Key Notes
- The SEC approved Figure Markets' YLDS, the first interest-bearing stablecoin registered as a security, offering a 0.5% daily yield.
- Figure’s CEO, Mike Cagney, calls YLDS a game-changer, questioning banks' role if users can earn and transact independently.
- YLDS buyers must complete KYC, and without verification, they can hold the asset but won’t receive daily interest.
The US Securities and Exchange Commission (SEC) has given the crypto industry a significant nod by approving the first-ever interest-bearing stablecoin. Figure Markets, a digital asset firm, received the green light for YLDS, a stablecoin pegged to the US dollar that offers daily yield payments to its holders.
Stable Coin News: Long time guest on The Office Space @FigureMarkets receives #SEC approval for their $YLDS interest bearing Stable Coin – the first of its kind.
The stablecoin, called YLDS and developed by the digital assets firm Figure Markets, will be pegged to the U.S.… pic.twitter.com/7a1dmEam54
— MartyParty (@martypartymusic) February 20, 2025
Regulatory classification sets YLDS apart from widely used stablecoins like USDT and USDC. Unlike other digital assets, YLDS will be officially registered with the SEC as a security. Inclusion in the same financial category as stocks and bonds establishes a structured regulatory framework for an industry historically operating in legal uncertainty.
Figure’s CEO, Mike Cagney, views this approval as a major shift in the finance sector. He questions the need for banks if individuals can hold assets, self-custody funds, earn interest, and transact independently.
“If I can hold this, if I can self-custody this, if it pays me interest, and I can actually use it to transact, what do I need a bank for?” Cagney told Fortune.
The SEC’s year-long approval coincides with rising demand for stablecoins. According to DeFiLlama , stablecoins market capitalization has nearly doubled from a crypto bear market low, reaching approximately $225 billion. These digital currencies act like digital versions of the dollar in crypto trading and DeFi. At the same time, traditional banks and financial companies are also beginning to use them for global transactions.
Stablecoins market capitalization reached over $225 billion. Source: DeFiLlama
YLDS Offers 0.5% Daily Yield, Unlike Tether’s Zero
Figure’s YLDS will stand out by offering a daily yield of 0.5% to holders. YLDS aims to outpace major players like Tether (USDT) to keep all their interest earnings instead of sharing them. Tether, for example, made a staggering $13 billion in unaudited profits in 2024—putting it on par with Mastercard’s $12.9 billion net income.
CEO Mike Cagney sees the interest-sharing model as YLDS’s competitive edge. While yield-bearing stablecoins exist, many operate outside US regulations or in a legal gray zone. The SEC has scrutinized such tokens before, including Binance’s now-defunct stablecoin, though the case was dropped in 2024.
The race is heating up. Ripple and PayPal are rolling out their own stablecoins, but YLDS is stepping in with a regulatory edge. That could make it a more attractive bet for investors and institutions alike.
YLDS Goes Public — KYC Now a Must for Buyers
Due to YLDS’s launch as a publicly registered security, buyers must complete a Know-Your-Customer (KYC) process. The requirement aligns with financial regulations designed to combat fraud and money laundering. If YLDS lands in the hands of someone who has not passed Figure’s KYC process, they can still hold the asset—but they will not earn the daily interest.
Figure plans to make YLDS available for users starting Thursday, marking a major milestone in the evolution of stablecoins. While the global stablecoin market crossed $200 billion in early 2025, the financial ecosystem is increasingly recognizing these digital assets as a bridge between traditional banking and decentralized finance, according to a recent report by SP Global.
Stablecoins impressive growth highlighted in orange. Source: SP Global
Regulators worldwide are crafting new rules to manage stablecoin risks while harnessing their potential. Jurisdictions like the EU, Hong Kong, and Singapore have already introduced comprehensive regulatory frameworks, while the US is still debating federal legislation. The SEC’s approval of YLDS signals a shift toward more structured oversight, setting the stage for further developments in the regulated stablecoin space.
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