{"id":20741,"date":"2025-04-05T17:01:40","date_gmt":"2025-04-05T17:01:40","guid":{"rendered":"https:\/\/dogewisperer.com\/?p=20741"},"modified":"2025-04-05T17:01:40","modified_gmt":"2025-04-05T17:01:40","slug":"us-sec-takes-a-stand-covered-stablecoins-are-not-securities","status":"publish","type":"post","link":"https:\/\/dogewisperer.com\/?p=20741","title":{"rendered":"US SEC Takes A Stand: \u2018Covered\u2019 Stablecoins Are Not Securities"},"content":{"rendered":"
\n

The United States Securities and Exchange Commission <\/a>has clarified its stance on dollar-backed stable cryptocurrencies, stating that \u201ccovered\u201d stablecoins are not securities. This move represents another step toward a clear crypto regulatory landscape in the US.<\/p>\n

Covered Stablecoins Not Securities \u2014 What About Algorithmic Stablecoins?<\/strong><\/h2>\n

On Friday, April 4, the SEC took a formal position on dollar-backed stablecoins. The agency declared in an official statement<\/a> that covered stablecoins, such as Tether\u2019s USDT and Circle\u2019s USDC, are not securities that fall under their regulatory purview.<\/p>\n

According to the US regulator, covered stablecoins refer to crypto tokens designed and marketed as a means of payment, transmitting money, or storing value. These stablecoins maintain a value relative to the US dollar and are backed by the US dollar and\/or other assets that are considered low-risk and readily liquid to allow a Covered Stablecoin issuer to honor redemptions on demand.<\/p>\n

The commission said on Friday:<\/p>\n

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It is the Division\u2019s view that the offer and sale of Covered Stablecoins, in the manner and under the circumstances described in this statement, do not involve the offer and sale of securities within the meaning of Section 2(a)(1) of the Securities Act of 1933 (the \u201cSecurities Act\u201d) or Section 3(a)(10) of the Securities Exchange Act of 1934 (the \u201cExchange Act\u201d).<\/p>\n<\/blockquote>\n

As such, firms involved in the process of \u201cminting\u201d (or creating) and redeeming these covered stablecoins are not required to register their transactions with the commission. It is worth noting that the regulator seemed to exclude algorithmic stablecoins, which use programs to increase or decrease the supply of stablecoins in response to demand, from this clarifying statement.<\/p>\n

This lack of regulatory certainty<\/a> on algorithmic stablecoins is a little surprising considering the catastrophic collapse of Terra\u2019s stablecoin (UST) in 2022. The fall of the Terra Luna ecosystem saw the loss of almost $45 billion from the market in a single week.<\/p>\n

US SEC Stance Aligns With Proposed Senate Legislation<\/b><\/h2>\n

The SEC\u2019s clarifying statement about covered stablecoins appears to be consistent with regulations slated in the GENIUS stablecoin bill and the Stable Act of 2025 being proposed in the US Senate.\u00a0<\/p>\n

On February 4, US Senator Bill Hagerty introduced a bill<\/a> to create a regulatory framework for stablecoins that would allow tokens, such as USDT and USDC, to fall under Federal Reserve rules.<\/p>\n

This legislative bill aims to protect the US dollar\u2019s status as the global reserve currency, as the largest stablecoin issuers back their tokens with US dollar deposits held in regulated financial institutions and short-term US Treasury Bills.\u00a0<\/p>\n

As of this writing, Tether\u2019s USDT ranks as the largest stablecoin and the third-largest cryptocurrency, with a market capitalization of over $144 billion.<\/p>\n

\"SEC\"<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

The United States Securities and Exchange Commission has clarified its stance on dollar-backed stable cryptocurrencies, stating that \u201ccovered\u201d stablecoins are not securities. This move represents another step toward a clear crypto regulatory landscape in the US. Covered Stablecoins Not Securities \u2014 What About Algorithmic Stablecoins? On Friday, April 4, the SEC took a formal position […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"iawp_total_views":0,"footnotes":""},"categories":[2],"tags":[3,4,5],"class_list":["post-20741","post","type-post","status-publish","format-standard","hentry","category-news","tag-crypto","tag-doge","tag-news"],"_links":{"self":[{"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/posts\/20741","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=20741"}],"version-history":[{"count":0,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=\/wp\/v2\/posts\/20741\/revisions"}],"wp:attachment":[{"href":"https:\/\/dogewisperer.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=20741"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=20741"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dogewisperer.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=20741"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}