At Meridian, tokenized assets on Stellar go to work

Day three of Stellar’s Meridian in Lisbon centered on getting tokenized assets to do work. Denelle Dixon, CEO of the Stellar Development Foundation (SDF), said about $5 billion of real-world assets sit on Stellar today and most already earn yield. She wants them to become usable as collateral and in repo and lending, and then to be used at scale. Executives from Figure and M1X Global, which works with the Republic of the Marshall Islands, described products built for this next step.

Yield-bearing assets are the base

Dixon sorts the assets on Stellar into three groups. Useful assets already generate yield. Usable assets can serve as collateral or in repo, lending, and borrowing, which takes infrastructure and, in some cases, new permissions. Used assets do that work every day. “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,” she said. The approach reflects how SDF has worked since Dixon joined in 2019: the foundation stayed focused on payments and asset issuance while much of the industry chased meme coins, and Dixon told her team to keep their focus on the field and ignore the stands.

Figure’s YLDS is one example. Karl Samsen, who leads the YLDS business at Figure, said the product is a face amount certificate, a type of debt security registered with the SEC. It moves like a stablecoin, with no broker-dealer approving a transfer between holders on Figure’s allow list, and it pays yield that is credited daily and paid monthly. YLDS has been live on Stellar since May. A fintech or neobank can onboard in about 90 seconds and swap USDC for YLDS at no fee, and Samsen said Figure expects to add a permissionless version, wYLDS, on Stellar later.

Etherfuse applies the same idea to local currencies. CEO Dave Taylor said the company issues yield-bearing tokens it calls stablebonds, backed by local government debt held with a regulated custodian in each country. In Mexico, that means Cetes, the government’s short-term treasury bills, held at BBVA. About $50 million a month moves through the platform, he said.

Collateral and repo make assets usable

The Marshall Islands spreads across an ocean area the size of Mexico and relies on a few correspondent banks abroad. Its dollar-denominated sovereign bond, USDM1, is issued directly on Stellar and backed one-to-one by a U.S. Treasury held by a trustee under New York law, said Jordan Goldman, president of M1X Global, which partners with the government on the bond. Ambassador Charles Paul said the government used to fly cash to islands with 20 residents and send it by boat. Now it distributes aid in USDM1, and residents use it to buy groceries and power.

For institutions, Goldman compared USDM1 to a Brady bond and said it works under standard repurchase agreements. In a repo funded by a credit facility from Ascend Markets, USDM1 rolled 72 times at hourly intervals from October 16 to 19, including overnight and over a weekend, with a 2% haircut and pricing at SOFR plus 10 basis points. A traditional repo takes 24 to 48 hours to settle, Goldman said. Traditional firms have little appetite for trading around the clock, he said, but they want the option to move collateral on a weekend or when it is stuck in a 48-hour cycle. He said STS Digital accepts USDM1 as collateral for derivatives. Institutions want legal certainty, enforceability, and eligible collateral, he said, and a sovereign bond secured by a Treasury offers all three.

Banks move from pilots to production

Kurt Fields, an EY partner who focuses on blockchain and digital assets, said bank clients have shifted over the past few months from experimentation to scale. The work now is bringing risk, compliance, legal, and product teams along so projects stop feeling like sandbox pilots, and deciding how much legacy infrastructure to replace as banks move into a hybrid world. “The technology works,” he said.

Banks often arrive asking to tokenize without knowing what matters, Dixon said, so she points them to compliance, uptime, and how easy the integration is. She described Stellar as another rail for banks, with clawback and freeze controls and 99.99% uptime over the last 10 years.

Asked what a bank product leader should do in the next 90 days, Dixon and Samsen started with the bank’s own problems. Dixon said blockchain can speed treasury movement and earn yield on weekends, but “you need to identify the problems first.” Samsen said the conversation usually involves the CFO, the COO or CEO, and the chief product officer. Licensing depends on how a bank holds YLDS: a bank that executes transactions for clients and charges for it needs a broker-dealer, he said, while a bank that lets clients hold YLDS directly does not.

What 2027 holds

Several guests looked ahead to 2027. Taylor wants Etherfuse in the top 20 to 40 countries, up from nine, ranked by whether a country has investable debt, remittance volume, a high cost of credit, and low financial access, so that payments can move from the peso to the lira without passing through the dollar. Ed Nwokedi of RedSwan, which tokenizes commercial real estate, named work with the Nairobi Securities Exchange on tokenization and a profit-sharing structure for its general partner continuation funds, which large property owners want as a route to liquidity.

Dixon expects the DTC tokenization service, run by DTCC, to be connected to Stellar in the first half of 2027, and said SDF has spent months on the integration.