Anchorage Digital Aims to Pay 'Rewards' On Ethena's Tokens Under GENIUS Act

Why It Matters

The initiative could unlock a new, regulation‑friendly way for crypto platforms to offer yield to investors, potentially expanding the market for tokenized assets while keeping U.S. compliance at the forefront.

Key Takeaways

• Anchorage proposes compliant reward mechanism for token holders.
• Leverages GENIUS Act to bypass interest prohibition.
• Pilot focuses on Ethena's token ecosystem.
• Sets precedent for U.S. crypto yield products.
• Aims to attract institutional investors seeking regulated returns.

Pulse Analysis

The U.S. stablecoin regulatory framework, codified in the 2023 GENIUS Act, expressly bars the payment of interest on stablecoin holdings, a rule that has limited the growth of yield‑bearing crypto products in the domestic market. Anchorage Digital, a federally chartered custodian, is leveraging its regulatory expertise to design a compliant alternative that mimics interest without violating the statute. By treating payouts as “rewards” rather than interest, the firm hopes to unlock a new class of crypto‑centric cash‑flow products for institutional clients.

Anchorage’s proposed template will be piloted with Ethena, a token that represents a share of a decentralized credit‑risk pool. Holders will receive periodic reward distributions calculated from the underlying pool’s performance, but labeled as token‑specific incentives rather than interest. The architecture relies on smart‑contract automation, transparent accounting, and a custodial oversight layer that ensures each payout meets the legal definition of a reward. This approach satisfies the GENIUS Act’s prohibition while preserving the economic appeal of yield‑generating assets.

If successful, Anchorage’s model could become a blueprint for U.S. firms seeking to offer crypto yield products without triggering regulatory penalties. It signals a shift toward more nuanced interpretations of the stablecoin law, encouraging other custodians and issuers to explore reward‑based structures. Institutional investors, long wary of compliance risk, may now allocate capital to tokenized credit markets, potentially expanding liquidity and driving broader adoption of decentralized finance within the regulated financial system.