The SEC announced new guidelines for stablecoins on April 4, classifying them as 'covered stablecoins' that are non-securities and exempt from certain reporting requirements. 'Covered stablecoins' must be fully backed by fiat reserves or low-risk liquid instruments and redeemable at a 1:1 ratio with US dollars, explicitly excluding algorithmic stablecoins. The criteria prevent issuers from co-mingling reserves with operational capital or providing yield opportunities to tokenholders, further limiting the use of reserves for investment or speculation. These guidelines align with the recently proposed GENIUS stablecoin bill and the Stable Act of 2025, aimed at preserving the US dollar's status as a global reserve currency. The SEC emphasizes that regulatory clarity for stablecoins is pivotal in shaping the US digital asset strategy, as stated by Treasury Secretary Scott Bessent during a summit in March.

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