The SEC granted approval to Figure Markets for their yield-bearing stablecoin which represents a fundamental change in how regulators handle digital assets. The SEC approves Figure Markets’ stablecoin application to adjust its rules with the quick growing stablecoin marketplace.
The newly approved YLDS stablecoin links directly to the U.S. dollar value and pays 3.85% in annual rewards to its holders. YLDS differs from other stablecoins because it operates as a security and holds a formal registration with the SEC.
During his interview with Fortune CEO of Figure Markets Mike Cagney declared that YLDS submitted its application to the SEC more than 1 year ago. Cagney told Fortune:
“If I can hold this [stablecoin], 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?”
Figure Markets Gains SEC Nod for Yield Stablecoin
Figure Markets stands as the first U.S. business to gain SEC sanction for distributing yield-bearing stablecoin services. Several other organizations follow this strategy currently. Reports show that Tether co-founder Reeve Collins will debut his Pi Protocol stablecoin network in the second half of 2019.
The new system will assist users in creating stablecoins while earning special tokens from it to add more options into the yield token sector. With stablecoin regulations being developed by lawmakers in the United States right now stands YLDS as an authorized asset.
Experts from the financial sector believe accurate laws protect investors while connecting digital tokens to established banking systems. The financial market research firm S&P Global reported that American authorities still face important regulatory difficulties overseeing reserves, token disclosure, and individual country oversight.
Unlike these other regions the European Union Hong Kong and Singapore have already started implementing stablecoin control systems while the U.S. maintains behind. The European MiCA regulation offers a clear ruleset that European Union member states must follow when creating and using stablecoins setting a guideline other countries can adopt.
Stablecoin Market Evolution and Regulatory Challenges
Republican lawmakers French Hill and Bryan Steil introduced the STABLE Act draft on Feb. 5, to establish essential rules that stablecoin companies in America must follow. Under the proposed law stablecoins require full asset backup and stablecoin issuer actions are strictly regulated with a careful approach.
Timothy Massad as the former CFTC Chair shares concerns about the present draft. During a Feb. 11, Washington Subcommittee meeting Mr. Massad evaluated the bill’s advantages but did not see its efficiency as a major benefit.
Massad supports STABLE Act components for token reserves and issuer controls but points out its weaknesses in different areas. According to Mr. Massad the bill contains a weaker set of regulations than what was agreed upon during past committee negotiations between the previous chair and ranking member.
YLDS Approval by Figure Markets could lead more financial institutions to request yield-bearing stablecoin permits which may help resolve market uncertainty. Although businesses and banks watch the YLDS market results they plan to adjust their existing stablecoin strategies for the future.
The approval impacts how US authorities should handle digital assets that make money. The stablecoin market keeps changing and the lawmakers must keep updating their stability rules. The U.S. government faces an open question about whether its regulatory system can keep up with international standards for stablecoins but regulatory departments step forward to define the new industry path extensively.
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