U.S. SEC Staff Clarifies That Some Crypto Stablecoins Aren't Securities

In its latest what's-not-a-security statement on digital assets, the Securities and Exchange Commission has added dollar-based stablecoins, but may snub Tether.

• The U.S. Securities and Exchange Commission has added to its roster of crypto non-securities with a new statement that argues that most stablecoins belong outside its jurisdiction.
• Its relatively narrow definition of what's covered in the statement may not include Tether's offering, the most popular globally.
• The stablecoin statement joins similar recently announcements on the SEC's memecoin and crypto mining stances.

The U.S. Securities and Exchange Commission (SEC) has recently clarified its stance on the regulatory status of certain stablecoins, highlighting that some dollar-based stablecoins are not considered securities under their jurisdiction, excluding Tether from this classification.

This announcement marks a distinction by the SEC, specifying that most stablecoins fall outside the scope of securities regulation. Despite this position, it's worth noting that Tether's offering, being one of the most widely used stablecoins globally, may not align with this categorization as per the SEC's criteria.

This clarification on stablecoins is part of a series of recent statements by the SEC regarding various aspects of digital assets regulation, including memecoins and crypto mining operations.

The SEC emphasized that transactions involving the creation and redemption of certain stablecoins do not require registration with the Commission under existing securities laws or their exemptions. This move underscores the agency's delineation of which areas within the crypto industry it does not oversee legally.

In parallel to these developments, congressional efforts are underway to establish new regulatory standards for issuing tokens like stablecoins. The House Financial Services Committee has propelled a stablecoin bill towards consideration by the full House of Representatives, while a similar bill has gained committee approval in the Senate with bipartisan support.

Stablecoins have emerged as a subject of interest among policymakers; for instance, World Liberty Financial's stablecoin proposal backed by former President Trump and concerns raised by some Democrats about potential involvement in this space by tech magnate Elon Musk have fueled discussions.