SEC Approves Yield-Bearing Stablecoin as Crypto Regulations Evolves

SEC approved a yield-bearing stablecoin, introducing a
new era for crypto stablecoins. The asset class is an important aspect of the
crypto market that facilitates billions of daily transactions.

However, they have traditionally lacked yield, forcing
investors to forgo returns in exchange for price stability. That has now
changed after the U.S. Securities and Exchange Commission (SEC) approved the
first yield-bearing stablecoin, Bloomberg reported.

A Stablecoin That Pays Interest

Earlier this week, the SEC approved securities from
Figure Certificate Co., allowing the company to offer a yield-bearing
stablecoin known as YLDs. Unlike traditional stablecoins, which earn issuers
revenue but provide no direct returns to holders, YLDs will generate yield by
investing reserves in securities such as U.S. Treasuries and commercial paper.

The SEC has classified YLDs stablecoins as
“certificates,” making them subject to securities regulations. This sets them apart from other major stablecoins like
Tether’s USDT, which does not offer yield to users despite earning billions in
reserve income.

Introducing the first-ever SEC-regulated, yield-bearing stablecoin: $YLDS✅Risk-free yield at SOFR – 50bps (3.85%)✅No staking or lockups✅Buy/sell 24x7It’s time for real assets with real value. pic.twitter.com/Vt1Ilw5jGv

— Figure Markets (@FigureMarkets) February 20, 2025

Figure Markets expects YLDs to compete with existing
stablecoins in key applications such as payments, cross-border transfers, and
collateralized lending. Its primary rivals include Tether, which remains the
dominant player in the stablecoin market, and BlackRock’s BUIDL, a fund-backed
stablecoin designed for institutional investors.

Interest in yield-bearing stablecoins is heating up. A
Tether co-founder recently announced plans to launch a similar product,
highlighting the growing recognition of investor demand for passive income on
digital assets.

Regulatory Support and Future Outlook

Figure Markets began the approval process in August
2023 by filing a confidential S-1 with the SEC. Under then-Chairman Gary Gensler, the company navigated the regulatory landscape and ultimately secured approval. This regulatory nod may set the stage for more
yield-bearing stablecoins, though experts estimate that additional SEC
approvals could take six to 12 months.

Stablecoins have received increased attention from
U.S. policymakers. The Trump administration’s recent executive order on digital
assets included support for the growth of dollar-backed stablecoins, signaling
further regulatory clarity. Meanwhile, Congress continues to develop stablecoin
legislation, which could create a formalized framework for these assets.

With regulatory approval in hand and competition
intensifying, the emergence of yield-bearing stablecoins could reshape the
crypto market, providing investors with new ways to earn passive income while
maintaining price stability.

This article was written by Jared Kirui at www.financemagnates.com.