SEC Approves First Interest-Bearing Stablecoin YLDS, Opening a New Era of Stablecoin Yields

The U.S. Securities and Exchange Commission (SEC) recently approved the first interest-bearing stablecoin YLDS launched by Figure Markets. This move not only marks the recognition of regulatory authorities for crypto financial innovation but also indicates that stablecoins are transitioning from mere payment tools to compliant yield-bearing assets. This could bring more opportunities to the stablecoin sector, making it another innovative field attracting large-scale institutional funds after Bitcoin.

Reasons for SEC Approval of YLDS

In 2024, a stablecoin issuer's annual profit will reach $13.7 billion, exceeding the profit of traditional financial giants. These profits are mainly derived from investment income on reserve assets, but are not related to the holders. Interest-bearing stablecoins saw this opportunity and proposed the concept of "redistribution of asset income rights".

The core of interest-bearing stablecoins lies in maintaining stability while tokenizing the rights to the underlying asset's yield, allowing holders to directly enjoy the benefits. This "holding coins means earning interest" model lowers the threshold and realizes "democratization of earnings." Although this reduces the profits of the issuing institutions, it significantly increases the attractiveness of interest-bearing stablecoins.

The reason why YLDS has obtained SEC approval is mainly because it complies with existing securities regulations. Since the United States has not yet established a systematic regulatory framework for stablecoins, YLDS, as a yield-generating interest-bearing stablecoin, has a structure similar to traditional fixed-income products, clearly falls under the category of "securities," and there is no regulatory controversy.

However, this does not mean that the regulatory dilemmas of other traditional stablecoins will be resolved immediately. The industry anticipates that the U.S. stablecoin regulatory bill may gradually be implemented in the next 1 to 1.5 years. In the next 1-2 years, more compliant interest-bearing stablecoin products may emerge, which will also encourage other countries and regions to consider relevant regulatory issues.

The Impact of Interest-Bearing Stablecoins

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

Interest-bearing stablecoins can not only generate stable income, but also improve capital turnover through intermediary-free and round-the-clock on-chain transactions. Some research institutions have pointed out that hedge funds and asset managers have begun to incorporate stablecoins into their cash management strategies. The approval of YLDS will further increase the participation of institutional investors.

Some analysts predict that interest-bearing stablecoins will usher in explosive growth in the next 3-5 years, accounting for about 10-15% of the stablecoin market, becoming another crypto asset class that has attracted the attention of large-scale institutions after Bitcoin.

The rise of interest-bearing stablecoins will further solidify the dominance of the US dollar in the crypto world. While the physical world is accelerating its 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 institutions, both are strengthening the influence of US dollar assets in the crypto market.

Conclusion

The approval of YLDS is not only a compliance breakthrough for crypto innovation, but also a milestone in the democratization of finance. It reveals the market's ongoing demand for "money begets money". With the improvement of the regulatory framework and the influx of institutional funds, interest-bearing stablecoins are likely to reshape the stablecoin market and enhance the dollarization trend of crypto financial innovation. However, this process needs to balance innovation and risk to avoid repeating the mistakes of the past. Only in this way can interest-bearing stablecoins truly achieve the goal of universal income.