Generic Protocol bets on private stablecoin model with GUSD launch as Congress battles over yield

Generic Protocol has launched GUSD, positioning it as the first natively private stablecoin built on the Morpho lending protocol. GUSD operates as a "meta-stablecoin" that aggregates existing dollar assets like USDC and USDT, but crucially, it routes the generated yield back to the distribution layer—including end-users, networks, and applications—rather than allowing issuers to retain it. This model aims to realign incentives and address the contested issue of who captures stablecoin yield. Furthermore, GUSD offers opt-in privacy at the protocol level, allowing users to shield transactions while still earning yield, avoiding reliance on centralized issuers. The launch coincides with intense debate in the U.S. Congress regarding stablecoin rewards, where some argue that issuer-controlled yield models could destabilize traditional banking deposits, while others fear restrictions could stifle innovation. Generic's decentralized, yield-first approach seeks to position itself as infrastructure rather than a competing dollar issuer.

(Source：The Block)