The U.S. Securities and Exchange Commission (SEC) has clarified its position on stablecoins, announcing that certain dollar-based variants fall outside of its jurisdiction, meaning they are not classified as securities.

Key Points:

• The SEC’s statement broadens the list of digital assets considered non-securities, addressing stablecoins used purely for transactions instead of investments.
• Notably, the new definition might exclude Tether due to its reserve requirements conflicting with SEC’s expected criteria.

The SEC’s recent communication, a continuation of previous public statements regarding digital assets, details that transactions associated with the creation and redemption of these stablecoins do not require registration under U.S. securities laws. Furthermore, these stablecoins are described as “being marketed solely for use in commerce,” and not as investment products. However, Tether’s inclusion in the statement remains doubtful due to the assets held in reserve that do not meet the SEC’s guidelines.

Heather Tarbert, Circle’s president, highlighted the SEC’s move, stating that stablecoins backed by high-quality liquid assets are not classified as securities, emphasizing that not all tokens branded as stablecoins share this security designation.

This ongoing discussion around stablecoins comes as U.S. legislators pursue clearer regulatory standards for their issuance. Recent bipartisan support has emerged for legislation governing stablecoins and additional digital assets, marking substantial progress in regulatory measures.

Read More: SEC ‘Earnest’ About Finding Workable Crypto Policy

The SEC has plans for further discussion next week about trading in stablecoins and other digital assets, which may transform the regulatory landscape as governance evolves.