The SEC has approved YLDS, the first stablecoin that accrues interest and is registered as a security. This event may have a significant impact on the stablecoin market.
Features of YLDS
YLDS stands out from popular stablecoins like USDT and USDC as it is officially registered as a security with the SEC. This allows it to operate in full compliance with U.S. financial regulations. Key features of YLDS include:
- Daily interest accrual at SOFR minus 0.50%, - Peer-to-peer transfers without intermediaries, - 24/7 trading and redemption options, - Self-custody of tokens without reliance on third-party custodians.
Unlike algorithmic stablecoins, YLDS is backed by assets similar to those held by prime money market funds, ensuring reliability and stability.
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 and traditional payment networks. YLDS is part of a broader push by the company to incorporate tokenized real-world assets. Reports state that Figure Markets and Figure Technology Solutions have facilitated over $41 billion in transactions on the Provenance Blockchain.
The Future of Regulated Stablecoins
With the SEC's approval of YLDS, experts anticipate more interest-bearing stablecoins could emerge under similar frameworks. However, regulatory approvals may take six to twelve months for new entrants. Meanwhile, major institutions like PayPal and BitGo have begun to embrace stablecoins, signaling further institutional adoption of blockchain-based financial instruments.
The SEC's approval of YLDS could be a turning point. As stablecoin regulation becomes more significant, such initiatives may lead to substantial changes in financial markets.
