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 users a stablecoin that accrues daily interest while operating 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. Key features of YLDS include daily interest accrual at the SOFR rate minus 0.50%, peer-to-peer transfers without intermediaries, 24/7 trading and redemption in USD and other stablecoins, and self-custody of tokens. Unlike algorithmic or crypto-backed stablecoins, YLDS is backed by the same assets held by prime money market funds, ensuring stability and reliability.
Regulatory Changes in Stablecoin Sector
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. The SEC's approval process for YLDS began over a year ago, signaling a potential shift in stablecoin regulations.
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 recent executive order on digital assets by the Trump administration 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 underscores a shift in regulatory approaches to stablecoins, paving the way for further integration into traditional financial systems and blockchain.
