SEC Clarifies Rules for USD-Pegged Stablecoins
The U.S. Securities and Exchange Commission (SEC) has issued new guidance on stablecoins. The agency aims to provide clearer regulations for crypto assets.This guidance focuses on “Covered Stablecoins.”
Covered Stablecoins are those that maintain a stable value relative to the U.S. dollar.They are redeemable for USD on a 1:1 basis. These stablecoins have low-risk assets as reserves. The assets backing them must meet or exceed the redemption value of all coins in circulation.
Examples include Tether (USDT) and USDC. The SEC states that the sale or offer of these stablecoins does not constitute an investment contract. The SEC’s Division of Corporation Finance explains that these stablecoins do not fall under the SEC’s jurisdiction. The division’s statement clarifies crucial considerations for issuers.
Key points include:
- Issuers use sale proceeds to fund reserves.
- Buyers do not expect returns on their funds.
- they discourage speculative trading or investment.
According to the SEC, persons involved in minting and redeeming Covered Stablecoins do not need to register with the Commission. This is because they do not involve the offer and sale of securities.
Notably, the statement excludes other types of stablecoins, such as algorithmic and yield-bearing stablecoins. It also excludes those pegged to other assets, not the U.S. dollar.
The SEC’s statement aims to clarify important considerations for issuers. The agency notes that transactions do not need registration under the Securities Act. This is because buyers do not expect returns on their funds.
For more data, visit the SEC website.
