In a welcome move for the crypto industry, the U.S. Securities and Exchange Commission (SEC) has finally offered more clarity on stablecoins—specifically the kind that are backed 1:1 by the U.S. dollar.
The SEC’s Division of Corporation Finance announced that certain USD-pegged stablecoins, now referred to as “Covered Stablecoins,” are not considered securities. That means these digital dollars—like USDT (Tether) and USDC—don’t need to jump through the usual SEC registration hoops.
To qualify, these stablecoins must:
- Maintain a fixed value equal to one U.S. dollar,
- Be fully redeemable for dollars at any time,
- Be backed by highly liquid, low-risk reserves that match or exceed their total circulating value.
In short, they’re designed for stability—not speculation.
The SEC emphasized that holders of these coins don’t expect to earn profits from them, and issuers don’t promise any returns. As a result, the creation and redemption of these stablecoins don’t count as investment contracts under U.S. securities laws.
However, this exemption doesn’t apply to algorithmic, yield-bearing, or non-USD pegged stablecoins—which are still very much on the SEC’s radar.
The agency says this move is part of its ongoing effort to bring transparency and certainty to the digital asset space. For crypto companies and users alike, that’s a much-needed dose of regulatory clarity.
