Bank stablecoins can earn DeFi yield, but holders bear the risk: Katana CEO

Katana CEO Matt Fisher has said a dollar stablecoin planned by 21 financial institutions for the first half of 2027 could generate yield through independent DeFi protocols, although holders would assume risks not covered by its issuing banks. Summary Twenty-one financial institutions plan to introduce a U.S. dollar stablecoin in the first half of 2027. The GENIUS Act prohibits permitted payment stablecoin issuers from paying interest or yield to holders. Fisher said independent protocols could earn returns by lending stablecoins to identifiable borrowers. Smart-contract, liquidity, oracle, and custody failures would generally leave depositors carrying any losses. Katana CEO Matt Fisher told crypto.news that the GENIUS Act restriction applies to permitted stablecoin issuers, not necessarily to how holders use tokens after receiving them, though he described his position as a market-structure view rather than legal advice. “The GENIUS Act stops the issuer from paying yield; it doesn’t stop the holder from putting the dollar to work somewhere the issuer doesn’t control. Once a compliant stablecoin leaves the issuer and moves into an independent protocol, yield can come from genuine ec...