Big Win for Crypto: SEC Says Dollar-Backed Stablecoins Are Not Securities
The U.S. SEC just made a game-changing move. Stablecoins backed by actual dollars and easily converted to cash are officially not securities. What does that mean for the crypto industry in the USA? Let’s break it down.
SEC Drops a Bombshell — Covered Stablecoins Get the Green Light
In a huge regulatory development, the U.S. Securities and Exchange Commission (SEC) announced on April 4 that "covered" stablecoins — those fully backed by U.S. dollars and easily convertible to fiat — are not considered securities under U.S. law.
That means top-dollar-backed tokens like USDT (Tether) and USDC (Circle) are finally getting some legal breathing room.
What Are Covered Stablecoins, Anyway?
The SEC defines covered stablecoins as digital tokens that are:
- Pegged 1:1 to the U.S. dollar
- Backed by cash or cash-equivalent low-risk assets (like U.S. Treasuries)
- Used for payments, storing value, or transmitting funds
- Redeemable on demand by the issuer
In short: they function like digital dollars. And the SEC now says if you're minting or redeeming these types of stablecoins, you don’t need to register with them — because these tokens aren’t securities in their eyes.
What About Algorithmic Stablecoins?
There’s a catch.
While dollar-backed stablecoins got the green light, the SEC pointedly did not extend this clarity to algorithmic stablecoins — those backed by code and economic mechanisms rather than dollars. Think: the now-infamous TerraUSD (UST) that collapsed in 2022 and wiped nearly $45 billion from the market.
That silence speaks volumes. It looks like algorithmic stablecoins are still in regulatory limbo, and may face stricter scrutiny moving forward.
Why This Matters — And Why Now
This isn’t just a one-off announcement. It aligns perfectly with several bills currently circulating in the U.S. Senate, including the GENIUS Stablecoin Bill and the Stable Act of 2025. Both aim to create a clear legal framework around stablecoins and preserve the U.S. dollar’s role as the global reserve currency.
Under these bills, big-name stablecoin issuers like Tether and Circle would fall under Federal Reserve oversight, ensuring their dollar reserves are held in regulated banks and short-term Treasuries.
With USDT now sitting as the world’s third-largest crypto and dominating the stablecoin market with over $144 billion in market cap, the timing of this SEC clarification is anything but random.
Crypto News: It’s a Bullish Signal for U.S. Crypto
The SEC’s new stance on dollar-backed stablecoins is a major win for the U.S. crypto sector. It signals a shift toward clearer regulations, something the industry has been begging for.
With legal clarity comes more innovation, institutional involvement, and consumer trust. And with the U.S. potentially creating a stablecoin-friendly framework, the country could finally catch up in the global digital asset race.
Rudy Fares
Equity Trader, Financial Consultant, Musician and Blockchain Aficionado. I spend my time doing Technical and Fundamental Analyses for Stocks, Currencies, Commodities and Cryptocurrencies.
SEC Drops a Bombshell — Covered Stablecoins Get the Green Light
In a huge regulatory development, the U.S. Securities and Exchange Commission (SEC) announced on April 4 that "covered" stablecoins — those fully backed by U.S. dollars and easily convertible to fiat — are not considered securities under U.S. law.
That means top-dollar-backed tokens like USDT (Tether) and USDC (Circle) are finally getting some legal breathing room.
What Are Covered Stablecoins, Anyway?
The SEC defines covered stablecoins as digital tokens that are:
- Pegged 1:1 to the U.S. dollar
- Backed by cash or cash-equivalent low-risk assets (like U.S. Treasuries)
- Used for payments, storing value, or transmitting funds
- Redeemable on demand by the issuer
In short: they function like digital dollars. And the SEC now says if you're minting or redeeming these types of stablecoins, you don’t need to register with them — because these tokens aren’t securities in their eyes.
What About Algorithmic Stablecoins?
There’s a catch.
While dollar-backed stablecoins got the green light, the SEC pointedly did not extend this clarity to algorithmic stablecoins — those backed by code and economic mechanisms rather than dollars. Think: the now-infamous TerraUSD (UST) that collapsed in 2022 and wiped nearly $45 billion from the market.
That silence speaks volumes. It looks like algorithmic stablecoins are still in regulatory limbo, and may face stricter scrutiny moving forward.
Why This Matters — And Why Now
This isn’t just a one-off announcement. It aligns perfectly with several bills currently circulating in the U.S. Senate, including the GENIUS Stablecoin Bill and the Stable Act of 2025. Both aim to create a clear legal framework around stablecoins and preserve the U.S. dollar’s role as the global reserve currency.
Under these bills, big-name stablecoin issuers like Tether and Circle would fall under Federal Reserve oversight, ensuring their dollar reserves are held in regulated banks and short-term Treasuries.
With USDT now sitting as the world’s third-largest crypto and dominating the stablecoin market with over $144 billion in market cap, the timing of this SEC clarification is anything but random.
Crypto News: It’s a Bullish Signal for U.S. Crypto
The SEC’s new stance on dollar-backed stablecoins is a major win for the U.S. crypto sector. It signals a shift toward clearer regulations, something the industry has been begging for.
With legal clarity comes more innovation, institutional involvement, and consumer trust. And with the U.S. potentially creating a stablecoin-friendly framework, the country could finally catch up in the global digital asset race.
Rudy Fares
Equity Trader, Financial Consultant, Musician and Blockchain Aficionado. I spend my time doing Technical and Fundamental Analyses for Stocks, Currencies, Commodities and Cryptocurrencies.
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