SEC Says Stablecoins Aren’t Securities—But Avoids Yield-Bearing Types

In Brief:

SEC clarifies that fiat-backed stablecoins redeemable 1:1 for USD are not securities.

Yield-bearing and algorithmic stablecoins were not addressed in the new guidance.

‍

The U.S. Securities and Exchange Commission (SEC) released a new statement Friday clarifying its stance on certain stablecoins. According to the guidance, dollar-pegged tokens backed by low-risk, liquid assets and redeemable one-for-one with USD are not considered securities.

This applies specifically to stablecoins that:

• Maintain parity with the U.S. dollar;
• Are backed by equivalent or greater reserves in USD-denominated, low-risk assets;
• Offer immediate 1:1 redemption for fiat.

The SEC's statement did not provide any position on yield-bearing stablecoins or algorithmic stablecoins, which continue to raise regulatory concerns. These types of tokens, which offer returns or rely on code-based supply adjustments, may still fall under securities or other regulatory scrutiny in the future.

The announcement narrows regulatory ambiguity for top fiat-backed stablecoins, offering some clarity to issuers and investors—but leaves key sectors of the stablecoin market in limbo.

More updates are expected as this is a developing story.

‍