GENIUS Act Spurs 75% Surge in Ethena USDe Market Cap to $9.3B

The supply of yield-bearing stablecoins has seen a dramatic rise following the enactment of the GENIUS Act on July 18, a legislative measure that prohibits stablecoin issuers from directly offering yield to holders. Despite this restriction, market participants have pivoted toward stablecoins that generate yield through on-chain staking mechanisms, with Ethena’s USDe and Sky’s USDS emerging as the most notable beneficiaries [1].

USDe, in particular, has experienced a 75% increase in its market capitalization since mid-July, reaching approximately $9.3 billion and securing the third-largest position in the stablecoin market [2]. This surge is attributed to a combination of regulatory clarity provided by the GENIUS Act and a strategic partnership with Anchorage Digital, which has enabled the token to operate in U.S. markets as a compliant yield-bearing stablecoin [2].

The circulating supply of USDe has expanded to over $9.49 billion, while USDS has seen its supply increase by 23% to nearly $4.81 billion, placing it in the fourth-largest stablecoin position [3]. These figures, according to analytics firm DefiLlama, highlight a shift in investor behavior toward protocols that facilitate yield generation through staking, lending, or exposure to real-world assets such as U.S. Treasuries [1].

Anthony Yim, co-founder of Artemis, has described the phenomenon as a paradoxical success for yield-bearing stablecoins, noting that the market is responding by seeking yield in alternative ways despite the legislative ban [3]. Julio Moreno of CryptoQuant echoed this sentiment, explaining that investors are increasingly turning to yield-bearing stablecoins and staked versions like sUSDe and sUSDS to maintain returns in a high-inflation environment [1].

The broader stablecoin market has also benefited from this trend, growing from $205 billion at the beginning of 2025 to $268 billion as of the time of writing—an increase of 23.5%. Analysts like Julio Moreno predict that the total stablecoin supply could approach $300 billion by year-end if the current growth trajectory continues [1].

Ethena’s Total Value Locked (TVL) has also surged to nearly $10 billion, placing the protocol among the top seven in the decentralized finance (DeFi) space [1]. The platform launched USDe in early 2024 using a delta-neutral model that pairs on-chain collateral with short perpetual swap positions to maintain a stable peg of $1. Initially met with skepticism due to its high-yield promises and volatility, Ethena has since diversified its collateral to include assets like Bitcoin and major stablecoins, and has incorporated third-party attestations to enhance trust and credibility [1].

The ENA token, Ethena’s governance token, has also seen a nearly 60% increase in price since mid-July, reaching $0.58 on CoinGecko [1]. This rise reflects the growing confidence in the platform and its ability to navigate the evolving regulatory landscape.

While some analysts remain cautious, noting that traditional finance’s push into tokenization could pose a long-term challenge to stablecoin growth, the immediate impact of the GENIUS Act has been to accelerate the adoption of compliant yield-bearing alternatives [1]. The current U.S. inflation rate of 2.7% makes the staked versions of USDe and USDS particularly attractive, as they offer real rates of return of 8.16% and 2.05%, respectively [1].

The continued expansion of yield-bearing stablecoins underscores a broader trend within the crypto market: the ability of innovative financial instruments to adapt in response to regulatory constraints. As the DeFi space matures, it remains to be seen whether this compliance-driven growth will translate into long-term stability or introduce new complexities in the evolving digital asset ecosystem [1].

Source: [1] The Block, [https://www.theblock.co/post/365414/ethenas-usde-stablecoin-market-cap](https://www.theblock.co/post/365414/ethenas-usde-stablecoin-market-cap)

[2] AInvest, [https://www.ainvest.com/news/ethereum-news-today-trump-signs-genius-act-banning-yield-bearing-stablecoins-2508/](https://www.ainvest.com/news/ethereum-news-today-trump-signs-genius-act-banning-yield-bearing-stablecoins-2508/)

[3] Crypto Economy, [https://crypto-economy.com/ethena-usde-climbs-to-third-largest-stablecoin-after-rapid-growth/](https://crypto-economy.com/ethena-usde-climbs-to-third-largest-stablecoin-after-rapid-growth/)