- The SEC has declared certain stablecoins are not securities, exempting them from registration requirements under the Securities Act.
- Stablecoins must be marketed solely for use in commerce and backed by high-quality liquid assets to qualify for this exemption.
- Tether‘s USDT may not qualify under these guidelines due to its reserve composition and redemption terms.
The U.S. Securities and Exchange Commission has stated that certain stablecoins and their issuers fall outside its jurisdiction, according to the regulator’s latest statement. This declaration is part of the agency’s ongoing effort to clarify which parts of the crypto sector aren’t subject to its legal authority, following similar statements about memecoins and proof-of-work crypto mining.
In the Friday statement, the SEC’s Division of Corporation Finance specified that qualifying stablecoins “do not involve the offer and sale of securities.” The non-binding guidance confirms that entities involved in minting and redeeming these stablecoins won’t need to register these transactions with the Commission under the Securities Act.
Specific Requirements for Exemption
The SEC defined qualifying stablecoins as tokens “marketed solely for use in commerce, as a means of making payments, transmitting money, and/or storing value, and not as investments.” This potentially covers major stablecoins like Circle’s USDC, but may exclude Tether’s USDT.
A footnote in the statement indicates that acceptable reserves “do not include precious metals or other crypto assets,” both of which are included in Tether’s reserves. Additionally, the SEC requires tokens to be redeemable at any time for dollars, but Tether’s terms of service suggest minimum amounts or delays may be imposed.
Circle President Heath Tarbert posted a social-media comment highlighting this distinction: “The SEC just drew a clear line: Stablecoins backed one-for-one with high quality liquid assets—like USDC—are NOT securities. This certainty does not extend to other digital assets just because they call themselves ‘stablecoins.'”
Legislative Progress and Political Context
Meanwhile, Congress is advancing new standards for stablecoin issuance. The House Financial Services Committee has moved a stablecoin bill toward a full House vote, with a similar bill approved by committee in the Senate. Both have received bipartisan support.
Stablecoins have become politically contentious recently, with Trump-backed World Liberty Financial pitching its own stablecoin, while some congressional Democrats express concerns about Elon Musk potentially creating his own.
The SEC, currently under interim Chairman Mark Uyeda, has been rapidly overhauling its crypto position. This includes dismissing most of its prominent enforcement cases against digital assets businesses, though a few remain. The agency is preparing for its second crypto summit next week, focusing on trading, while awaiting Senate confirmation of Trump’s pick for permanent chairman, Paul Atkins.
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