New SEC Guidelines Could Propel Stablecoin Adoption
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US SEC’s Latest Guidance on Stablecoins
In a significant move that could encourage the widespread use of stablecoins, the US Securities and Exchange Commission (SEC) has unveiled fresh guidance. This development is closely tied to the launch of Project Crypto, a strategic initiative aimed at positioning the United States as a leading hub in the cryptocurrency sector.
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Stablecoins as Cash Equivalents
As reported by Bloomberg, the SEC’s new guidance suggests that specific stablecoins can now be classified as cash equivalents. This classification applies to dollar-backed stablecoins and those supported by other asset classes, provided they offer a guaranteed redemption right. These coins, typically backed by the US dollar or other high-liquidity reserve assets like short-term treasury bills, fall under the provisions of the GENIUS Act.
This guidance offers a streamlined approach for companies holding compliant stablecoins, allowing them to categorize these assets as cash equivalents rather than digital assets. This shift could significantly enhance the adoption of stablecoins among public companies, as the SEC’s stance indicates a recognition of these coins’ similarity to cash.
Importantly, this guidance arrives shortly after the initiation of Project Crypto, which aims to solidify the US’s role as a global leader in the crypto industry by offering clear regulatory frameworks.
Stablecoins Deemed Non-Securities
Previously, the SEC clarified that stablecoins are not considered securities. These non-security stablecoins are designed to maintain a one-to-one value with the US dollar, and they are redeemable on this basis. They are underpinned by low-risk, highly liquid assets held in reserve.
Furthermore, US SEC Chair Paul Atkins has commended stablecoins following the enactment of the GENIUS Act, highlighting their significance in reducing market costs and mitigating risks.
Post-Project Crypto Developments by the SEC
Following the launch of Project Crypto, the SEC has made additional strides, including the introduction of new crypto roundtables organized by the Commission’s Crypto Task Force. These roundtables, set to occur across ten US cities from August 4 to December 5, serve as platforms for engagement with crypto stakeholders who were unable to attend earlier sessions in Washington, D.C.
Moreover, the SEC’s Division of Corporation Finance has recently declared that liquid staking activities and tokens are not classified as securities. This announcement paves the way for the potential inclusion of liquid staking tokens in crypto ETFs, beginning with Solana ETFs.
Overall, the cryptocurrency market continues to evolve, boasting a market capitalization of $3.72 trillion.
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