Trezor Opens DeFi Yield Route for Stablecoins as Rules Hang in the Balance

Trezor has partnered with Morpho, a DeFi lending protocol, to offer yield on deposits of the USDC and USDT stablecoins through its hardware wallets. The service routes funds into lending strategies curated by Steakhouse Financial, which generate returns from onchain lending activity. 

The launch comes as US lawmakers scrutinize whether stablecoin-related products should be allowed to offer yield on stablecoin balances. Under the EU's Markets in Crypto-Assets (MiCA) framework, crypto-asset service providers and issuers alike are prohibited from offering yield on stablecoin deposits. Neither rulebook explicitly covers yield generated from partnerships with decentralized lending platforms.  

A demand for yield 

Hardware wallets have traditionally been used to store digital assets offline rather than deploy them into yield-generating strategies, reflecting a long-standing trade-off between security and capital efficiency. 

"The point of building this yield feature inside Trezor Suite was to remove the trade-offs," said Trezor chief technology officer Tomáš Sušánka. 

The approach isn't new for software wallets. Self-custodial crypto wallet MetaMask set up a comparable integration with lending protocol Aave in July 2025, allowing users to route USDC and USDT deposits into the protocol directly from the wallet interface. Trezor is extending a similar feature to its hardware wallet users. 

Trezor said every transaction requires approval on the physical device. Yield is generated by borrowing demand on Morpho rather than by token emissions. It "brings yield to a much broader audience, including many who have never interacted with decentralized finance before," said Paul Frambot, CEO and co-founder of Morpho. Rates will fluctuate with market conditions.

The regulatory loophole 

The feature arrives at a critical time for the regulatory treatment of stablecoin yield. The GENIUS Act, signed into law in 2025, prohibits stablecoin issuers from offering any form of interest to holders. However, it does not apply to third-party arrangements and digital asset platforms. US banking trade groups have argued that this constitutes a loophole that enables regulatory arbitrage, as affiliated platforms can effectively replicate deposit interest through so-called "platform rewards."

Research from a Department of the Treasury advisory council identified the $6.6tn US transactional deposit market as "at risk" from stablecoins, while Citigroup research estimates stablecoins could displace bank deposits equal to $182bn-$908bn.

The issue has also surfaced in discussions around the CLARITY Act, a market structure bill now making its way through the Senate. Banking groups have lobbied lawmakers to broaden restrictions on stablecoin-related yields, arguing that digital asset platforms can replicate deposit interest through rewards programmes without being subject to the same regulatory requirements as banks. 

The latest version of the bill, released in early May, extends the restriction to digital asset service providers, prohibiting the payment of interest or yield deemed functionally equivalent to bank deposit interest. However, the provision does not apply to yield generated through decentralized finance protocols.

Columbia Law School professor David Krause noted in a January blog post that unrestricted stablecoin yield products could drive a contraction in bank lending capacity of more than $1.5tn, as retail deposits migrate toward higher-yielding alternatives outside the traditional banking system.  

Critics of moves to curb DeFi-connected stablecoin yield generation claim it would drive retail investors to less regulated offshore alternatives rather than eliminate the behaviour. 

Trezor Bitcoin analyst Lucien Bourdon told Sandmark that the yield-generation feature was built with the evolving regulations in mind. 

"The current debate has been about whether crypto firms should offer products that behave like bank deposits without being banks," he said in an e-mail. "It's not the same as asking whether stablecoin yield should exist at all."