Anchorage Digital has launched a rewards program for holders of USDtb and Ethena’s USDe, creating a yield-bearing stablecoin product that technically complies with federal law by routing payouts through an offshore entity.
Anchorage Uses Cayman Entity to Sidestep GENIUS Act Yield Ban
26 November 2025 - 08:43 CET
By Stu Clelland
By framing the payouts as "rewards" rather than interest, the federally chartered crypto bank is attempting to bypass the strict prohibitions on yield-bearing payment instruments introduced by the GENIUS Act earlier this year.
The compliance shuffle
The structure relies on a careful separation of legal entities. While Anchorage Digital Bank serves as the qualified custodian and issuer of USDtb, backed by BlackRock’s BUIDL fund, the rewards are not paid by the bank. According to the program's terms and conditions, the rewards are offered by Anchorage Digital Neo Ltd, a Cayman Islands-based entity explicitly described in disclosures as "not subject to regulatory oversight."
This distinction is the entire point. The GENIUS Act bans stablecoin issuers from paying interest to prevent unregulated banking activities. By ensuring the "rewards" come from a non-bank, offshore affiliate rather than the issuer itself, Anchorage is offering institutional clients the returns that were supposed to be regulated out of existence, all while maintaining the veneer of a federal charter.
"We’re setting the standard for how digital dollars can operate in a transparent and compliant way within the US financial system," said Nathan McCauley, CEO of Anchorage Digital, in a press statement that touted "regulatory integrity" but omitted the specific offshore mechanics of the yield generation.
Institutional arbitrage
The move addresses a massive inefficiency for institutional capital. Since the regulatory crackdown, treasuries have been forced to choose between compliant, zero-yield stablecoins or offshore, high-yield instruments. Anchorage is betting it can offer both: US-domiciled custody for the principal, and Cayman-domiciled payouts for the yield.
The program allows clients to earn on idle assets without staking or lockups. This is particularly significant for USDe, Ethena’s synthetic dollar. By integrating USDe alongside USDtb, which is backed by US Treasuries, Anchorage is effectively legitimizing Ethena’s exotic delta-neutral hedging strategy for US institutional adoption, provided the yield takes a detour through the Caribbean.
