The SEC has issued a statement clarifying that most Stablecoins are not securities, reinforcing their role in a sound digital economy.
🔹 What is Stablecoins?
Stablecoins are crypto asset designed to maintain a stable value relative to a referenced asset. Examples of USD-backed Stablecoins include USDC and UDST.
💵 Covered Stablecoins: Commerce-Driven Crypto
- Backed 1:1 with USD to support transactions and store value.
- Used primarily in commerce - for payments, money transfers, and financial stability.
🌐 Issuers: Decentralized Creation
Unlike USD, which is issued by the Federal Reserve Board, Covered Stablecoins are minted by independent issuers, democratizing access to digital assets.
🏦 SEC's Key Stance:
- ✅ Covered Stablecoins are NOT securities under the Securities Act of 1933 or Exchange Act of 1934.
- ✅ Issuers do not need to register transactions with the SEC or qualify for exemptions.
📝 The Reserve (holding the pool of assets): Safeguarding Stability
- ➡️ Must always back outstanding Covered Stablecoins one-for-one.
- ➡️ Reserved assets are only for redemptions and segregated from issuer funds
- ➡️ Cannot be used for operational or as collateral
- ➡️ Must be held away from third-party claims
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