SEC approves the first interest-bearing stablecoin YLDS, ushering in 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 move not only demonstrates the recognition of U.S. regulators for innovation in crypto finance but also indicates that stablecoins are transitioning from merely being payment tools to compliant yield-bearing assets. This could open up broader development opportunities in the stablecoin sector, making it another innovative area that can attract large institutional funds following Bitcoin.

Analysis of the Reasons for SEC Approval of YLDS

In 2024, Tether, the issuer of USDT, achieved an annual profit of 13.7 billion USD, surpassing traditional financial giant Mastercard. These profits primarily stem from investment income on reserve assets, but are unrelated to USDT holders. This is precisely the breakthrough that interest-bearing stablecoins have identified.

The core of interest-bearing stablecoins lies in the "redistribution of asset revenue rights". In the traditional stablecoin model, users sacrifice the time value of their funds in exchange for stability. Interest-bearing stablecoins maintain stability while tokenizing the revenue rights of the underlying assets, allowing holders to directly enjoy the benefits. This "hold coin to earn interest" model removes barriers to earning and realizes "democratization of profits".

The reason YLDS received SEC approval is primarily due to its compliance with current U.S. securities regulations. Since the U.S. has not yet established a systematic regulatory framework for stablecoins, YLDS, which is a yield-generating interest-bearing stablecoin, is structured similarly to traditional fixed-income products and clearly falls under the category of "securities," leaving no room for regulatory disputes.

YLDS distributes interest income from underlying assets to holders through smart contracts, and adopts a strict KYC verification mechanism to reduce regulatory concerns about anonymity. These compliance designs provide a reference for similar projects in the future. It is expected that in the next 1-2 years, we may see more compliant interest-bearing stablecoin products emerge.

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

The SEC's approval of YLDS signifies that stablecoins may evolve from "cash substitutes" into a new type of asset that embodies both "payment tools" and "yield tools," which will accelerate the institutionalization and dollarization process of the cryptocurrency market.

Interest-bearing stablecoins not only generate stable returns but also improve capital turnover through intermediary-free and around-the-clock on-chain transactions, offering significant advantages in capital efficiency and instant settlement capabilities. It is expected that in the next 3-5 years, interest-bearing stablecoins will experience explosive growth, potentially capturing around 10-15% of the stablecoin market share, becoming another category of crypto assets 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 large-scale adoption of USD stablecoins or the tokenization wave initiated by Wall Street institutions, the influence of dollar assets in the cryptocurrency market is continuously strengthening, and this trend of dollarization is being reinforced.

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 to avoid repeating past mistakes. Only in this way can interest-bearing stablecoins truly enable more people to benefit from financial innovation.