What is Interest Bearing Asset?

Traditionally, an interest bearing asset is any asset that earns interest for its holder. Interest bearing assets typically consist of liquid assets (mainly cash and balances, interest due from banks, trading and available-for-sale securities), non-liquid assets (various financial assets designated at fair value, held-to-maturity investments, and gross loans), and other interest bearing components of assets. Interest bearing assets in the blockchain and crypto industry are quite common, and can include any cryptocurrency or crypto-related financial instrument that earns interest for their holder. Interest bearing assets are often utilized through blockchain's advancing financial paradigm, decentralized finance (DeFi).