U.S. SEC: Stablecoins are not securities and do not need to sign up.

The United States SEC (SEC) stated that its defined "Covered Stablecoins" USD stablecoins are not classified as securities, which means they do not need to register with market regulatory agencies. Stablecoin issuers and exchanges have received support from the SEC, which also aids in gaining support for the future stablecoin legislation in Congress.

What are Covered Stablecoins defined by the SEC?

The so-called Covered Stablecoins are designed and marketed to be used as a means of payment, transfer, or storage of value. They are intended to maintain a stable value relative to the US dollar and are backed by US dollars and/or other assets considered low-risk and easily liquid, allowing the issuers of secured stablecoins to redeem on demand. The reserves held by these assets are calculated in US dollars, with a value equal to or greater than the redemption value of the stablecoins in circulation. Issuers of secured stablecoins can mint and redeem the secured stablecoins at any time in an unlimited one-to-one manner with US dollars. In other words, the issuers of secured stablecoins are always prepared to mint one secured stablecoin for 1 US dollar (or the relevant portion) and redeem one secured stablecoin for 1 US dollar (or the relevant portion), with no limit on the number of secured stablecoins minted or redeemed by the issuer. Through this fixed price, unlimited minting exchange structure, the market price of secured stablecoins is likely to remain stable relative to the US dollar.

Covered Stablecoins must not be used as an investment

The SEC pointed out in the document that Covered Stablecoins must clearly indicate when marketing:

Stablecoins have a stable value relative to or corresponding to the US dollar at a value of (1:1 ).

Does not grant holders of secured stablecoins the right to receive any interest, profit, or other returns.

does not reflect any investment or other ownership interest in the stablecoin issuers covered or any other third parties.

Do not grant any governance rights to stablecoin holders over the stablecoin issuer or the stablecoin itself.

Will not bring any financial benefits or losses to holders of regulated stablecoins based on the financial performance of regulated stablecoin issuers or any third party.

Reserves of Covered Stablecoins

The issuers of Covered Stablecoins use the sales proceeds of stablecoins to purchase assets, which are then stored in a centralized account known as a "reserve." The assets held in the reserve include U.S. dollars and/or other assets deemed low-risk and easily liquid, allowing the issuers of the covered stablecoins to fulfill all redemptions on demand. Additionally, the reserve account must be separate from the assets of the covered stablecoin issuer or any third parties.

In addition, the assets held in reserves:

Not to be used for operational or general commercial purposes.

Shall not be loaned, pledged, or re-pledged for any reason.

held in a way that will not be subject to third-party claims

Therefore, stablecoin issuers will not use the assets held in reserves for trading, speculation, or proprietary investment strategies. The income from the stablecoin reserve assets, such as interest (, may be decided by the guarantor stablecoin issuer for use, but such income will not be paid to the guarantor stablecoin holders.

SEC statement helps the stablecoin bill to pass.

The SEC stated in a footnote that the final decision on whether stablecoins must be registered with the U.S. Securities and Exchange Commission still needs to be made based on specific circumstances.

This decision may help the stablecoin legislation and the upcoming digital asset market structure bill to pass in Congress.

The versions of the stablecoin bill from the House of Representatives and the Senate have been submitted to the committee for review. The House Financial Services Committee will hold its first hearing on the market structure bill next week.

This article from the US SEC: Stablecoins are not securities and do not need to be registered first appeared in Chain News ABMedia.