SEC Approves First Interest-Bearing Stablecoin in U.S.
The Securities and Exchange Commission (SEC) has approved YLDS, the first interest-bearing stablecoin registered as a security in the United States. Pegged to the U.S. dollar, YLDS offers a yield of 3.85% and operates under SEC oversight.
Unlike traditional stablecoins like Tether (USDT) and USD Coin (USDC), YLDS allows users to earn daily interest while maintaining liquidity. This represents a significant shift in financial services, raising questions about the relevance of traditional banks.
Issued by Figure Certificate Company, YLDS requires users to complete a KYC process to earn interest. The stablecoin is backed by prime money market fund assets and its yield is tied to SOFR minus 0.50%. Users can redeem YLDS for U.S. dollars or other stablecoins during U.S. banking hours.
The approval of YLDS comes as stablecoins attract increasing regulatory attention. The SEC recently launched the Cyber and Emerging Technologies Unit (CETU) to focus on fraud related to blockchain and other emerging technologies.
With a market capitalization exceeding $230 billion, stablecoins are poised for significant growth. YLDS, as a regulated yield-bearing alternative to unregulated stablecoins, could set a precedent for the industry.
Figure Markets CEO Mike Cagney envisions YLDS being used for exchange collateral, cross-border transactions, and payment networks. The stablecoin will initially be available to verified users, with broader access expected in the coming weeks.