The U.S. Securities and Exchange Commission (SEC) has approved YLDS, the first stablecoin registered as a security. Developed by Figure Markets, YLDS offers users a stablecoin that accrues daily interest and operates within a fully regulated framework.
Features of YLDS
Unlike popular stablecoins such as USDT and USDC, which operate in regulatory uncertainty, 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 offers:
- Daily interest accrual at SOFR (Secured Overnight Financing Rate) minus 0.50%, similar to prime money market funds. - Peer-to-peer transfers without intermediaries. - 24/7 trading and redemption in USD and other stablecoins with fiat off-ramps during U.S. banking hours. - Self-custody, allowing users to control their YLDS tokens without reliance on third-party custodians.
Unlike algorithmic or crypto-backed stablecoins, YLDS is backed by the same assets held by prime money market funds. This ensures stability and reliability while offering a yield that mirrors traditional financial instruments. Interest earned from YLDS is paid monthly in USD or additional YLDS tokens, giving users flexibility in managing their assets.
Shift in Stablecoin Regulation
Figure Markets CEO Mike Cagney called YLDS a “transformative play” in the financial sector. According to Cagney, YLDS could reshape cross-border payments, exchange collateral, and traditional payment networks, further accelerating the integration of TradFi and blockchain. YLDS is part of Figure Markets’ broader push into tokenized real-world assets. Per reports, the company, alongside Figure Technology Solutions, has facilitated over $41 billion in RWA transactions on the Provenance Blockchain, with $13 billion in total locked value (TVL). By integrating stablecoins with financial markets, Figure aims to drive mainstream adoption of blockchain-based financial products. The SEC’s approval process for YLDS began over a year ago, signaling a potential shift in stablecoin regulations. As stablecoins grow in popularity—now worth over $225 billion, according to DeFiLlama—regulatory clarity becomes increasingly important.
The Future of Regulated Stablecoins
With the SEC’s approval of YLDS, experts anticipate that more yield-bearing stablecoins could emerge under similar frameworks. However, regulatory approvals may take six to twelve months for new entrants. Meanwhile, U.S. policymakers are paying closer attention to stablecoins. The Trump administration’s recent executive order on digital assets highlighted stablecoin growth, while Congress continues working on a formal regulatory framework. Major institutions like PayPal, BitGo, and Ripple have also expanded into stablecoins, signaling further institutional adoption of blockchain-based financial instruments.
The approval of YLDS by the SEC marks a significant milestone in the development of interest-bearing stablecoins registered as securities. This paves the way for new blockchain-based financial instruments that could transform the traditional financial sector and accelerate its integration with new technologies.
