• Some stablecoins like USDC ($1.00) won’t be treated as securities, the SEC says.
• Tether may fall outside the SEC’s exemption due to its reserves and redemption policy.

The U.S. Securities and Exchange Commission (SEC) has taken another step in narrowing its oversight of the crypto industry, this time sparing some dollar-backed stablecoins from securities regulation.

In the latest statement from the SEC’s Division of Corporation Finance, the agency said that transactions involving certain stablecoins do not fall under the definition of securities and, therefore, do not require registration.

The statement joins a series of recent moves aimed at redefining the SEC’s role in the digital asset space, which has also included declarations around memecoins and crypto mining. According to the SEC’s staff, stablecoins that are used strictly for payments or storing value and are fully backed by high-quality liquid assets fall outside the agency’s jurisdiction.

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SEC Softens Crypto Stance, But Tether Faces Uncertainty

This line appears to favor Circle’s USDC, which is backed entirely by cash and short-term U.S. Treasury securities. However, the statement’s fine print suggests that Tether’s USDT ($1.00), which includes reserves such as precious metals and other crypto assets, may not qualify.

Further, Tether’s terms of service indicate that redemptions may be subject to minimum amounts and delays, a condition that could disqualify it under the SEC’s criteria.

While the SEC defines its limits, lawmakers in both the House and Senate are moving forward with their own proposals to regulate stablecoins. This week, the House Financial Services Committee advanced a bipartisan bill to the full chamber, and the Senate is preparing to consider a similar proposal.

The stablecoin clarification is part of a broader effort at the SEC to dial back its crypto enforcement legacy. Since the agency came under interim Chairman Mark Uyeda, most high-profile enforcement cases against crypto businesses have been dismissed.

Though the stablecoin announcement is not legally binding, the SEC Commissioner Hester Peirce said she believes such early guidance is crucial in reshaping the agency’s crypto policies. She also hinted that NFTs may be next in line for similar treatment.

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