Stellar network tokenized assets generate yield
The third day of Stellar’s Meridian conference in Lisbon looked into the practical applications of tokenized assets. Denelle Dixon, CEO of the Stellar Development Foundation, highlighted that approximately $5 billion in real-world assets are currently on the Stellar network, with most already generating yield. Her goal is to enable these assets to be utilized as collateral and in repurchase agreements, ultimately leading to their widespread adoption. Executives from Figure and M1X Global, which collaborates with the Republic of the Marshall Islands, showcased products designed to facilitate this next phase of development.
Yield-bearing assets lay the groundwork
Dixon categorizes assets on Stellar into three distinct groups. The first group consists of assets that already produce yield. The second group comprises assets that can be used as collateral or in repurchase agreements, lending, and borrowing, which requires infrastructure and, in some cases, additional permissions. The third group includes assets that are actively being used on a daily basis.
As Dixon noted, “If we can’t do everything that you can do in traditional finance and then some, there’s not a lot of point to it.” This approach reflects the foundation’s focus on payments and asset issuance since Dixon joined in 2019, while the rest of the industry was distracted by meme coins. Dixon advised her team to maintain their focus on the core aspects of the technology and ignore the surrounding hype.
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Figure’s YLDS product is a prime example of this approach. According to Karl Samsen, who leads the YLDS business at Figure, the product is a type of debt security registered with the SEC, which functions similarly to a stablecoin. YLDS allows for seamless transfers between holders on Figure’s approved list, without the need for broker-dealer approval, and provides daily yield that is paid out monthly. YLDS has been available on Stellar since May, and a fintech or neobank can integrate it in approximately 90 seconds, swapping USDC for YLDS at no cost. Samsen also announced plans to introduce a permissionless version, wYLDS, on Stellar in the future.
Etherfuse applies a similar concept to local currencies. CEO Dave Taylor explained that the company issues yield-bearing tokens, known as stablebonds, which are backed by local government debt held by a regulated custodian in each country. For instance, in Mexico, Etherfuse uses Cetes, the government’s short-term treasury bills, held at BBVA.
The Marshall Islands, which spans an ocean area comparable to Mexico, relies on a limited number of correspondent banks abroad.
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Banks transition from pilot projects to full-scale implementation
Dixon pointed out that banks often approach tokenization without a clear understanding of the key considerations, so she advises them to focus on compliance, uptime, and integration ease. She described Stellar as an additional channel for banks, offering features like clawback and freeze controls, as well as 99.99% uptime over the past decade.
Practical steps for financial institutions
When asked about the next 90 days, Dixon and Samsen recommended that bank product leaders start by identifying their institution’s specific pain points. Dixon suggested that blockchain technology can accelerate treasury movements and generate yield on weekends, but “you need to identify the problems first.” Samsen added that these conversations typically involve the CFO, COO or CEO, and the chief product officer. The need for licensing depends on how a bank holds YLDS, with banks that execute transactions for clients requiring a broker-dealer, while those that allow clients to hold YLDS directly do not.
Expansion and infrastructure plans
Several attendees looked ahead to 2027, with Taylor aiming to expand Etherfuse to the top 20-40 countries, ranked by factors such as investable debt, remittance volume, and financial access. Ed Nwokedi of RedSwan mentioned plans to work with the Nairobi Securities Exchange on tokenization and introduce a profit-sharing structure for general partner continuation funds. Dixon expects the DTC tokenization service, operated by DTCC, to be connected to Stellar in the first half of 2027, following months of integration work by the SDF.
