SEC Approves First Interest-Bearing Stablecoin

The U.S. Securities and Exchange Commission (SEC) has made a significant move in the cryptocurrency landscape by approving the first interest-bearing stablecoin. The stablecoin, named YLDS, is developed by digital asset company Figure Markets and is pegged to the U.S. dollar. It offers users a yield of 0.5%, similar to cash in a savings account.

YLDS is set to be registered with the SEC as a security, placing it in the same financial category as stocks or bonds. This approval marks a departure from the regulatory gray area that major stablecoins like USDC and USDT currently inhabit. Figure CEO Mike Cagney, in an interview with Fortune, emphasized that YLDS' SEC registration signifies its status as a financial security.

The SEC's website confirms that Figure's application was approved on Tuesday. However, a spokesperson for the agency did not immediately respond to a request for comment.

This development could pave the way for more regulated stablecoins in the U.S. market, potentially enhancing consumer protection and investor confidence in the cryptocurrency sector. As the SEC continues to monitor and regulate the crypto industry, this approval may signal a shift towards more mainstream acceptance of stablecoins as financial instruments.