On April 4, the U.S. Securities and Exchange Commission (SEC) unveiled new regulations that classify specific fiat-backed stablecoins as “non-securities,” which will exempt them from transaction reporting duties.
This updated classification represents a significant shift in the regulatory framework surrounding digital assets, providing essential clarity for stablecoin issuers and other stakeholders in the market.
The SEC’s announcement specifies that stablecoins recognized as “covered stablecoins” must adhere to rigorous standards: they must be entirely backed by physical U.S. dollars or secure, short-term liquid instruments and must maintain a redeemable value of 1:1 with the U.S. dollar.
New SEC Rules Exclude Algorithmic and Synthetic Stablecoins from ‘Non-Security’ Status
The new regulations explicitly rule out algorithmic stablecoins and synthetic dollar tokens, which utilize software mechanisms or trading strategies to maintain their value peg, from receiving the ‘non-security’ designation.
Additionally, the guidelines prevent covered stablecoin issuers from mixing their reserves with operational funds, offering yield or profit-sharing to token holders, or using the reserves for speculative purposes.
These stipulations align with recent legislative proposals, such as the GENIUS Stablecoin Bill introduced by Senator Bill Hagerty and the Stable Act of 2025 from Representative French Hill. Both pieces of legislation aim to reinforce the U.S. dollar’s position as the premier global reserve currency by incentivizing the issuance of fully-backed and transparent stablecoins.
Major stablecoin providers, like Tether—currently the largest in the world—are becoming substantial holders of U.S. Treasury bills; Tether now ranks as the seventh-largest holder of Treasuries globally, surpassing countries such as Germany and Canada.
During the White House Digital Asset Summit on March 7, U.S. Treasury Secretary Scott Bessent emphasized the significance of regulating stablecoins, stating that it is fundamental to the administration’s strategy for safeguarding the dollar’s supremacy in the digital economy.
SEC Commissioner Crenshaw Pushes Back Against New Stablecoin Guidelines
Despite the generally positive reception, the announcement has faced criticism. SEC Commissioner Caroline Crenshaw, known for her skepticism regarding cryptocurrencies, expressed her discontent with the new guidelines.
In a statement on April 4, she accused the SEC of inaccurately portraying the risks associated with USD-backed stablecoins, claiming the report was fraught with “legal and factual errors.”
Crenshaw pointed out that the majority of stablecoins are only accessible to retail consumers through intermediaries, not directly from the issuers, a detail she contended was understated in the SEC’s communications.
The SEC has determined that fully-reserved, liquid, dollar-backed stablecoins are not securities. Therefore blockchain transactions to mint or redeem them do not need to be registered under the Securities Act. Helpful clarity from @SECGov. pic.twitter.com/oUsq0snLaF
— David Sacks (@davidsacks47) April 4, 2025
She noted that over 90% of USD-stablecoins circulate on secondary markets via cryptocurrency exchanges.
Despite her reservations, the broader cryptocurrency industry has largely welcomed the SEC’s new guidance. Ian Balina, founder of Token Metrics, described the update as a positive advancement, characterizing it as “a clear step in focusing on what really matters in the crypto space.”
Moreover, last month, Federal Reserve Chair Jerome Powell reiterated the central bank’s commitment to developing a regulatory framework for stablecoins during a Senate hearing, underscoring the necessity of consumer and saver protection.
The post SEC Says Certain Stablecoins Qualify as ‘Non-Securities’ Under New Guidelines appeared first on Cryptonews.
