Bernardo Brites is co-founder and CEO of Trace Finance, a regulated banking correspondent that connects stablecoin settlement to local banking systems in Brazil, the United States and emerging markets. In this opinion piece he argues that yield products need to be separated clearly from the payment tokens they are built around. Trace Finance operates on regulated, bank-connected payment infrastructure and may benefit from the policy direction discussed. The views are his own.

Stablecoins have moved beyond a debate about issuance. Policymakers face a harder task. They must separate the payment token from the financial product built around it. A token that redeems at par and holds liquid reserves presents one set of risks. A product that pays a holder for keeping that token presents another.

That separation will shape the next phase of stablecoin regulation. A yield feature can be deposit-taking, lending, a securities offering, or a reward programme, depending on how it works. The label on the token tells a little about the regulator. The legal and economic design of the return matters more.

The US GENIUS Act gave stablecoin issuers a clear starting point. The law requires permitted issuers to maintain identifiable reserves at least equal to outstanding payment stablecoins. It also bars an issuer from paying interest or yield merely because a person holds its token. Those rules address two direct questions. Can the holder redeem, and what assets support that redemption?

The next question is less settled. The Act does not expressly settle every arrangement in which an affiliate, platform, lender, or other third party pays a return connected to a stablecoin.

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