platforms, and asset managers are all competing to become the place where users keep their digital dollars, and if one platform offers zero return while another offers a competitive yield with instant liquidity, users have a clear reason to move.
This creates a new layer of competition that has little to do with transaction speed or trading fees. Instead, firms compete on how efficiently they manage customer balances while maintaining trust, liquidity, and regulatory compliance. Bitget’s launch is one example, but it is part of a much broader movement across the industry.
It Looks Like Payments and Investing Are Splitting Apart
The debate over stablecoin regulation is unlikely to end soon because just like governments want payment stablecoins to remain safe, transparent, and reliable, companies also want those same assets to become productive financial tools that generate returns for their users.
Those two goals are not necessarily incompatible as the industry now appears to be separating payments from investing. Stablecoins continue serving as digital cash, while dedicated yield products invest reserves in regulated, income-producing assets, and that difference could define the next phase of digital finance.
It’s safe to say products like Bitget’s Cash Plus, Coinbase USDC Rewards, Binance Simple Earn, OKX Earn are therefore more than just another earn product from an exchange; they’re a visible entry point into a much larger transition taking place across crypto. The race is no longer about creating another dollar-backed token. It’s about building the smartest way to use the digital dollars people already hold, and every company doing that is making its own bet on how much regulatory exposure it’s willing to carry to get there.
As long as billions of stablecoins sit idle across exchanges and wallets, companies will keep finding new ways to put them to work, some by testing the edges of what regulators will allow, others by staying carefully outside their reach.
FAQs
Is it legal for a crypto exchange to pay yield on stablecoins?
In the US, it depends on who’s paying. The GENIUS Act bars stablecoin issuers, like Circle for USDC, from paying interest or yield directly to holders. It doesn’t explicitly bar exchanges or affiliates from doing the same thing, which is the gap companies like Coinbase currently operate in. The OCC has proposed a rule to close that gap, but it hadn’t been finalized as of this writing.
Why can’t stablecoin issuers pay interest to holders?
Regulators want payment stablecoins to function like digital cash, not investment products. Paying interest ties returns to how long someone holds a token, which starts to look like a security or a bank deposit rather than a payment instrument, and that shift would trigger a different, stricter set of rules.
Does MiCA allow stablecoin yield in the EU?
No. MiCA bans interest at the issuer level for both major stablecoin categories, e-money tokens under Article 50 and asset-referenced tokens under Article 40, and the asset-referenced token rule goes further, barring “any other benefit” tied to how long a token is held. MiCA also restricts exchanges directly, barring them from offering unauthorized stablecoins to the public at all, which closes off the kind of issuer-to-exchange workaround that exists in the US.
Does the UK allow stablecoin issuers to pay rewards?
The FCA’s final rules, published June 30, 2026, keep the ban on stablecoin interest, including indirect payments routed through a third party. Issuers can still pay commercial rewards from their own account, for example tied to transaction volume, as long as the reward isn’t funded by income from the reserve assets. That’s narrower than what US exchanges currently offer.
Is Bitget Cash Plus subject to US or EU stablecoin regulations?
Not directly. Bitget doesn’t operate in the United States, and it holds only limited national registrations in the EU rather than a full MiCA license. Cash Plus is built primarily for the roughly 150 countries where Bitget already operates, most without a GENIUS-, MiCA-, or FCA-equivalent framework in place.
What’s the difference between a stablecoin “reward” and stablecoin “yield”?
Legally, the distinction often comes down to who’s paying and what it’s tied to. A reward tied to transaction activity or paid from a company’s own revenue is generally treated differently than yield paid passively for simply holding a balance. Critics argue some reward programs are functionally identical to yield with different labelling, which is exactly the arrangement current and proposed rules are trying to define more precisely.
Disclaimer: This article is intended solely for informational purposes and should not be considered trading or investment advice. Nothing herein should be construed as financial, legal, or tax advice. Trading or investing in cryptocurrencies carries a considerable risk of financial loss. Always conduct due diligence.
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