Ondo Finance has made a strategic purchase of $25 million worth of YLDS, a yield-generating stablecoin from Figure Technology Solutions, in order to diversify its reserves backing the tokenized U.S. Treasurys fund. The investment comes at a time when crypto-backed lending is witnessing renewed interest among various financial technology firms and lenders.

The firm reported on Monday that YLDS will be integrated into a reserves portfolio which already contains tokenized Treasury offerings from leading asset management firms such as BlackRock, Fidelity, and Franklin Templeton. The Ondo Short-Term US Government Bond Fund (OUSG) is designed for institutional investors, providing onchain access to Treasurys with 24/7 redemption capabilities and an estimated annual return of 3.68%. The fund currently has around $777 million in total value locked (TVL).

Figure operates lending infrastructure and capital markets on the Provenance blockchain, successfully originating over $19 billion in various loans, including home equity lines and crypto-backed credit. This investment follows Figure’s recent completion of its Nasdaq IPO earlier this year, and as per DefiLlama, YLDS boasts a market capitalization of approximately $100 million.

Crypto-Backed Lending on the Rise

The trend of crypto-backed lending is growing worldwide, accelerating in 2025 as lenders begin to revive and broaden their offering of crypto-collateralized loans. In July, Block Earner introduced Bitcoin-backed home loans in Australia.

Recently, Tether declared an investment in Ledn, a platform issuing Bitcoin-backed consumer loans. In Q3, Ledn revealed it had issued over $390 million in these loans. Additionally, centralized exchanges like Coinbase are expanding their offerings, recently allowing customers to borrow against their Ether (ETH) holdings. Since launching its onchain lending markets earlier this year, Coinbase has recorded approximately $1.28 billion in loan originations.