In a significant move toward regulatory clarity, the U.S. Securities and Exchange Commission (SEC) has declared that it has no legal jurisdiction over specific types of stablecoin, provided they meet strict criteria. According to a new statement from the SEC’s Division of Corporation Finance, stablecoins that are fully backed one-to-one by high-quality, liquid assets and are redeemable for U.S. dollars at any time — now termed “Covered Stablecoins” — do not qualify as securities under federal law.
This statement, though not legally binding or official policy yet, marks a major development in the SEC’s evolving approach to digital assets. It follows a trend under the Trump-era leadership and the formation of a Crypto Task Force aimed at reducing regulatory pressure on the industry. The agency has previously issued similar statements excluding memecoins and proof-of-work mining from its oversight.
The guidance clarifies that individuals involved in the minting or redemption of these Covered the coins are not required to register such transactions with the SEC under the Securities Act of 1933. The rationale: these tokens are not marketed as investments but rather as tools for commerce — including payment, money transfer, and value storage.
However, not all stablecoins are in the clear. The SEC’s criteria exclude the coins backed by precious metals or other crypto assets — elements found in Tether’s USDT reserves — and those with redemption limitations. This implies that while USD Coin (USDC) may fall within the SEC’s safe zone, Tether likely does not.
Circle President Heath Tarbert welcomed the clarity, stating that the SEC has now clearly differentiated between compliant and non-compliant stablecoins. “This certainty does not extend to other digital assets just because they call themselves ‘stablecoins’,” Tarbert remarked.
Meanwhile, Congress is pushing ahead with legislation to define national standards for stablecoin issuance. Bipartisan bills have advanced in both the House and Senate, reflecting growing consensus around the need for stablecoin-specific regulation.
SEC Commissioner Hester Peirce emphasized that these preliminary actions, though unofficial, are crucial in shaping a more crypto-friendly regulatory environment. She hinted that non-fungible tokens (NFTs) might be next in line for similar treatment.
As the SEC continues to redefine its crypto strategy — possibly soon under new leadership with Trump nominee Paul Atkins — its latest statement underscores a shift from aggressive enforcement to regulatory clarity. The next SEC crypto summit, focused on trading practices, could further illuminate the agency’s evolving stance.
