EddieJayonCrypto
5 Apr 25
The U.S. Securities and Exchange Commission issued new guidance stating that certain types of dollar-pegged stablecoins are not considered securities. The guidance covers stablecoins designed to maintain a stable value relative to the U.S. Dollar and backed by low-risk, liquid assets. However, it do...
The U.S. Securities and Exchange Commission (SEC) has issued new guidance for stablecoins. According to the SEC, certain types of dollar-pegged stablecoins are not considered securities if they are designed to maintain a stable value relative to the U.S. Dollar and are backed by low-risk, liquid assets. However, the guidance does not cover yield-bearing and algorithmic stablecoins. Stablecoins are digital assets pegged to fiat currencies and backed by liquid assets. The SEC's guidance follows previous commentary on meme coins and NFTs. Legislation on stablecoins is currently being debated in Congress, with a focus on interest-bearing stablecoins and algorithmic stablecoins. The SEC's statement only encompasses stablecoins that meet specific criteria related to value stability and asset backing. Notable stablecoin issuers such as Tether (USDT) and Circle (USDC) manage significant reserves in the stablecoin sector. Under former SEC Chair Gary Gensler, stablecoins existed in a legal gray area. With stablecoin legislation under review, numerous financial institutions, including Bank of America, are preparing to enter the market. Some experts anticipate the launch of up to 1,000 new stablecoins within a year of federal stablecoin rules being established. The SEC's guidance on stablecoins follows its previous commentary on meme coins and NFTs. Legislation being debated in the House of Representatives and Senate disallows interest-bearing stablecoins. Algorithmic stablecoins, which seek to maintain a stable price using trading incentives, are also under scrutiny. Lawmakers are considering the STABLE Act to create a legal pathway for stablecoin issuers. Meanwhile, there are discussions around potential conflicts of interest in the stablecoin sector. Editor's Note: This story was updated after publication with additional detail.