The First SEC-Approved Yield Stablecoin? What Does It Mean for Crypto?

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.

What Makes YLDS Different?

Unlike popular stablecoins such as USDT (Tether) and USDC (USD Coin), 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.

Here are the features:

• Daily Interest Accrual – Pays interest at SOFR (Secured Overnight Financing Rate) minus 0.50%, similar to prime money market funds.

• Peer-to-Peer Transfers – Users can send YLDS directly without intermediaries.

• 24/7 Trading & Redemption – Available for transactions in USD and other stablecoins anytime, with fiat off-ramps during U.S. banking hours.

• Self-Custody – Users control their YLDS tokens without relying 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.

A Major 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 (RWAs). 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.