The Rollup Is the Stablecoin Yield Ban Good? with Frax founder Sam Kazemian
Mar 27, 2026
Sam Kazemian, founder of Frax Finance and creator of the fractional-algorithmic stablecoin and frxUSD, talks policy and market strategy. He unpacks the politics behind yield restrictions. He explains how rules reshape distribution and who gains. He explores product workarounds, banks’ interest in stablecoins, and where investors might look next.
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Yield Restriction Is A Political Compromise
- The Clarity Act's yield restriction is political compromise, not final law, and will keep evolving.
- Sam Kazemian argues this dynamic benefits DeFi-native, Genius‑compatible stablecoins like FraxUSD while constraining exchange-led open-ended yield programs like USDC Earn.
Build Activity Based Yield Distribution
- Prepare products for activity‑based yield distribution rather than open unconditional yields.
- Sam explains Frax already streams risk‑free activity‑based yield (e.g., Curve/Aave integrations and EtherFi cards) so teams should build similar architectures.
Tether And DeFi Coins Gain From Yield Ban
- Tether and DeFi‑native stablecoins are likely winners from yield restrictions because they don't rely on open off‑chain distributor yields.
- Sam highlights Tether's historical no‑yield model and Frax's on‑chain yield mechanisms as competitive advantages.