Ripple Shows How to Generate Yield With USD Stablecoins

Ripple’s Jack McDonald outlines two key ways to earn yield with stablecoins: interest-bearing assets and on-chain DeFi strategies.
As RLUSD testing expands, stablecoin rewards are drawing regulatory attention, with Congress reconsidering restrictions under the GENIUS Act.

Stablecoins are no longer just digital stand-ins for dollars; they are fast becoming instruments for yield generation, and that is sparking new questions in crypto markets and in Washington. In the latest Crypto In A Minute series, Ripple’s SVP of Stablecoins, Jack McDonald, has outlined two key ways users are earning interest with stablecoins today.

Speaking in the segment, McDonald explained that investors can either hold interest-bearing stablecoins, where issuers share the returns generated on reserves, or they can use stablecoins on-chain in decentralized finance (DeFi) protocols. The latter involves lending stablecoins or supplying them as liquidity on platforms like Aave or Uniswap to earn returns.

“You bring greater efficiency and greater utility to your dollar while using it on-chain,” said McDonald, comparing the approach to a savings account that works within decentralized markets.

Is your capital sitting idle?@_JackMcDonald_, SVP Stablecoins at Ripple, says it doesn’t have to.

In the latest Crypto In One Minute, Jack explores two core ways stablecoins can generate yield:
✅ Direct Yield: Interest-bearing assets.
✅ Secondary Utility: Collateralizing for… pic.twitter.com/V9wZiJpSD1

— Ripple (@Ripple) January 7, 2026

Stablecoins Enter the Policy Arena as Ripple Expands RLUSD Testing

Amid these discussions, Ripple is actively positioning its RLUSD stablecoin for this next chapter. As CNF reported, the company has begun live testing RLUSD across Ethereum and Layer-2 networks such as Base and Optimism. While RLUSD is not currently interest-bearing, it represents Ripple’s broader goal to unlock financial utility on-chain.

The company also received conditional approval from the U.S. Office of the Comptroller of the Currency (OCC) to charter Ripple National Trust Bank, setting the foundation for future yield-bearing offerings under federal and state oversight.

But this utility shift is also drawing attention in Congress. As CNF detailed, the GENIUS Act previously prohibited yield-bearing stablecoins, a restriction now being reconsidered as lawmakers prepare to mark up the Market Structure bill.

Faryar Shirzad, posting on X, pointed out:

Congress already settled this in GENIUS—reopening it now only creates uncertainty and risks the future of the US dollar as commerce moves on-chain.

He added that banks benefit from over $360 billion annually in interest and fees from deposits and payments and warned that they view stablecoin rewards as competitive threats rather than prudential concerns. Independent studies from Charles River Associates and Cornell University found no measurable link between stablecoin adoption and reduced lending or community bank deposits.

Critics of the restrictions, including Coinbase CEO Brian Armstrong and Mike Novogratz, have called on Congress to support innovation.

“China has decided to pay interest on its own stablecoin… I worry we are missing the forest through the trees in the U.S.,” Armstrong wrote. He noted that China’s decision to pay interest on its digital yuan, as reported by the CNF, shows the competitive stakes.

“Rewards on stablecoins will not change lending one bit, but it does have a big impact on whether U.S. stablecoins are competitive,” he added.

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