News 
April 5, 2025 
3 min. 
The U.S. Securities and Exchange Commission (SEC) has released a new statement aimed at clarifying how stablecoins fit into federal securities laws. This move, led by the agency’s Division of Corporation Finance, seeks to offer greater regulatory guidance for crypto market participants.
In the announcement, the SEC introduced the term “Covered Stablecoins” to describe a specific type of stable digital asset. These tokens are pegged 1:1 to the U.S. dollar and are fully redeemable at that same rate.
To qualify, these stablecoins must be backed by highly liquid, low-risk assets. Importantly, the reserves must meet or exceed the total redemption value of all circulating tokens. This structure ensures that the value of each token remains stable and trustworthy.
However, the SEC made it clear that this guidance applies only to Covered Stablecoins. It does not include algorithmic stablecoins, yield-generating tokens, or those pegged to assets other than the U.S. dollar.
Currently, the two dominant USD-pegged stablecoins—Tether (USDT) and USDC—fall under this category, although the statement did not mention them directly.
In its guidance, the SEC stated that the issuance or sale of Covered Stablecoins does not qualify as an “investment contract.” Therefore, such activity does not fall within the scope of the Securities Act of 1933. This means the SEC does not consider these tokens to be securities under current law.
The division also emphasized key factors that contributed to this position. Issuers use sale proceeds solely to support the stablecoin’s reserves. Buyers have no expectation of profit, and the tokens are not designed to promote speculative trading or investment.
As a result, individuals and entities involved in creating or redeeming Covered Stablecoins do not need to register these activities with the SEC. Nor do they need to seek exemption under the Securities Act.
This clarification could provide much-needed relief for stablecoin issuers and users alike. Still, it’s a narrow ruling—one that leaves other types of stablecoins outside its protection.
