SEC Approves First Interest-Bearing Stablecoin YLDS, New Opportunities Arise in the Stablecoin Market

Recently, the U.S. Securities and Exchange Commission (SEC) approved the first interest-bearing stablecoin YLDS launched by Figure Markets. This decision not only demonstrates the regulatory body's recognition of innovation in crypto finance but also indicates that stablecoins are shifting from mere payment tools to compliant yield-bearing assets. This could open up new development space for the stablecoin industry, making it another innovative area that can attract large-scale institutional funds after Bitcoin.

Reasons for SEC Approval of YLDS

In 2024, the annual profit of a large stablecoin issuer reached $13.7 billion, surpassing some traditional financial giants. This profit mainly comes from the investment returns of reserve assets, but it is unrelated to stablecoin holders. Interest-bearing stablecoins are precisely targeting this market gap.

The core of interest-bearing stablecoins lies in the redistribution of asset yield rights. In the traditional stablecoin model, users sacrifice the time value of their funds for stability. Interest-bearing stablecoins, while maintaining stability, tokenize the yield rights of the underlying assets, allowing holders to directly enjoy the returns. This "holding coins earns interest" model lowers the participation threshold for users and achieves "democratization of earnings."

Although transferring the underlying asset returns may reduce the profits of the issuing institutions, it significantly enhances the attractiveness of interest-bearing stablecoins. In the current environment of global economic instability and high inflation levels, the demand for financial products that can provide stable returns is continuously rising. Products like YLDS, which are both stable and can offer higher returns than traditional bank rates, will undoubtedly be favored by investors.

However, the key to the SEC approving YLDS lies in its compliance with existing securities regulations. Since the United States has not yet established a dedicated regulatory framework for stablecoins, interest-bearing stablecoins, due to their structure similar to traditional fixed income products, clearly fall under the category of "securities," thus avoiding regulatory disputes. This lays the foundation for YLDS to obtain SEC approval.

The Impact of Interest-Bearing Stablecoins

The SEC's approval of YLDS not only indicates a continuous improvement in the U.S. regulatory attitude towards cryptocurrencies but also suggests that stablecoins may evolve from "cash alternatives" into a new type of asset that combines the dual attributes of "payment tools" and "yield tools." 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 transactions, exhibiting significant advantages in capital efficiency and instant settlement capabilities. With the increased participation of institutional investors, the interest-bearing stablecoin market is expected to experience rapid growth. It is anticipated that in the next 3-5 years, interest-bearing stablecoins could account for approximately 10-15% of the stablecoin market, becoming another category of crypto asset that attracts substantial institutional attention and investment following Bitcoin.

Despite the accelerating de-dollarization in the physical world, 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 driven by Wall Street institutions, the influence of dollar assets in the crypto market is continuously strengthening in the United States. The SEC's approval of YLDS further indicates the support of US regulators for interest-bearing stablecoins similar to US Treasury bonds, which will attract more projects to launch similar products.

Conclusion

The approval of YLDS is not only a regulatory breakthrough in crypto innovation but also an important milestone in the democratization of finance. It reveals the market's ongoing demand for "money making money." With the improvement of regulatory frameworks and the influx of institutional funds, interest-bearing stablecoins are expected to reshape the stablecoin market and reinforce the dollarization trend of crypto financial innovation. However, in this process, balancing innovation and risk management is crucial to avoid repeating past mistakes. Only on the foundation of robust development can interest-bearing stablecoins truly realize the vision of inclusive finance.