21 banks plan a dollar stablecoin by 2027; yield possible via DeFi but holders face risks beyond banks' coverage.

Twenty-one major financial institutions plan to launch a U.S. dollar stablecoin in the first half of 2027, aiming to enhance payment and settlement systems. While the GENIUS Act prohibits issuers from paying interest on these stablecoins, holders could earn yield by using independent DeFi protocols that lend the tokens to borrowers. However, this introduces risks such as smart contract failures, liquidity issues, and lack of issuer guarantees, meaning holders bear potential losses. The project is still developing details like governance and reserve management, and corporate adoption will depend on reliable liquidity and risk transparency in stressed conditions.