SEC Approves Interest-Bearing Stablecoin YLDS, Opening 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 decision not only marks the recognition of regulatory agencies for innovation in crypto finance but also indicates that stablecoins are evolving 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 attracting large-scale institutional funds after Bitcoin.

Reasons for SEC Approval of YLDS

In 2024, a well-known stablecoin issuer achieved an annual profit of up to 13.7 billion USD, surpassing the profitability of traditional financial giants. These profits primarily came from the investment returns on reserve assets, but were unrelated to ordinary holders. Interest-bearing stablecoins are precisely targeting this breakthrough.

The core of interest-bearing stablecoins lies in the "redistribution of asset income rights". It not only maintains stability but also allows holders to directly enjoy the income by tokenizing the income rights of underlying assets. This model of "holding coins to earn interest" lowers the participation threshold for users and achieves "democratization of income".

The reason why YLDS has received approval from the SEC is mainly because it complies with current securities regulations. As an interest-bearing stablecoin that can generate returns, its structure is similar to traditional fixed-income products, clearly falling under the category of "securities", which avoids regulatory disputes. This also provides a reference for other similar projects seeking regulatory approval.

Nevertheless, this approval does not immediately change the regulatory dilemmas faced by traditional stablecoins. The industry generally expects that the U.S. stablecoin regulatory bill may gradually be implemented in the next 1 to 1.5 years. In regions where stablecoin regulations have already been introduced, adjustments to the existing regulatory framework may be needed when dealing with interest-bearing stablecoins that possess securities attributes, or consideration may be given to including them in the regulatory scope of tokenized securities.

The Impact of Interest-bearing Stablecoins

The SEC's approval of YLDS signals that stablecoins may evolve from a "cash alternative" into a new type of asset with dual attributes of both "payment tool" and "yield tool", which 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 round-the-clock on-chain trading, offering significant advantages in capital efficiency and instant settlement capabilities. These features may attract more institutional investors to incorporate them into their cash management strategies.

Research institutions are optimistically predicting that interest-bearing stablecoins will experience 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 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 the process of de-dollarization, the digital on-chain world continues to gravitate towards the US dollar. Whether it is the widespread use of US dollar stablecoins or the tokenization wave initiated by Wall Street institutions, the US is continuously strengthening the influence of dollar assets in the crypto market.

Conclusion

The approval of YLD is not only a compliance breakthrough in crypto innovation but also a milestone in the democratization of finance. It reveals the ongoing market 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 in 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 realize the vision of inclusive finance.