SEC Sets New Guidelines for Stablecoin Regulation, Excluding Algorithmic Tokens

The U.S. Securities and Exchange Commission (SEC) released detailed guidelines for stablecoins on April 4th, shaping the future of this critical financial instrument. The agency defined new criteria for ‘covered stablecoins,’ classifying them as non-securities and exempting their transactions from reporting requirements. Under the SEC’s definition, a ‘covered stablecoin’ is fully backed by physical reserves or short-term, low-risk assets, with a 1:1 redemption ratio to U.S. dollars.