Sure, it's possible...
If someone writes a plugin for WebAuthn authentication, the YubiKey can be used as a strong second factor. It can even be used as a First (Only) factor.
Yubico I has a lot of info on it's Dev page (dev.yubico.com) about Fido2 and WebAuthn, as well as some libraries that a developer can use to add support.
As for File System Encryption, that's a bit tougher. I have not seen anyone use the Yubikey for file system encryption. They do have a low cost (List price $650) HSM that may fit that bill.
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