SEC Approves Interest-Bearing Stablecoin YLDS, Kicking Off a New Wave of Stablecoin Innovation

Recently, the U.S. Securities and Exchange Commission (SEC) approved the first interest-bearing stablecoin YLDS launched by Figure Markets. This decision not only marks the recognition of regulatory agencies for innovations in crypto finance but also signifies that stablecoins are transitioning from mere payment tools to compliant yield-bearing assets. This could open up broader development space for the stablecoin sector, making it another innovative field that can attract large-scale institutional funds following Bitcoin.

Reasons for SEC Approval of YLDS

In 2024, a certain stablecoin issuer's annual profit reached 13.7 billion USD, surpassing some traditional financial giants. These profits mainly came from investment returns on reserve assets (such as U.S. Treasury bonds), but users could not benefit from it. This is precisely the breakthrough that interest-bearing stablecoins are targeting.

The core of interest-bearing stablecoins lies in the "redistribution of asset income rights": while maintaining stability, they tokenize the income rights of underlying assets, allowing holders to directly enjoy the earnings. This model of "earning interest by holding coins" removes barriers to income and realizes "democratization of earnings."

The reason YLDS has received SEC approval is that it complies with the current U.S. securities regulations. As there is currently no systematic regulatory framework for stablecoins, the regulation of stablecoins in the U.S. is primarily based on existing laws. YLDS, as an interest-bearing stablecoin that can generate returns, has a structure similar to traditional fixed-income products and clearly falls under the "securities" category, leaving no regulatory disputes.

Although the approval of YLDS indicates a continued positive trend in the U.S. cryptocurrency regulatory attitude, it cannot change the regulatory dilemmas facing traditional stablecoins in the short term. Industry insiders expect that U.S. stablecoin regulatory legislation may gradually take shape within the next 1 to 1.5 years.

YLD distributes the underlying asset returns through smart contracts and adopts a stringent KYC verification mechanism, providing a compliance reference for similar projects in the future. In the next 1-2 years, more compliant interest-bearing stablecoin products may emerge, which will also encourage more countries and regions to consider relevant regulatory measures.

The Rise of Interest-bearing Stablecoins Accelerates the Institutionalization of the Crypto Market

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

Interest-bearing stablecoins not only generate stable returns, but also enhance capital turnover through intermediary-free and 24/7 on-chain trading, offering significant advantages in capital efficiency and instant settlement capabilities. Some research institutions have pointed out that hedge funds and asset management firms have begun to incorporate stablecoins into their cash management strategies.

There are optimistic views that interest-bearing stablecoins will see explosive growth in the next 3-5 years, capturing about 10-15% of the stablecoin market, becoming another category of crypto assets that can attract large-scale institutional attention and investment after Bitcoin.

Interest-bearing stablecoin strengthens the dominance of the US dollar

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 the process of dedollarization, the digital on-chain world continues to lean towards the US dollar. Whether it is the large-scale application of US dollar stablecoins or the tokenization wave initiated by Wall Street institutions, the influence of US dollar assets in the crypto market continues to strengthen.

This trend is difficult to reverse in the short term, as there are currently no more alternative choices for tokenized innovation and the cryptocurrency financial market besides dollar assets represented by U.S. Treasury bonds. The SEC's approval of YLDS indicates that U.S. regulators have given the green light for dollar-denominated interest-bearing stablecoins, which will undoubtedly attract more projects to launch similar products.

Conclusion

The approval of YLDS is not only a compliance breakthrough in crypto innovation but also a milestone in financial democratization. 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 to avoid repeating past mistakes. Only in this way can interest-bearing stablecoins truly fulfill the promise of inclusive finance.