2025-02-21
The U.S. Securities and Exchange
Commission (SEC) has approved Figure Markets' new stablecoin, YLDS, making it
the first interest-earning stablecoin to be officially recognized as a public
security.
YLDS is a stablecoin that pays
interest.
It offers an annual percentage yield
(APY) of 3.85%, which is based on the Secured Overnight Financing Rate (SOFR)
minus 0.50%.
Users earn interest daily, and payments
are made every month in either U.S. dollars or YLDS tokens.
YLDS can be traded 24/7 on Figure
Markets, and users can also convert it to regular money (fiat currency) during
U.S. banking hours.
The SEC’s approval of YLDS signals its
willingness to regulate and support stablecoins that generate interest.
Figure Markets' CEO, Mike Cagney,
mentioned that the company applied for this approval more than a year ago.
He also questioned the role of
traditional banks, saying that if users can hold, earn interest, and spend
YLDS, they might not need a bank.
Figure Markets is the first company in the U.S. to get approval for an interest-earning stablecoin, but others are working on similar products.
Tether co-founder Reeve Collins is
launching a decentralized stablecoin later this year through the Pi Protocol,
which will allow users to earn interest on their holdings.
Governments worldwide are working on
stablecoin regulations.
The European Union, Hong Kong, and
Singapore have made more progress than the U.S. in creating rules for
stablecoins. Meanwhile, U.S. lawmakers are debating how to regulate them
properly.
On February 5, Republican Congressmen, French
Hill and Bryan Steil introduced the STABLE Act, which aims to provide clear
rules for stablecoin issuers.
However, former Commodity Futures
Trading Commission Chair Timothy Massad believes the proposal still has gaps
and is weaker than previous efforts.
