The Securities and Exchange Commission (SEC) in the U.S. has published new guidance aimed at clarifying its stance on certain types of stablecoins and has created a new regulatory term: “Covered Stablecoins”.
According to the announcement from the SEC’s Division of Corporation Finance, Covered Stablecoins are defined as the following digital assets:
- Maintaining a one-to-one peg to the US Dollar,
- Can be used one-to-one against the US Dollar and
- Supported by low-risk, highly liquid reserve assets that have a dollar value equal to or greater than the total value of stablecoins in circulation.
The guidance explains that such stablecoins are not considered investment contracts and therefore do not fall under the SEC’s jurisdiction as securities.
SEC has long provided the clarity sought by issuers and market participants operating in the dollar-pegged stablecoin sector, stating that “Covered Stablecoins do not involve the offering and sale of securities.”
However, the Commission’s statement does not apply to algorithmic stablecoins, yield-generating stablecoins, or any digital asset pegged to values other than USD. In particular, the SEC has not provided a determination of whether these other categories are securities, leaving their regulatory statuses uncertain.
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