SEC Staff Issues Guidance Exempting Covered Stablecoins From Registration Requirements

On April 4, 2025, the Securities and Exchange Commission's (SEC's) Division of Corporation Finance (Division) issued a staff statement that certain USD-pegged stablecoins do not qualify as securities under federal law. The announcement, a continuation of the SEC's recent clarifications regarding the regulatory treatment of crypto assets, defines a narrow category of "Covered Stablecoins" exempt from registration requirements.

Covered Stablecoins

The Division's statement defines "Covered Stablecoins" as crypto assets pegged one-to-one with the U.S. dollar, fully backed by a reserve of USD or low-risk, liquid assets (e.g., Treasury securities or cash equivalents), and redeemable on demand on a one-for-one basis. Crucially, these stablecoins must not offer yield, interest, or ownership or governance rights and must be marketed solely for payments, money transmission, or value storage—not investment. The Division concludes that such assets, under these conditions,