# Where a business can earn yield on USDC and USDT, and what the risks are

Issuers can't pay interest on stablecoins under the GENIUS Act or MiCA, so yield comes from lending protocols, platform rewards or tokenized Treasury funds, each with risks a bank deposit doesn't have. Know where the return comes from and how fast you can withdraw.

By Pavel Skalin, Founder & CEO, Align · Updated 2 November 2026 · 4 min read · https://alignlabs.dev/guides/earn-yield-on-usdc

## Key takeaways

1. Issuers can't pay you interest on stablecoins: the GENIUS Act bans it for US payment stablecoin issuers, and MiCA bans it for issuers and crypto-asset service providers in the EU.
2. Yield on a stablecoin balance comes from somewhere else: lending it to borrowers on a lending protocol, rewards a platform pays from its own revenue, or a fund holding short-term government debt.
3. Each source carries risks a bank deposit doesn't: smart contract bugs, borrower defaults, withdrawal delays when a pool is fully lent, and the issuer's own risk. None is covered by deposit insurance.
4. For a business, the questions are where the yield comes from, how fast you can withdraw, what happens in a bad week, and how it's taxed and accounted for.

## The short answer

Stablecoin issuers can't pay holders interest, by law in the US and the EU. So any yield on a USDC or USDT balance comes from putting the money to work elsewhere, and each route has its own risk:

- **Lending protocols**, where borrowers pay interest to depositors
- **Platform rewards**, paid by an exchange or provider from its own revenue, where the rules are still being settled
- **Tokenized funds** holding short-term government debt, usually with eligibility limits
- **Converting to fiat** and using a bank deposit or money market fund, the traditional route

For a business, treat yield as a treasury decision: know where the return comes from, how quickly you can get the money back, and what happens if something goes wrong.

## Why issuers can't pay interest

**United States.** The GENIUS Act bans permitted payment stablecoin issuers from paying holders interest or yield "solely in connection with the holding, use, or retention" of a payment stablecoin. The OCC's final rule of 21 October 2026, effective with the Act on 18 January 2027, keeps that ban and anti-evasion provisions. It dropped a proposed presumption that yield paid through an affiliate or related third party breaks the rule, and will review arrangements case by case instead. See [the GENIUS Act guide](https://alignlabs.dev/guides/genius-act-for-non-us-businesses).

**European Union.** MiCA's Article 50 bans issuers of e-money tokens, such as USDC and EURC, and crypto-asset service providers providing services related to them, from granting interest. See [EURC vs USDC](https://alignlabs.dev/guides/eurc-vs-usdc).

The issuer earns the return on the reserves backing the token, typically short-term government debt and bank deposits, and keeps it.

## Where yield comes from

| Source | Where the return comes from | Main risks |
|---|---|---|
| Lending protocol | Interest paid by borrowers, who post collateral | Smart contract bugs, oracle errors, borrower defaults if collateral falls fast, withdrawal delays when a pool is fully lent |
| Platform rewards | The platform's own revenue, such as a share of what it earns on reserves | The platform's solvency, changes to the terms, regulatory change |
| Tokenized Treasury fund | Short-term US government debt held by a fund, represented by a token | Eligibility and minimums, redemption terms, the fund manager and custodian |
| Bank deposit or money market fund, after converting | Interest on a deposit, or a fund's holdings | Conversion costs both ways; deposit insurance limits |

**Lending protocols.** Jupiter Lend, on Solana, is an example. Its documentation says depositors supply single assets such as USDC to lending pools and receive a receipt token, such as jlUSDC, whose value grows as interest accrues. Borrowers pay interest, of which lenders receive 90% and the protocol keeps 10%. The rate depends on how much of the pool is borrowed, and the displayed rate can include temporary incentives. Jupiter lists smart contract, oracle, borrower default, market and liquidity, stablecoin depeg and wallet risks, and says withdrawals can be delayed in extreme volatility or mass exits.

**Tokenized Treasury funds.** Funds such as BlackRock's BUIDL and Circle's USYC hold short-term US government debt and issue tokens representing shares. Secondary reports citing rwa.xyz put the sector at about $15.65 billion in September 2026. These funds commonly limit who can invest, so check eligibility, minimums and redemption terms before relying on one.

## Questions a finance team should ask

1. **Where does the return come from?** If no one can explain it simply, don't deposit.
2. **How fast can we withdraw, and what can delay it?** Read the withdrawal terms for stressed markets, not normal ones.
3. **What's the worst plausible week?** A protocol exploit, a fall in collateral, a depeg of the stablecoin itself.
4. **Who holds the assets?** Your own wallet, a provider's custody, or a fund's custodian.
5. **How is it taxed and accounted for?** The return is usually taxable income, and the position may not be a cash equivalent. See [stablecoins as cash equivalents](https://alignlabs.dev/guides/stablecoins-cash-equivalents-accounting).
6. **How much should be in it?** Keep the working capital you need for payroll, VAT and suppliers outside any yield product.

## How this works with Align

Align holds what you receive as USDC or USDT, or as EURC for euros, and offers Earn on that balance: up to 8% a year, added to your balance as it accrues, with withdrawals at any time. Yield is provided by Jupiter. Rates change over time and aren't guaranteed, and your balance isn't a bank deposit and isn't covered by deposit insurance. The risks of lending protocols described above apply. Align is registered with FINTRAC in Canada as a money services business; it isn't a bank and isn't authorized under MiCA, and this guide is not an offer of crypto-asset services in the EU.

## Sources

- OCC, [OCC advances U.S. digital asset leadership with final rule to implement GENIUS Act](https://www.occ.gov/news-issuances/news-releases/2026/nr-occ-2026-92.html) and [Bulletin 2026-50](https://www.occ.gov/news-issuances/bulletins/2026/bulletin-2026-50.html) (21 October 2026)
- HLC, [OCC finalizes its GENIUS Act rule, part 1: permitted activities and prohibition on yield](https://www.hlc.com/en/publications/occ-finalizes-its-genius-act-rule-part-1-permitted-activities-and-prohibition-on-yield) (October 2026)
- Regulation (EU) 2023/1114, [Markets in Crypto-Assets (MiCA)](https://eur-lex.europa.eu/eli/reg/2023/1114/oj/eng), Article 50
- Jupiter, [Lend: Earn](https://docs.jup.ag/user-docs/earn/lend/earn) (accessed November 2026)
- Bitcoin.com News, [BlackRock and Circle lead tokenized Treasuries as market value climbs](https://news.bitcoin.com/blackrock-and-circle-lead-tokenized-treasuries-as-market-value-climbs-to-15-20b/) (September 2026), citing rwa.xyz

## Common questions

### Can Circle or Tether pay my company interest on USDC or USDT?

No. The GENIUS Act bans permitted payment stablecoin issuers from paying interest or yield to holders solely for holding, using or retaining a stablecoin, and MiCA's Article 50 bans e-money token issuers from granting interest. The issuer keeps the return on its reserves.

### Can an exchange or platform pay rewards on stablecoins?

Under the GENIUS Act this is still being settled. The OCC's final rule of 21 October 2026 keeps the ban on issuers and anti-evasion provisions, but dropped a proposed presumption that yield paid through affiliates or related third parties breaks the rule, in favour of case-by-case review. In the EU, MiCA also bans crypto-asset service providers from granting interest on e-money tokens.

### Where does lending yield come from?

From borrowers. On a lending protocol such as Jupiter Lend on Solana, borrowers post collateral and pay interest, and depositors share it in proportion to their deposits. Rates move with demand: Jupiter says each pool's rate is driven by how much of it is borrowed.

### Can I withdraw at any time?

Usually, but not always. Jupiter's documentation says withdrawals can be delayed in extreme volatility or mass exits, because funds may be tied up in active loans, and that dynamic withdrawal limits apply. Keep the money you need for payroll and suppliers outside any yield product.

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This guide is general information, not legal, tax or financial advice. Rules and providers' terms change; check the sources linked above and take advice on your own situation.

## Related guides

- [USDT vs USDC for business payments: which to hold and which to send](https://alignlabs.dev/guides/usdt-vs-usdc-for-business)
- [Can stablecoins count as cash? FASB's 2026 proposal and how to account for USDC](https://alignlabs.dev/guides/stablecoins-cash-equivalents-accounting)
- [The GENIUS Act: what non-US businesses need to know](https://alignlabs.dev/guides/genius-act-for-non-us-businesses)
- [EURC vs USDC: when a business should hold euros on chain instead of dollars](https://alignlabs.dev/guides/eurc-vs-usdc)