Income on Stablecoins: How It Works and Regulation in the US and Brazil

What are Stablecoins with Revenue?

Stablecoins, cryptocurrencies linked to stable assets such as the US dollar, have evolved from simple means of payment to investment vehicles. The novelty that is moving the market is the ability to generate passive income on these digital assets, a concept known as "stablecoin yield" or "yield-bearing stable tokens".

This functionality is one of the core innovations of the ecosystem.Decentralized Finance (DeFi)Instead of keeping their stablecoins standing in a wallet, users can lend them to loan protocols, provide liquidity to trading pools, or participate in “staking” strategies on platforms that offer annual returns, often higher than traditional savings.

How are revenues generated?

Income from stablecoins comes from various sources within the DeFi ecosystem:

• The loan protocols:Platforms like Aave and Compound allow users to lend their stablecoins to other participants, who offer cryptocurrencies as collateral.
• Providers of Liquidity (LP)By providing asset pairs (e.g. USDC/ETH) on decentralized exchanges (DEXs) such as Uniswap, users receive a portion of the trading fees generated in that pool.
• Vaults and Yield Aggregators:Platforms like Yearn.finance automate and optimize fund allocation among the best return protocols available, seeking the highest risk-adjusted returns.

The Regulation Forward: CLARITY Act in the US

The agreement between the White House and U.S. lawmakersLaw of ClarityThe focus of the deal, as, is precisely on regulating stablecoins revenue and stable tokens that generate interest.

This is a significant “pain point” for the traditional banking sector, which sees these products as direct competition for paid deposits. The law seeks to set clear rules on who can offer these services, reservation requirements, operations transparency and consumer protection. A successful U.S. regulation can serve as a model for other jurisdictions, including Brazil, bringing more legal certainty and potentially attracting massive institutional capital to the DeFi sector.

Tokenization of Funds: The Coinbase Case

In addition to the regulatory discussion, technological advances realize these opportunities.CoinbaseApex and Apex Group tokenizing a Bitcoin Revenue Fund on the Base network is an emblematic example. Anthony Bassili, of Coinbase Asset Management, highlighted that the tokenized stock class of the fund verifies “identity and eligibility at the token level.”

This means that complex financial products, such as income funds, are being represented as tokens on the blockchain, with compliance rules embedded in the code itself.This innovation can pave the way for income funds on stablecoins with the same efficiency, transparency and global accessibility.

Global Scene and Implications for Brazil

While the US is debating the CLARITY Act, other regions are moving too.The Digital EuroIn Paraguay, tax reports for crypto assets advance, and El Salvador explores banking tokenization.

For the Brazilian investor, this global scenario is crucial. Bitcoin’s quest to stay in the $70,000 range amid concerns about inflation reinforces the role of stablecoins as a refuge of value within the crypto ecosystem. However, access to stablecoins income by Brazilians still occurs mostly via international platforms of DeFi or CeFi (Centralized Finance), requiring redundant attention to security, platform reputation and tax aspects.

Brazil does not yet have a specific regulation for income generated on DeFi protocols. Therefore, it is the investor's responsibility to declare these gains as "other income" in the income tax declaration, whileining a strict control of all transactions.

Risks and Important Considerations

Searching for income on stablecoins is not free of risk. It is essential to understand them:

• Counterparty Risk / Smart ContractThe money is kept by open-source protocols. Bugs or exploits can lead to loss of funds.
• The regulatory risk:Changes in legislation, such as the one being discussed in the U.S., can impact the supply and returns of these products.
• Risk of own Stablecoin:Despite being “stable”, there is a risk of the anchor asset (such as the dollar) dropping if the issuer does not maintain adequate and audited reserves.
• Market risk (Impermanent Loss)For liquidity providers, sudden fluctuations in the price of pool assets can result in losses when compared to simply holding the assets.

The future of cryptocurrency revenue

The convergence between tokenization (such as the Coinbase fund), progressive regulation (Clarity Act) and the pursuit of hedge against inflation (macroeconomic context) is creating a fertile ground for stablecoins yield products to mature.

In the medium term, we can expect the emergence of regulated tokenized funds focused on stablecoins yield, offered by major resource managers, combining the efficiency of blockchain with the familiar structure of investment funds.

For the Brazilian market, the evolution of crypto asset regulation (such as the recent regulatory instruction of the Federal Revenue) and the possible future regulatory framework are essential steps for local institutions to offer similar products with due supervision, bringing more options and security to investors in the country.