A growing number of investors are starting to relocate their liquidity from traditional instruments such as Treasury accounts and money market funds to decentralized financial (Defi) platforms, because anticipation is breaking around possible American federal reserve rate reductions.
Data and financial trends on chains show that some of the trillions of dollars that are bound by assets with fixed -income incomes prepares to accept decentralized, revenue -generating strategies. Defi Stablecoin Lending has emerged as an important beneficiary of this trend.
What can you do with cutting backs such as smart money?
Accumulate large public network dials where Genius ACT -Emitents can spend their stable coins ($ sol $ sui $ ETH are the most important networks)
Transfer your bank dollars to digital dollars aka stable coins ($ USDC and $ USDT … https://t.co/op4ffa23ot
– Martyparty (@martypartymusic) July 16, 2025
The Tradfi image: trillions in cash with a low yield
From July 2025, American money market funds have around $ 7.07 trillion in assets, with revenues that currently vary between 4.2% and 4.4%. At the same time, the US Treasury Securities Market, a pillar of the global financial system, has around $ 28.7 trillion in excellent offerings.
Related: Can Algorand’s immediate finality and Defi Surge ignite a big rally to $ 1?
The proceeds on these government bonds, although historically competing, will soon be less attractive if the Federal Reserve will continue with interest rate letings later this year. On July 15, three-year-old Treasury comments provide around 3.93%, while ten-year bonds amount to 4.50%.
Defi’s advantage: earn up to 22% on stablecoins
With expectations for falling rates in traditional markets, smart investors are investigating digital alternatives. Stablecoin pairs on large Defi platforms currently generate annual revenues between 12% and 22%, based on the demand for lending.
This revenue is paid to users who offer liquidity to decentralized payment and loan protocols. An important advantage of this Polish is that since both sides of the trading couple are linked to the US dollar (eg USDT/USDC), participants are not exposed to the “perishable loss” that can influence other types of Defi -investments. These Pools also allow immediate recordings (minus standard blockchain gas costs) and are not subject to main loss, as long as the Stablecoins hold their pen.
How the capital rotation works
The infrastructure for this shift is now being built up. Public block chains such as Ethereum, Solana and Sui become central hubs for Stablecoin issue, a trend that is supported by proposed legislation such as the US Genius Act.
Related: Hong Kong introduces Stablecoin Regulation, launches a high threshold license regime
This new framework makes it easier for digital dollars to be transferred from traditional bank accounts to Stablecoins. Those stablecoins can then be used directly in Defi -Leenpools, so that the activity of the Wall Street money market is effectively moved to the blockchain.
Safeguard: The information presented in this article is only for informative and educational purposes. The article does not constitute financial advice or advice of any kind. Coin Edition is not responsible for any losses as a result of the use of the aforementioned content, products or services. Readers are advised to be careful before taking action with regard to the company.
