SEC Approves First Interest-Bearing Stablecoin YLDS, Opening a New Era of Stablecoin Yields

Recently, the U.S. Securities and Exchange Commission (SEC) approved the first interest-bearing stablecoin YLDS launched by Figure Markets. This decision not only reflects the recognition of crypto financial innovation by U.S. regulators but also indicates that stablecoins are transitioning from mere payment tools to compliant yield-bearing assets. This could open up broader development opportunities for the stablecoin industry, making it another innovative field that can attract large-scale institutional funds after Bitcoin.

Reasons for YLD's SEC Approval

In 2024, a well-known stablecoin issuer's annual profit reached 13.7 billion USD, surpassing some traditional financial giants. These profits mainly come from investment returns on reserve assets (such as U.S. Treasury bonds), but ordinary users cannot benefit from them. This is precisely the breakthrough point that interest-bearing stablecoins hope to disrupt the existing landscape.

The core of interest-earning stablecoins lies in the "redistribution of asset income rights": while maintaining stability, it allows holders to directly enjoy the income by tokenizing the income rights of the underlying assets. This model not only addresses the pain points of most users but also achieves "democratization of income."

The reason why YLDS can gain SEC approval is that it complies with the current U.S. securities regulations. Since the U.S. has not yet established a systematic regulatory framework for stablecoins, different regulatory agencies have differing definitions of stablecoins. However, YLDS, which is a yield-generating interest-bearing stablecoin, has a structure similar to traditional fixed-income products and clearly falls under the category of "securities," making it easier to be included in regulatory oversight.

Although the approval of YLDS indicates a continued positive attitude of U.S. crypto regulation, it does not immediately change the regulatory challenges faced by traditional stablecoins. The industry expects that the U.S. stablecoin regulation bill may gradually be implemented in the next 1 to 1.5 years.

The Rise of Interest-bearing Stablecoins and Market Impact

The SEC's approval of YLDS indicates that stablecoins may evolve from a "cash alternative" into a new type of asset with dual attributes of both "payment tool" and "yield tool." This will accelerate the institutionalization and dollarization process of the crypto market.

Interest-bearing stablecoins not only generate stable returns but also improve capital turnover through intermediary-free and round-the-clock on-chain trading. Some research institutions have pointed out that hedge funds and asset management firms have begun to incorporate stablecoins into their cash management strategies. The approval of YLDS will further alleviate institutional compliance concerns and increase their participation.

Some analyses suggest that interest-bearing stablecoins will experience explosive growth in the next 3 to 5 years, capturing about 10-15% of the stablecoin market, and becoming another category of crypto assets that can attract significant institutional attention and capital investment after Bitcoin.

The rise of interest-bearing stablecoins will further consolidate the dominance of the US dollar in the crypto world. Despite the physical world accelerating its de-dollarization, the digital on-chain world continues to gravitate towards the dollar. Whether it's the widespread adoption of dollar stablecoins or the tokenization wave driven by Wall Street institutions, the influence of dollar assets in the crypto market is continuously strengthening.

Conclusion

The approval of YLDS is not only a compliance breakthrough in crypto innovation but also a milestone in the democratization of finance. It reveals the market's eternal demand for "money making money." With the improvement of regulatory frameworks and the influx of institutional funds, interest-bearing stablecoins may reshape the stablecoin market and enhance the dollarization trend of crypto financial innovation. However, this process also needs to balance innovation and risk, avoiding the pitfalls of the past. Only in this way can interest-bearing stablecoins truly achieve the goal of benefiting more people.