In a notable shift for crypto regulation, the U.S. Securities and Exchange Commission (SEC) has signaled that certain dollar-backed stablecoins do not qualify as securities, narrowing the scope of assets under its oversight. However, the decision appears to sideline Tether’s USDT, the most widely used stablecoin globally.
The new statement, issued by the SEC’s Division of Corporation Finance, clarified that stablecoins used purely for payments, value storage, or money transfers - rather than investment - fall outside the commission’s regulatory authority. Transactions involved in minting or redeeming these stablecoins also won’t require registration, according to the SEC staff.
But the criteria exclude tokens backed by precious metals or other cryptocurrencies - two components of Tether’s reserve makeup. Moreover, the SEC’s position requires stablecoins to be instantly redeemable for U.S. dollars at any time. Tether’s redemption terms, which include minimum thresholds and potential delays, may conflict with that requirement.
This latest announcement follows a series of “non-enforcement” positions by the SEC under its Trump-era leadership, which has worked to ease regulatory pressure on digital assets. Previous statements declared that memecoins and proof-of-work mining activities also fall outside the SEC’s jurisdiction.
While not formal policy or enforceable rulemaking, these staff-level declarations are shaping the regulatory landscape for crypto projects. SEC Commissioner Hester Peirce, who leads the agency’s Crypto Task Force, has emphasized the need for quick clarity, even if it's preliminary.
Circle, issuer of the USDC stablecoin, welcomed the statement. Though not named directly, the SEC’s position appears to favor fully-reserved tokens backed by high-quality liquid assets - criteria USDC has long promoted.
Meanwhile, U.S. lawmakers are advancing legislation to formally regulate stablecoins. This week, the House Financial Services Committee moved a bipartisan bill closer to a floor vote, while the Senate prepares to consider similar legislation.
The regulatory debate comes amid growing political interest in stablecoins. The Trump-aligned World Liberty Financial has proposed launching its own token, and concerns have been raised about Elon Musk potentially entering the space.
The SEC is expected to continue refining its stance at an upcoming crypto summit focused on trading. Leadership changes may accelerate the shift in approach, as interim Chair Mark Uyeda has already begun reversing high-profile crypto enforcement actions. The Senate is also considering confirming Paul Atkins, Trump’s nominee for a permanent chair, which could further reshape the SEC’s direction on digital assets.