The SEC has approved YLDS, a yield-bearing stablecoin by Figure Markets, registered as a security. This new approach could impact financial markets.
Features of YLDS
YLDS is distinct from traditional stablecoins like USDT and USDC due to its official SEC registration. It offers users daily interest accrual at SOFR minus 0.50%, akin to prime money market funds. Users can conduct P2P transactions and trade and redeem YLDS 24/7. Features include self-custody of tokens and interest payments in USD or additional YLDS.
Shift in Stablecoin Regulation
Figure Markets CEO Mike Cagney described YLDS as a “transformative play” in the financial sector. He believes YLDS will reshape cross-border payments and the integration of traditional finance (TradFi) with blockchain. The SEC began the approval process for YLDS over a year ago, indicating potential changes in stablecoin regulations. As the stablecoin market grows, exceeding $225 billion, regulatory clarity becomes increasingly important.
Future of Regulated Stablecoins
With YLDS's approval, analysts expect more yield-bearing stablecoins to emerge under similar frameworks, though the registration process may take six to twelve months. US attention towards stablecoins is growing, as highlighted by recent administrative actions and Congressional efforts to formalize a regulatory framework.
The SEC's approval of YLDS may signify a new phase in the development and regulation of stablecoins in the US and globally, affecting the financial ecosystem.
