A look at the new SEC-registered, yield-bearing stablecoin

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There’s a new stablecoin on the block. 

Figure Markets is calling its new offering the first SEC-registered public security USD stablecoin native to a blockchain.

Called YLDS, it pays an interest rate of secured overnight financing rate (SOFR) minus 0.50%. Users can transfer the securities peer-to-peer via the Provenance blockchain using Figure Markets’ self-custody wallets.

It was roughly a year ago that I caught up with Figure CEO Mike Cagney at Blockworks’ Digital Asset Summit in London. He told me then — following a $60 million raise — that his company was working toward having a registered security alternative to stablecoins that would pay a yield. There was this filing from October 2023.

So here we are. 

The launch comes about a month after stablecoin issuer Circle acquired Hashnote, a company that created the largest tokenized money market fund.

Circle CEO Jeremy Allaire noted the demand for market participants using yield-bearing collateral, while also being able to easily convert it to tokenized cash (referring to USDC).

Stablecoins have been called crypto’s killer app and a payments space disruptor.

Andrew O’Neill, digital assets managing director at S&P Global Ratings, noted in a recent report that stablecoins could lead to more TradFi-DeFi overlap — like in the case of cross-border payments, the tokenization of real-world assets (RWA) or digital bonds issuance.

Stablecoins’ market capitalization stands at nearly $222 billion; there are roughly 149 million stablecoin holders, according to rwa.xyz data. Onchain RWAs amount to about $17.5 billion.   

“The lack of a consensus about the tools that should be used to bring money natively onchain is among the main factors that hinder the development of digital bonds and RWA tokenization.”

We’re keeping an eye out for stablecoin legislation in the US, as S&P Global analysts expect regulation to bolster the category’s adoption. 

To that point, they forecast a number of users to “transition progressively” from unregulated to regulated stablecoins. So perhaps Figure is on to something.

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