The U.S. Securities and Exchange Commission (SEC) has announced the introduction of a new term, “covered stablecoins.” These digital assets are not considered securities under current legislation. The definition of covered stablecoins encompasses assets that maintain a 1:1 peg to the U.S. dollar, can be redeemed at the same ratio, and are backed by low-risk liquid reserves.
This is reported by Business • Media
The SEC emphasized that such stablecoins are intended for use in payments, remittances, and value storage, rather than for investment purposes, and therefore are not subject to regulation under the Securities Act.
Limitations of the Stablecoin Definition
Furthermore, the new definition does not include algorithmic stablecoins or those that generate income or are linked to assets other than the U.S. dollar. The Commission also noted that individuals wishing to create or redeem covered stablecoins can do so without the need to notify the SEC.
David Sachs, the “King of AI and Cryptocurrency,” emphasized that blockchain transactions related to the issuance and redemption of such stablecoins do not require registration under the Securities Act.
Response to Stablecoin Regulation
The SEC’s position was released against the backdrop of growing interest in stablecoins and active discussions regarding their regulation in the U.S. Congress. The House Financial Services Committee has advanced the “Stablecoin Transparency and Accountability for a Better Ledger Economy” (STABLE) bill, aimed at creating a unified regulatory framework for U.S. dollar-pegged stablecoins.
It is also noteworthy that another legislative initiative regarding stablecoins, “Guiding and Establishing National Innovation for U.S. Stablecoins” (GENIUS), has received approval from the Senate Banking Committee and is awaiting the President’s signature.