The U.S. Securities and Exchange Commission (SEC) has approved an application from Figure Markets, allowing the launch of YLDS, a stablecoin offering users interest on their holdings.

This approval marks a significant regulatory shift, as YLDS becomes the first stablecoin officially classified as a security.

According to SEC filings published on February 18, Figure Markets, an exchange operator, received approval to issue YLDS, a U.S. dollar-pegged stablecoin with a 3.85% yield. Unlike leading stablecoins such as Tether and USD Coin, which operate without formal regulatory oversight, YLDS will be fully registered with the SEC, aligning it with traditional financial instruments like stocks and bonds.

Figure Markets CEO Mike Cagney highlighted the transformative nature of this approval, questioning the necessity of traditional banks if users can self-custody assets, earn interest, and transact independently. "If I can hold this, if I can self-custody this, if it pays me interest, and I can actually use it to transact, what do I need a bank for?" Cagney told Fortune.‍

Stablecoin Regulations in the U.S. and EU

Stablecoins, digital assets pegged to traditional currencies, have garnered significant attention from regulators worldwide due to their potential impact on financial stability and monetary sovereignty.

In the European Union, the Markets in Crypto-Assets Regulation (MiCAR) was adopted in May 2023 and became fully applicable in December 2024. MiCAR provides a comprehensive framework for crypto assets, including stablecoins, aiming to ensure consumer protection and market integrity. It mandates that stablecoin issuers maintain adequate reserves and comply with stringent operational requirements.

Stablecoin Regulation in the United States: The STABLE Act

In the United States, legislative efforts have intensified to establish clear regulatory frameworks for stablecoin issuers. Notably, the (STABLE) Act was introduced in the House of Representatives on February 6, 2025, by Reps. French Hill and Bryan Steil. This bill aims to create a comprehensive framework for the issuance and operation of payment stablecoins within the U.S. financial system.

The STABLE Act proposes several key measures:

• Licensing Options: Issuers can choose between federal or state licensing, providing flexibility in regulatory oversight.
• Reserve Requirements: Issuers must maintain reserves equal to or greater than the value of the stablecoins in circulation, ensuring adequate backing of the digital assets.
• Regular Attestations: Monthly attestations by independent auditors are mandated to confirm the sufficiency of reserves, enhancing transparency and trust.
• Permissible Activities: The Act delineates specific business activities that authorized stablecoin issuers may conduct, aiming to prevent excessive risk-taking.
• Federal Oversight Mechanism: The federal government is empowered to intervene if a state-qualified issuer is deemed inadequately supervised, ensuring consistent regulatory standards.
• Clarification of Securities Status: The Act explicitly states that payment stablecoins are not to be classified as securities, thereby excluding them from Securities and Exchange Commission (SEC) regulation.

These provisions reflect a concerted effort to integrate stablecoins into the traditional financial system while safeguarding consumer interests and maintaining financial stability. As the legislative process progresses, stakeholders anticipate further refinements to address emerging challenges in the rapidly evolving digital asset landscape.