SEC Approves First Yield-Bearing Stablecoin, Expanding Crypto Investment Options

• The SEC approved Figure Certificate Co.’s YLDs, the first yield-bearing stablecoin, classifying it as a regulated security.
• YLDs generate returns by investing reserves in U.S. Treasuries and commercial paper, unlike major stablecoins such as USDT.
• Regulatory approval may lead to more yield-bearing stablecoins, with future SEC approvals expected to take six to 12 months.

The U.S. Securities and Exchange Commission (SEC) endorsed the first yield-bearing stablecoin, marking a change in the stablecoin market. Stablecoins are crucial in digital finance, processing billions of dollars in daily transactions. Until now, they have provided stability but lacked direct returns for holders. The approval presents a regulated option that offers yield while maintaining price stability.

SEC Grants Approval for Yield-Bearing Stablecoin

The SEC granted approval to Figure Certificate Co. to offer a new type of stablecoin, YLDs. Unlike traditional stablecoins that generate revenue for issuers but provide no direct yield to users, YLDs will offer returns. The yield comes from reserves invested in assets such as U.S. Treasuries and commercial paper.

The SEC classified YLDs as certificates, making them subject to securities ordinances. This categorization differs from major stablecoins such as USDT, which does not offer yield despite earning revenue from reserves. The approval establishes a regulatory framework for stablecoins that generate passive income.

The approval places Figure Markets in direct competition with existing stablecoins used for payments, lending, and cross-border transfers. Tether remains the dominant player, while BlackRock’s BUIDL stablecoin serves institutional investors. Figure Markets expects YLDs to compete across various financial applications.

A Tether co-founder recently announced plans to launch a similar product, reflecting increased interest in stablecoins that provide returns. The approval signals potential growth in this asset class, with more financial products expected to enter the market.

Regulatory Landscape and Future Developments

Figure Markets submitted its confidential S-1 filing to the SEC in August 2023. The company worked under SEC regulations to gain approval. Industry experts estimate that additional yield-bearing stablecoin approvals may take six to 12 months.

Stablecoins remain a focus for U.S. policymakers. A recent executive order from the Trump administration expressed support for stablecoin development. Congress continues working on legislation to establish a structured regulatory framework.

With regulatory approval secured, yield-bearing stablecoins may change how investors engage with digital assets. The development provides new options for earning passive income while preserving the stability of stablecoins.