Discover how YLDS became the first SEC-registered yield-bearing stablecoin, offering 3.85% APY backed by U.S. Treasuries with full regulatory compliance.
Aria Chen
Lead Quantitative Analyst
YLDS represents a fundamental shift in stablecoin design. As the first SEC-registered yield-bearing stablecoin, it redistributes Treasury yields directly to holders while providing institutional-grade regulatory compliance.
Traditional stablecoins like USDT and USDC generate billions in revenue from their Treasury reserves, yet holders receive nothing. Tether alone reported $6.2 billion in profit during the first three quarters of 2024, keeping every dollar of yield for itself.
YLDS changes this equation. By registering as a public security under the Investment Company Act of 1940, YLDS legally distributes Treasury-based returns to token holders. The current APY sits at approximately 3.85%, calculated as SOFR minus 0.50%.
This represents more than incremental improvement. It marks a structural shift in how stablecoins can operate within U.S. regulatory frameworks.
YLDS operates as a tokenized money market fund issued by Figure Certificate Company. The mechanics are straightforward but significant.
All YLDS tokens are backed by short-term U.S. Treasury securities and overnight Treasury repurchase agreements. These are the same assets held by prime money market funds.
Interest accrues daily and pays out monthly, either in USD or additional YLDS tokens. This auto-compounding feature means your balance gradually increases over time, making the redemption value slightly above $1.
YLDS operates across four blockchains:
This multi-chain strategy reduces dependency on any single network while maximizing DeFi integration opportunities.
Unlike competitors facing regulatory uncertainty, Figure chose to register YLDS as a security from day one. This "compliance-first" approach creates several advantages.
YLDS is registered under Section 5 of the Securities Act of 1933 as a public security. This provides legal clarity that unregulated stablecoins cannot match.
The SEC registration means monthly attestations, regulated custody, and full governmental oversight. For institutional investors, this removes the legal ambiguity that prevents many from holding crypto assets.
The tradeoff is clear: users must complete KYC verification to earn yield. However, YLDS can still be transferred peer-to-peer to non-KYC users, though they will not receive interest.
The differences between YLDS and existing stablecoins highlight fundamentally different business models.
| Feature | YLDS | USDT | USDC |
|---|---|---|---|
| Yield to Holders | 3.85% APY | 0% | 0% |
| Regulatory Status | SEC-registered | Unregulated | State-regulated |
| Backing | U.S. Treasuries | Mixed reserves | Fiat reserves |
| KYC Required | Yes (for yield) | No | No |
| Market Cap | $5M | $142B | $48B |
USDT and USDC keep all investment returns for themselves. YLDS redistributes that value to holders, representing a wealth transfer from issuer profits to users.
YLDS fits into the broader RWA tokenization trend driving institutional crypto adoption. By wrapping Treasury yields in blockchain-native tokens, it bridges traditional finance and DeFi.
Figure Markets has originated over $20 billion in loans on blockchain, establishing credibility in real-world asset tokenization. The company holds a 70% market share in RWA private credit.
In December 2025, Figure launched the Real-World Asset Consortium on Solana with leading crypto partners. This initiative aims to democratize access to institutional yields from over $1 billion in monthly loan originations.
Several DeFi protocols have integrated YLDS since its November 2025 Solana deployment:
These integrations enable complex DeFi strategies while maintaining underlying regulatory compliance.
YLDS carries distinct risks that differ from traditional stablecoins.
Regulatory dependency remains the primary concern. YLDS depends on continued SEC compliance and Investment Company Act registration. Any regulatory changes could impact operations.
Counterparty risk exists with Figure Certificate Company as the issuer. While SEC oversight provides protections, the assets are not fully ring-fenced from issuer bankruptcy.
Interest rate exposure affects yields directly. As SOFR moves, so does the APY. Current rates around 4.20% have declined from 5.3% in 2023, and further decreases would reduce returns.
Limited liquidity reflects early-stage adoption. With only $5 million in market cap compared to USDC's $48 billion, trading depth remains thin.
For more context on stablecoin mechanics, understanding reserve compositions helps evaluate these risks.
The opportunity YLDS addresses is substantial. Traditional stablecoin issuers generate approximately $7-10 billion annually from Treasury yields that holders never see.
YLDS captures a portion of this value. Even at modest adoption levels, the precedent matters. If yield-bearing stablecoins gain traction, competitive pressure could force traditional issuers to share returns or lose market share.
The stablecoin market expansion to over $300 billion creates significant addressable market for yield-bearing alternatives.
Several catalysts could accelerate YLDS adoption throughout 2026.
Regulatory clarity from the Clarity Act and ongoing SEC enforcement actions will shape the competitive landscape. Compliance-first stablecoins may benefit from stricter oversight of unregistered competitors.
Institutional demand for regulated on-chain yield continues growing. As more traditional finance firms seek blockchain exposure, SEC-registered products become the only viable option for regulated entities.
DeFi protocol integrations will determine whether YLDS achieves meaningful liquidity. Early partnerships with Exponent, Kamino, and others provide a foundation, but broader adoption requires deeper ecosystem penetration.
At Coira, we rate YLDS with a STRICT Score of 81/100. Here's the breakdown:
The risk score sits at 2/10, reflecting minimal volatility expectations for a properly functioning stablecoin.
Our STRICT Score methodology places YLDS in the ACCUMULATE category based on its regulatory structure and yield mechanics. This is educational analysis only and not investment advice. Always conduct your own research before making any decisions.
YLDS represents a meaningful evolution in stablecoin design. By choosing SEC registration over regulatory ambiguity, Figure created the only institutional-grade yield-bearing stablecoin in the United States.
The 3.85% APY from Treasury-backed returns transforms idle stablecoin holdings into productive capital. For regulated entities unable to hold unregistered crypto assets, YLDS provides a compliant path to on-chain yield.
While the $5 million market cap reflects early-stage adoption, first-mover advantage in the regulated stablecoin category positions YLDS well as compliance requirements tighten. The combination of SEC oversight, Treasury backing, and multi-chain deployment creates a unique product in the $300 billion stablecoin market.
For detailed analysis of YLDS and other cryptocurrencies, explore our full crypto research library.
Disclaimer: This article is for educational and informational purposes only. Coira is an educational platform and is not a registered investment advisor. Our STRICT Scores are analytical frameworks for research purposes only and do not constitute investment advice. Cryptocurrency investments carry significant risk. Always conduct your own research and consult with a qualified financial advisor before making investment decisions.
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