If the latter, I think that explains why stablecoins are popular in countries with weak institutions.

In a country with strong laws, and strong rule-of-law, "Code is Law" is a solution in search of a problem. But in a country with weak laws, it can be a lifesaver.

The GENUIS act and I think MICA both disallow that part, exactly for this reason... traditional banks were seeing the writings on the wall and lobbied for such yield distributions to remain their own privilege only. For now.

But you can pretty easily find similar/better yield using DeFi and stake/bond some of your crypto assets in various strategies.

The difference is that there are virtually no minimum and usually no KYC... but there are also not many guardrails/gatekeeping, which leave the place to many scams/traps. It's best to stick to the largest platforms/communities and not fall for insane APY claims.