The U.S. Securities and Exchange Commission (SEC) has approved YLDS, the first interest-bearing stablecoin registered as a security. Developed by Figure Markets, YLDS offers a stablecoin that accrues daily interest within a fully regulated framework.
What Makes YLDS Different?
Unlike popular stablecoins such as USDT (Tether) and USDC (USD Coin), YLDS is officially registered as a security with the SEC. This classification aligns it with stocks and bonds, ensuring compliance with U.S. financial regulations. YLDS features daily interest accrual at SOFR minus 0.50%, peer-to-peer transfers, 24/7 trading and redemption, and self-custody of tokens. It is backed by assets similar to those held by prime money market funds, ensuring stability and reliability.
Impact on Stablecoin Regulation
Figure Markets CEO Mike Cagney called YLDS a 'transformative play' in the financial sector. It could reshape cross-border payments, exchange collateral, and traditional payment networks while accelerating TradFi and blockchain integration. The SEC’s approval process for YLDS began over a year ago, signaling potential shifts in stablecoin regulations as stablecoins' popularity grows, now surpassing $225 billion.
The Future of Regulated Stablecoins
With the SEC’s approval of YLDS, experts predict the emergence of more yield-bearing stablecoins under similar frameworks. However, regulatory approvals may take six to twelve months for new entrants. Meanwhile, U.S. policymakers are focusing more on stablecoins, while major institutions like PayPal, BitGo, and Ripple expand their presence in this area, indicating further institutional support.
The SEC’s approval of YLDS could be a turning point in the regulation and development of stablecoins as new financial instruments, paving the way for more regulated and reliable products in this field.
