Figure Market Obtain US SEC Approval to Issue the First Interest-bearing Stablecoin
Figure Markets' YLDS, the first SEC-approved interest-bearing stablecoin, offers 0.5% annual yield, a regulated alternative to traditional banking and existing stablecoins.
On February 18, 2025, the U.S. Securities and Exchange Commission’s (SEC) grant Figure Markets approval to issue the first interest-bearing stablecoin YLDS.
The stablecoin, designated YLDS, is the brainchild of Figure Markets, a digital assets firm. YLDS will be pegged to the US dollar, offering users an annualized yield of 0.5%, a rate considerably lower than current savings account yields but representing a novel approach to stablecoin functionality.
Figure Market to Issue Stablecoin (YLDS)
Unlike leading stablecoins such as USD Coin and Tether, which currently operate in a regulatory gray area, YLDS will be officially registered with the SEC as a security. This classification places it within the same financial category as stocks and bonds, providing a degree of regulatory certainty absent in its competitors.
Figure CEO Mike Cagney, in an interview with Fortune, emphasized the transformative potential of YLDS, suggesting it could potentially render traditional banking services less necessary for certain individuals and transactions. The SEC’s approval concludes a regulatory process spanning over a year, since Figure Technology’s initial application.
Furthermore, this development occurs amidst a surge in demand for stablecoins. The overall market capitalization of stablecoins has nearly doubled from its bear market low, reaching approximately $225 billion, according to DefiLlama.
The inherent volatility of cryptocurrencies necessitates stablecoins; these digital assets are designed to maintain a stable value, typically pegged to a fiat currency like the US dollar, and backed by equivalent reserves, often US Treasuries.
SEC Regulatoin on Stablecoin
The stablecoin market is highly competitive, with established players like Ripple and PayPal entering the field. Tether (USDT), the market leader, boasts a market capitalization exceeding $140 billion (CoinGecko data), generating substantial profits (an unaudited $13 billion in 2024) through interest earned on its reserves – interest not shared with its users. USDC, the second-largest stablecoin, follows a similar model. This lack of yield-sharing is a key differentiator for YLDS.
Moreover, YLDS aims to carve a niche by offering users a daily interest rate, a feature lacking in many of its competitors. While other yield-bearing stablecoins exist, they often operate outside the US or lack regulatory clarity. The SEC’s previous scrutiny of unregistered stablecoins, including Binance’s defunct offering, highlights the regulatory risks involved in this space.
The SEC’s approval of YLDS, according to Cagney, provides a crucial competitive advantage by mitigating concerns about the stability and security of withdrawals. The registration as a security necessitates a Know Your Customer (KYC) process for purchasers, a standard anti-fraud and anti-money laundering measure.
