Ethena Labs’ USDe has rapidly ascended to become the fastest-growing stablecoin in history, achieving an impressive $10 billion in Total Value Locked (TVL) in just 500 days. This unprecedented growth is largely attributed to a significant legislative shift in the United States: the enactment of the GENIUS Act.
The Regulatory Catalyst: The GENIUS Act
The GENIUS Act, or the Guiding and Establishing National Innovation for U.S. Stablecoins Act, marks a pivotal moment for stablecoin regulation in the United States. Enacted in July 2025, this comprehensive federal framework introduces stringent requirements, including 1:1 reserve backing and robust federal oversight. Crucially, its most impactful provision is the prohibition on regulated stablecoin issuers paying yields to end-users. This effectively transforms traditional stablecoins into depreciating assets for holders, prompting a substantial migration of capital in search of yield opportunities elsewhere.
USDe's DeFi-Driven Ascent
Against this backdrop, Ethena Labs' USDe emerged as a primary beneficiary. By leveraging decentralized finance (DeFi) mechanisms, USDe is able to offer attractive yields, circumventing the restrictions imposed on federally supervised entities by the GENIUS Act. This strategic advantage has drawn considerable institutional and retail capital, propelling USDe past its competitors and underscoring how regulatory changes, while seemingly restrictive, can inadvertently foster innovation and create new avenues for yield-hungry investors within the dynamic crypto landscape.
