Interest-bearing stablecoin YLDS approved by SEC, opening a new era of stablecoin yields

The U.S. Securities and Exchange Commission (SEC) recently approved Figure Markets' first interest-bearing stablecoin YLDS. This move not only reflects the regulatory body's recognition of innovation in crypto finance but also signifies that stablecoins are transitioning from mere payment tools to compliant yield-generating assets. This could open up broader development space for the stablecoin sector, making it an emerging innovative field that can attract large-scale institutional funds following Bitcoin.

Analysis of the Reasons for SEC Approval of YLDS

In 2024, a well-known stablecoin issuer's annual profit reached 13.7 billion USD, surpassing some traditional financial giants. This profit mainly came from the investment returns of reserve assets, but holders could not benefit from it. This is precisely the breakthrough that interest-bearing stablecoins hope to disrupt the existing pattern.

The core of interest-bearing stablecoins lies in "the redistribution of asset income rights". They can maintain stability while tokenizing the income rights of underlying assets, allowing holders to directly enjoy the returns. This model of "holding coins to earn interest" realizes "income democratization" and lowers the participation threshold for users.

The reason why YLDS has received SEC approval is mainly because it complies with the current U.S. securities regulations. As an interest-earning stablecoin, the structure of YLDS is similar to traditional fixed-income products, clearly falling under the category of "securities," thus avoiding regulatory disputes. In addition, YLDS distributes the underlying asset income through smart contracts and employs a strict KYC verification mechanism, which provides a reference for similar projects in the future.

The Impact of Interest-Bearing Stablecoins on the Crypto Market

The SEC's approval of YLDS signifies that stablecoins may evolve from "cash alternatives" into a new type of asset that possesses dual attributes of both "payment tools" and "yield tools." This will accelerate the institutionalization and dollarization process of the cryptocurrency market.

Yield stablecoins not only generate stable returns but also improve capital turnover through intermediary-free, round-the-clock on-chain trading. Some research institutions have pointed out that hedge funds and asset management institutions have begun to incorporate stablecoins into their cash management strategies. After YLDS is approved, it is expected to further enhance institutional investors' acceptance and participation in such stablecoins.

The large-scale influx of institutional funds will drive rapid growth in the interest-bearing stablecoin market. Research institutions predict that interest-bearing stablecoins will experience explosive growth in the next 3-5 years, potentially capturing about 10-15% of the stablecoin market, becoming another category of crypto assets that attracts significant institutional attention and investment after Bitcoin.

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

Conclusion

The approval of YLDS is not only a regulatory 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 requires balancing innovation and risk to avoid repeating past mistakes. Only in this way can interest-bearing stablecoins truly achieve the goal of providing stable returns for more people.