Key Takeaways
- The SEC’s Division of Corporation Finance issued its “Statement on Stablecoins” on Friday.
- The statement clarifies that reserve-backed, low-risk stablecoins are not considered securities.
- Tether’s USDT and Circle’s USDC dominate nearly 70% of the $240B stablecoin market.
SEC Sets Clear Rules for Covered Stablecoins
The U.S. Securities and Exchange Commission SEC Division of Corporation Finance issued its official “Statement on Stablecoins” on Friday. The statement establishes that reserved-backed digital assets that maintain a stable value relative to the U.S. dollar, defined as “covered stablecoins,” are not securities. The document differentiates covered stablecoins from algorithmic and yield-bearing counterparts. It excludes stablecoins that track the value of reference assets other than the U.S. dollar.
A disclaimer in the document clarifies that the statement reflects the views of the Division of Corporation Finance only and not the SEC as a whole. This clarification aims to provide greater certainty on the application of federal securities laws to crypto assets.
Stablecoin Market Growth Spurs Legislative Momentum
The stablecoin market has seen major commercial and legal gains. Tether, the world’s largest stablecoin issuer, realized $13 billion in profit in 2024. In addition, both the U.S. House and Senate have introduced stablecoin bills. Bipartisan support makes such legislation likely to be enacted.
The SEC statement now provides clarity by confirming that the offer and sale of covered stablecoins do not involve the sale of securities. It also states that individuals who mint or redeem covered stablecoins do not need to register those transactions under the Securities Act.
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Dominance of USDT and USDC Reinforced by New Standards
Tether’s USDT and Circle’s USDC account for nearly 70% of the stablecoin market, which totals approximately $240 billion. Both assets clearly satisfy the SEC’s criteria for covered stablecoins. This regulatory clarity helps solidify their standing in the global market. Meanwhile, the SEC’s position leaves open questions about non-covered stablecoins. For instance, Ethena’s yield-bearing USDe, which has the third largest market capitalization after USDT and USDC, may face different regulatory scrutiny.
The new statement comes at a critical time as the crypto industry expands. Regulatory clarity helps ensure that stablecoins maintain investor trust. The measure also supports efforts by lawmakers to enact clear legislation around digital assets. The updated framework is expected to reduce uncertainty in the crypto market and strengthen confidence among institutional investors and market participants.
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