From Float to Yield: How Banks can Integrate Defi and Offer Stablecoin Yield Safely - Powered by Fireblocks

Technology and client demand are converging: banks can deploy stablecoin deposits into pooled, KYC'd, RWA-collateralised lending venues today. What's missing is the regulatory scaffolding — the economic model is novel, prudential treatment is undefined, and supervision hasn't caught up.

Two implementation choices would create uncontested ground: separate institutional DeFi from retail/permissionless DeFi, and separate it from tokenised repo. From there, regulators should recognise an asymmetric permissioning model (permissioned borrowers, permissionless suppliers) and define the prudential treatment of bank-held positions in tokenised credit venues.