Aave Opens Stablecoin Yield Tech as DeFi Targets Mainstream Finance

Aave is currently the largest lending decentralized finance (DeFi) protocol, with a total value locked (TVL) of over $12.8bn, per DeFiLlama. 

The company said in a blog post that businesses can now use the technology that powers Aave's consumer savings app to offer their own customers yield on stablecoins without building the underlying infrastructure themselves. The technology allows businesses to offer stablecoin yield products using strategies powered by Aave or other compatible crypto vaults.

AAVE, the protocol's native token, traded at $91.24 as of 14:33UTC on 9 Jul, rising 4.8% on the news with a market capitalization of $1.46bn.

The move comes as traditional financial firms increasingly compete with crypto companies in areas such as trading, payments and tokenized assets. Some crypto-native businesses are responding by moving further down the stack, seeking to provide the infrastructure that banks, fintechs and other companies use rather than competing with them directly for customers.

Yield rules unclear

Aave Labs did not specify whether the service would be available to US businesses. The question is important because the GENIUS Act, enacted in 2025, bars stablecoin issuers from paying interest or yield directly to holders while leaving uncertainty around products offered through exchanges, wallets and other intermediaries.

Aave's model does not fit neatly into that restriction. The service is designed to generate returns by allocating deposited funds across different crypto strategies rather than simply paying users for holding a stablecoin. But that distinction could be blurred by upcoming legislation in the US.

Banks have pushed for tighter restrictions on stablecoin yield products, arguing they could draw deposits away from regulated lenders and compete with traditional savings accounts without equivalent safeguards. Crypto companies have opposed broader restrictions, arguing that third-party rewards and yield products should remain available to consumers. The dispute has become one of the sticking points in negotiations over the CLARITY Act, which still awaits a Senate vote.

Aave Labs did not immediately respond to a request for comment from Sandmark.

Stablecoins gain ground

Along with offering customers fixed-rate returns on stablecoin deposits, businesses can also choose which stablecoins and yield strategies to utilize, according to Aave. 

Stablecoins are digital assets that are designed to maintain a steady value by being pegged 1:1 to a fiat currency. Such tokens are increasingly being used for payments and savings, not just crypto trading. The total stablecoin market has grown to more than $311.8bn, up 23% from a year earlier, according to DeFiLlama. 

DeFi targets businesses

The move underscores a broader shift in DeFi, with crypto-native companies increasingly building tools for traditional financial firms rather than only for crypto users. 

Vaults are one example of that push. A vault is a pooled crypto product that takes users' deposits and automatically puts the funds to work according to a predefined strategy, such as lending them out to earn yield. Some crypto companies have promoted vaults as a potential onchain counterpart to traditional investment funds.

Morpho, the third-largest DeFi protocol with nearly $7bn in TVL, has also been expanding into institutional markets. Last month, BitGo announced plans to offer institutional clients access to DeFi vaults built on Morpho through its custody platform. The companies said the move aims to make onchain lending strategies more accessible to traditional firms.

Binance Research said in an April 2026 report that traditional finance, centralized crypto platforms and DeFi protocols are increasingly converging into a single financial ecosystem, with vault-based lending accounting for 22.8% of DeFi borrowing this year.

Standard Chartered said in a 24 Jun note that Aave was well placed to benefit from this trend, which could increase demand for lending and borrowing infrastructure. The bank forecast the AAVE token could rise to $3,500 by the end of 2030 and outperform Bitcoin (BTC) and Ether (ETH) over the period.