The U.S. Securities and Exchange Commission (SEC) has introduced new rules that could significantly affect the stablecoin market. For the first time, some of these may not be classified as securities.
What Are Covered Stablecoin Assets?
According to the SEC, covered stablecoins are not intended for investment. They must be stable, fast, and reliable ways to transfer or store money. These tokens should not promise profits, voting rights, or ownership.
To qualify as a covered stablecoin, the token must be fully backed 1:1 by the U.S. dollar, supported by low-risk, accessible assets, and always be redeemable at full value. This distinguishes covered stablecoins from investment products that seek to generate profit.
Tether's Response to the New Guidelines
Tether, the company behind the USDT stablecoin, is already considering adjustments to comply with the SEC’s new rules. Currently, USDT is backed by various assets including cash, U.S. Treasuries, Bitcoin, and gold.
However, the SEC’s new rules require stablecoins to be backed solely by cash or safe assets, which may mean that USDT does not qualify as a covered stablecoin. Tether is contemplating launching a new stablecoin backed only by cash and U.S. Treasuries to meet all SEC requirements.
The Growing Role of Stablecoins in the Crypto Market
Despite some uncertainty, the stablecoin market is expanding rapidly. In the first quarter of 2025, the market added over $30 billion, indicating strong demand for stablecoins, even amidst challenges in the crypto market.
The SEC’s clarification of rules surrounding stablecoins may help these digital currencies gain more trust and widespread usage. It could also lead to an increase in companies creating stablecoins that adhere to U.S. regulations.
The SEC’s new guidelines represent a significant step in the regulation of stablecoins, which could alter the dynamics in this sector. However, opinions on how these changes will be received by all market participants remain divided.
