Stablecoin yield bans could push capital offshore into ‘unregulated instruments’
Proposed restrictions under the US CLARITY Act could drive demand for offshore and synthetic dollar products as investors seek yield outside regulated markets, experts warn.
The proposed restrictions on stablecoin yields under the US CLARITY Act risk driving capital out of regulated markets and into offshore, opaque financial structures.
Colin Butler, head of markets at Mega Matrix, said banning compliant stablecoins from offering yield would not protect the US financial system, but instead sideline regulated institutions while accelerating capital migration beyond US oversight.
“There’s always going to be demand for yield,” Butler told Cointelegraph, adding that if compliant stablecoins can’t offer it, capital will simply move “offshore or into synthetic structures that sit outside the regulatory perimeter.”