SEC approves first yield-bearing stablecoin as public security

The Securities and Exchange Commission (SEC) in the U.S. has approved the first yield-bearing stablecoin as a registered public security.

A press release on 20 February shows that the stablecoin was launched by decentralized finance leader Figure Markets. The stablecoin known as YLDS is offered through Figure Markets’s wholly owned subsidiary, Figure Certificate Company.

How it works

YLDS is a fixed price, daily accrual public security native to the Provenance Blockchain. It can be transferred peer-to-peer and is backed by the same securities that prime money market funds hold.

Holders can earn interest and like any other crypto asset it can be traded 24×7. They can also maintain full control of their YLDS using the Figure Markets’s self-custody wallets without relying on a third party.

Speaking on the launch, Figure Markets CEO, Mike Cagney said:

“We see tremendous applications for YLDS. Exchange collateral, cross-border remittances, and payment rails are some of the immediate opportunities. But we see this as a catalyst to a much larger migration of TradFi to blockchain.”

Also commenting, Interim Executive Director of the Provenance Blockchain Foundation June Ou said the blockchain is excited to support the stablecoin to explore all the possibilities on Provenance.

“We’re excited to support YLDS on Provenance Blockchain. We expect, and will support, significant third-party developer interest to use YLDS and its fiat rails in DeFi, payments, and other applications built on Provenance Blockchain. We will also be integral in wrapping YLDS for applications on other L1 blockchains.”

Both individuals and institutions can purchase the stablecoin through the Figure Markets website. Holders earn Interest that is accrued daily and paid monthly in USD or YLDS.

YLDS pays an interest rate of SOFR minus 0.50%, and holders can buy/sell using USD and other stablecoins and can off-ramp to fiat during US banking hours.