GUSD is built on the Morpho DeFi lending protocol and, according to Generic, is a "meta-stablecoin."
It combines features of existing dollar-denominated stablecoins USDC, USDT, and USDS. The key difference is the asset's yield, which is not retained by the issuer but is channeled back into the ecosystem—to applications, networks, and end users.
Aragon CEO and Generic founder Anthony Leutenegger assured that the protocol is focused on a neutral blockchain infrastructure. Thanks to its complete decentralization, the project does not act as an issuer and does not control coin issuance. GUSD features built-in optional privacy at the protocol level. This means users can hide their balances and transactions while retaining access to yield. The solution's architecture eliminates direct dependence on the issuer and is implemented as a non-custodial layer on Ethereum, Leutenegger stated.
In the US, approval of a cryptocurrency regulation law has stalled. The delays are linked to the debate over whether holding stablecoins should generate returns for their holders. Both large banks like JPMorgan and smaller regional banks are opposed. Bank of America CEO Brian Moynihan estimates that allowing stablecoins to pay interest could result in up to $6 trillion in US bank deposits being transferred to crypto assets.
US crypto exchange Coinbase fears that caps on rewards could strengthen the position of existing financial market players and "slow down blockchain innovation."