Key takeout
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The ridiculous stubcoins containing yields include defi and synthetic models, supported by the Ministry of Finance.
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Profits from US and EU Prohibited Issuer Payments. Access is often restricted.
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Rebase and rewards are taxed as income when received.
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Risk remains: regulation, market, contracts, liquidity.
Passive income searches always direct investors towards assets such as dividend stocks, real estate, and government bonds.
In 2025, Crypto will add another competitor: stablecoins including yield. These digital tokens are designed to not only retain value against the dollar, but also generate stable income while sitting in your wallet.
However, before rushing in, it is important to understand what these stable rocks are, how they produce yields, and the applicable legal and tax rules.
Let’s break it down in stages.
What are stubcoins that contain harvest?
Traditional idiot drugs like Tether’s USDT (USDT) and USDC (USDC) are fixed in dollars, but don’t pay anything to hold them. The stable coins that support the yield are different. They automatically pass returns to the token holder from the underlying asset or strategy.
Currently, three major models are in use.
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Tokenized Ministry of Finance and Money Market Funds: These stability is supported by safe assets such as the short-term US Treasury Department and bank deposits. Yields from these holdings are distributed to the token holders by increasing the balance of tokens or adjusting their value. Simply put, you can think of them as blockchain-wrapped versions of traditional cash equivalent funds.
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Decentralized Finance (defi) Savings Wrapper: Protocols such as Sky (formerly Makerdao) allow users to lock Stablecoins such as Dai (Dai) into the “Saving Rate” module. Wrapping in tokens like SDAI will grow over time at the rate set by protocol governance.
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Synthetic yield model: Several innovative stubcoins, such as those with derivative strategies, generate yields from crypto market funding rates or staking rewards. Revenues may be high, but they fluctuate depending on the market situation.
Can you earn passive income from stubcoins with harvest?
Details may vary depending on the product, but the short answer is yes. This is a typical journey:
1. Select the Stablecoin type
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If you need lower risk and traditional support, look at tokenized Treasury-backed coins or money market fund tokens.
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If you’re satisfied with Defi’s risks, consider SDAI or similar savings wrappers.
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For higher potential yields (higher volatility), synthetic stability like Susde may be compatible.
2. Buy stablecoin or mint
Most of these tokens can be obtained on a centralized exchange by knowing the customer (KYC) requirements or directly from the protocol website.
However, some publishers have restricted access by geography. For example, many US retail users are unable to purchase tokenized Treasury coins due to securities laws (because they are treated as securities and are limited to qualified or offshore investors).
Also, Stablecoin Minting is usually limited. To mint, deposit the dollars with the publisher who creates new stablecoins. However, this option is not open to everyone. Many issuers limit the creation of banks, payment companies, or qualified investors.
For example, Circle (the publisher of USDC) allows Mint directly to only approved institutional partners. Retail users cannot send dollars to circles. They need to buy USDCs that are already in circulation.
3. Hold or bet on your wallet
Once you buy, simply keep these stupid drugs in your wallet and it may be enough to earn your harvest. Some use rebase (the balance increases daily), while others use wrap tokens that increase in value over time.
4. Use with Defi for additional revenue
In addition to the built-in yield, some holders will utilize these tokens in lending protocols, liquidity pools, or structured vaults to generate additional revenue streams. This adds complexity and risk, so proceed with caution.
5. Track and record your income
Tokens grow automatically, but most countries’ tax rules treat their increase as taxable income at the time of credit. Keep an accurate record of when and how much yield you received.
Did you know? Stubcoins, which bear some yield, distribute returns through token valuations instead of extra tokens. This means that the balance remains the same, but each token becomes redeemable over time for a more underlying asset. This subtle difference can affect how taxes are calculated in some jurisdictions.
Examples of stability that bears yield
Not all products that look like stablecoin supporting yields are actually one. Some are true silly, others are synthetic dollars, some are tokenized securities. Let’s understand how they break it down:
Stubcoin with true yield
These are fixed in the US dollar, backed by reserves and designed to provide yields.
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USDY (Ondo Finance): This is a tokenized memo backed by the short-term Treasury and bank deposits, and is only available to non-US users with full KYC and money laundering (AML) checks. Transfers to or inside the US are restricted. USDY acts like a retransportation method that reflects the Treasury yield.
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sdai (empty): SDAI is a DAI rapper who has been deposited into DAI’s savings rate. Your balance grows at a variable rate determined by manufacturer governance. It is widely integrated into Defi, but relies on smart contracts and protocol decisions rather than insured deposits.
Synthetic stability
These mimicry stubcoins use derivatives or other mechanisms rather than direct reserves.
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Susde (Ethena): “Synthetic Dollars” are stable with long spot codes and a short, lasting future. Susde holders will benefit from stakes on funding rates and rewards. Returns can be compressed quickly, and risks include market fluctuations and exchange exposure.
Tokenized cash equivalents
These are not stubcoins, but they are often used as “on-chain caches” in defi.
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Tokenized Money Market Funds (for example, BlackRock’s Buidl): Although it is not strictly a stubcoin, it has been tokenized by money market fund stocks. They pay monthly dividends in the form of new tokens. Access is limited to qualified investors and institutions, and although it is popular with the Defi protocol, it is generally out of reach of retail users.
2025 Stablecoin Rule Book You Should Know
Regulations are now central to whether they can hold stable coins that support a particular yield.
America (Genius Law)
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In 2025, the United States passed the Genius Act, the first federal law law. An important provision is the prohibition of issuers of payments that pay interest or interest directly to the holder.
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This means that tokens like USDC and PayPal USD (PYUSD) cannot simply reward you to hold them.
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The goal is to prevent stubcoins from competing with the bank or becoming unregistered securities.
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As a result, US retail investors are unable to legally receive passive yields from mainstream stubcoins. Typically, the harvest-containing version is constructed as securities and is either limited to qualified investors or provided by Offshore to non-US users.
European Union (MICA)
In the market for Crypto-Assets (MICA) frameworks, electronic money tokens (EMTs) issuers are also prohibited from paying interest. The EU treats Stablecoins strictly as a digital payment method, not a savings vehicle.
UK (Ongoing Rules)
The UK is finalizing its own stubcoin regime, focusing on issuance and custody. Although it is not an explicit ban yet, policy directions are consistent with the US and the EU. Stable coins must offer payments rather than yields.
Clear message: Always check if you are legally permitted to buy and hold yield idiots where you live.
Tax considerations for yield stable coins
Tax processing is just as important as choosing the right coin.
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In the US, staking style compensation, including rebase, is taxed as normal income when received, whether or not it is being sold. If you dispose of those tokens at a different value later, it will cause a capital gains tax. In addition to that, 2025 brings new reporting rules that make it mandatory for crypto exchanges to issue Form 1099-DA, requiring taxpayers to track their cost base per wallet, making keeping records more accurate than ever.
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In the EU and global, the new reporting rules (DAC8, CARF) means that transactions will be automatically reported to tax authorities from 2026 onwards.
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In the UK, the HMRC guidance classifies many Defi returns as income, and token disposal is also subject to capital gains tax.
Risks to keep in mind if you are considering yields for your stablecoins
A stubcoin that retains yield sounds attractive, but there is no risk.
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Regulatory risk: Laws change quickly, and can either shut out access or cause products to fall apart.
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Market risk: For synthetic models, yields depend on the volatile crypto market and can disappear overnight.
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Operational risk: Smart contracts, custody arrangements and governance decisions can all affect holdings.
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Liquidity risk: Some stubcoins either limit redemption to certain investors or impose lockups.
So chasing the yields on stubcoin can be rewarding, but it’s not the same as cash parking in your bank account. Each model carries its own trade-offs, whether negative or synthetic, supported by the Ministry of Finance.
The smartest approach is to carefully size your position, diversify across publishers and strategies, and always look to regulations and redemption. The best way to do this is to treat Sturecoin’s yield like an investment product, rather than risk-free savings.
This article does not include investment advice or recommendations. All investment and trading movements include risk and readers must do their own research when making decisions.
