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SEC stablecoin guidance excludes interest-bearing tokens
In a recent announcement, the Securities and Exchange Commission (SEC) has issued new guidance on stablecoins, specifying that interest-bearing tokens are not exempt from securities laws. The agency’s decision underscores its commitment to maintaining transparency and protecting investors.
According to the SEC’s framework, only US dollar-backed stablecoins that meet strict criteria will be recognized as non-securities. These tokens must be fully collateralized by physical fiat currency or short-term US Treasury Bills, ensuring a 1:1 redemption ratio for holders. Issuers are strictly prohibited from engaging in any financial activity involving user funds.
The SEC’s guidance is significant, as it mirrors the proposals put forth in Congress, specifically the GENIUS Act and Stable Act of 2025. These bills aim to clarify the regulatory landscape surrounding US dollar-backed stablecoins, emphasizing the importance of full backing and no profit-sharing.
Moreover, the agency has ruled that on-chain interest or yield-bearing fiat tokens are not permitted under current guidelines. Instead, covered stablecoins can only function as digital equivalents of fiat currency.
The SEC’s announcement is significant, as it sets a clear precedent for regulatory bodies worldwide. By excluding interest-bearing tokens from securities laws, the agency underscores its commitment to investor protection and transparency.
Source: https://coinchapter.com/sec-stablecoin-guidance-excludes-interest-bearing-tokens/?utm_source=rss&utm_medium=rss&utm_campaign=sec-stablecoin-guidance-excludes-interest-bearing-tokens
