The SEC has approved YLDS, the first interest-bearing stablecoin registered as a security, allowing it to operate in a strictly regulated environment.
Features of YLDS
Unlike popular stablecoins such as USDT and USDC, YLDS is registered as a security with the SEC. This includes daily interest accrual at SOFR minus 0.50%, direct peer-to-peer transfers without intermediaries, 24/7 trading and redemption, and self-custody of assets without third parties. Backed by assets, YLDS offers stability and a yield that parallels traditional financial instruments.
Changes in Stablecoin Regulation
Figure Markets CEO Mike Cagney called YLDS a "transformative play" in the financial sector. YLDS could reshape cross-border payments and traditional payment networks, further accelerating the integration of TradFi and blockchain. Figure Markets has already facilitated over $41 billion in RWA transactions on the Provenance Blockchain.
The Future of Regulated Stablecoins
The SEC's approval of YLDS may prompt the emergence of more interest-bearing stablecoins under similar frameworks. However, new entrants might expect regulatory approvals to take six to twelve months. Major institutions like PayPal, BitGo, and Ripple have expanded into stablecoins, indicating further institutional adoption of blockchain-based financial instruments.
SEC's approval of YLDS opens a new path for regulated stablecoins, highlighting the importance of regulatory clarity amid the growing popularity of these instruments.
