SEC Approves First Yield-Bearing Stablecoin: A Game Changer for Crypto Investors

The U.S. Securities and Exchange Commission (SEC) has made a significant move in the cryptocurrency landscape by approving the first interest-bearing stablecoin, YLDS, developed by Figure Markets. This approval marks a departure from the regulatory gray area that major stablecoins like USDC and USDT currently inhabit, potentially enhancing consumer protection and investor confidence in the crypto sector.

YLDS, a public security offered through Figure Markets' wholly owned subsidiary, Figure Certificate Company, is a fixed price, daily accrual public security native to the Provenance Blockchain. It offers holders the ability to earn interest, transfer securities peer-to-peer, and transact 24x7. 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 signifies its status as a financial security.

The SEC's approval of YLDS 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.

Figure Markets CEO Mike Cagney emphasized that YLDS' SEC registration signifies its status as a financial security. He stated, "We see tremendous applications for YLDS, including exchange collateral, cross-border remittances, and payment rails. But we see this as a catalyst to a much larger migration of TradFi to blockchain."

Starting today, both individuals and institutions can purchase YLDS through Figure Markets. Figure Markets, working with its sister company Figure Technology Solutions, has been a leader in the real-world asset (RWA) space on blockchain, supporting over $41B in RWA transactions on the Provenance Blockchain, with over $13B in RWA total locked value on-chain. YLDS will add to that number.

"We're excited to support YLDS on Provenance Blockchain," said June Ou, Interim Executive Director of the Provenance Blockchain Foundation. "We expect, and will support, significant third-party developer interest to use YLDS and its fiat rails in DeFi, payments, and other applications built on Provenance Blockchain. We will also be integral in wrapping YLDS for applications on other L1 blockchains."

YLDS pays an interest rate of SOFR minus 0.50%. Interest is accrued daily and paid monthly in USD or YLDS. Holders can buy/sell YLDS using USD and other stablecoins 24x7 on Figure Markets, and can off-ramp to fiat during US banking hours.

The approval of YLDS by the SEC is a significant development in the stablecoin landscape, offering investors a yield-bearing stablecoin with enhanced regulatory clarity. As the crypto market continues to evolve, investors can expect more innovative products and increased regulatory scrutiny to ensure consumer protection and market stability.