The U.S. Securities and Exchange Commission (SEC) has made a major decision regarding stablecoins like USDT (Tether) and USDC (Circle), stating that “covered” U.S. dollar stablecoins are not considered securities.
This is because the SEC does not require such individuals and businesses that deal with minting or redeeming these stablecoins to report the transactions to the commission. The decision of the SEC has been made at the time when the use of stablecoins is gradually increasing.
These are cryptocurrencies that are fixed to the dollar and are backed by real assets, and they are gradually becoming popular. While stablecoins are being adopted more and more, the U.S. legislators are also developing bills for their regulation.Â
This week, the House Financial Services Committee passed the STABLE Act, a bill that seeks to provide a legal structure for dollar-backed stablecoins and their reserves and capital.
This is a positive development that can help in the regulation of stablecoins, as the SEC’s position is quite clear. The SEC stated that covered stablecoins are pegged to a stable asset, backed by assets, and are redeemable, just like Tether’s USDT and Circle’s USDC.
These stablecoins supply over $200 billion and are an essential part of the crypto system, and the supply can go to trillions if more institutions like Bank of America join the market.
For now, the SEC has stated that the formation or issuance of such a stablecoin or its redemption does not necessitate registration, and this makes it easier for those in that industry.
Also Read: Crypto Execs Urge Congress to Allow Interest on Stablecoins
