Yield-Bearing Stablecoins Challenge Dominance of Tether, Circle

Even as they look increasingly likely to be shunned under new US regulations, a rapidly growing crop of stablecoins that pay interest to holders is emerging as a threat to market leaders Tether Holdings SA and Circle Internet Group Inc.

Issuers including Spark Protocol and Figure Markets promise to share interest income generated by their stablecoins with users, turning the tokens from a blockchain-based means of transfer into something more akin to a savings product. The market share of such instruments has more than trebled to over $13 billion since late 2024, according to JPMorgan analysts. They already account for more than 6% of the $243 billion stablecoin space and could claim as much as half of it if they maintain their current trajectory, the analysts added.