YLDS links yield on idle cash to lending markets through a security that works like a stablecoin

A dollar-linked security that can move like a stablecoin is being used for corporate treasury management and access to lending markets. YLDS combines income on idle balances with a funding role in credit markets traditionally geared toward institutions.

In a CoinDesk interview on November 6, Carl Sampson, who leads YLDS at Figure, described the product as combining stablecoin transferability with the investor protections and income features of a security.

Sampson said YLDS uses a face-amount certificate structure and is issued as a debt security under an S-1 registration statement with the SEC. He said the structure falls outside the GENIUS Act and allows payments on idle balances. The yield quoted in the interview was 3.57%, with income accruing daily and paid monthly.

Its main uses currently include business-to-business cross-border treasury management and reserve holdings, Sampson said. He described YLDS as maintaining a one-to-one relationship with the dollar, with no issuance or redemption fees. Transactions are available to users who have completed identity checks and joined an allowlist. On Stellar, institutions can establish omnibus accounts for clients and act as distributors or custodians. Direct access for individuals would depend on how distribution develops, he added.

In lending markets, YLDS funds participation in Democratized Prime, Figure’s funding mechanism for loan originators, Sampson said. Its warehouse structures provide liquidity against collateral including home equity lines of credit, auto financing and small business loans. Originators can use that liquidity to make further loans.

Sampson distinguished the collateral backing YLDS from the collateral held in lending participation pools. He said YLDS is restricted to government debt with maturities of 90 days or less, predominantly U.S. Treasuries. The lending pools separately manage risk through standardized collateral quality requirements and conditions governing how originators pledge assets.

He identified those collateral standards and access to secondary markets as strengths of Figure’s business. Sampson said marketplace volume through Figure Connect and asset-backed securitizations was about $5 billion per quarter, with the securitizations predominantly rated AAA. Figure seeks assets that can be sold as whole loans in secondary markets and can also be securitized, he said.

Stellar’s established network of fintech companies, neobanks and remittance platforms, particularly in Latin America and Europe, helped attract Figure to the network, Sampson said. YLDS launched on Stellar in May of this year. He described that distribution network as a foundation for expanding asset issuance and funding, with Figure providing loan originators access to liquidity.