SEC Declares Dollar-Pegged Stablecoins Are Not Securities in 2025 Ruling

In a landmark clarification issued on April 5, 2025, the U.S. Securities and Exchange Commission (SEC) under the Trump administration has stated that non-yield-bearing, dollar-pegged stablecoins do not constitute securities. This development marks a significant shift in regulatory posture, aimed at encouraging innovation while distinguishing between digital assets used for commerce and those used for speculative investment.

Let’s break down what this ruling means for stablecoin issuers, users, and the broader cryptocurrency market.

What the SEC Clarified

According to the new SEC press release, the agency no longer views certain stablecoins as securities. The core reason:

“Covered stablecoins are marketed solely for use in commerce, as a means of making payments, transmitting money, and/or storing value, and not as investments.”

The agency emphasized that dollar-pegged stablecoins used for purchasing goods, transmitting funds, or storing value are not distributed in a way that promotes speculation or profit-seeking behavior.

Key Criteria for Non-Security Status

For a stablecoin to fall outside the SEC’s jurisdiction, it must:

• Be dollar-pegged (i.e., maintain a 1:1 value with the U.S. dollar)

• Not bear yield (i.e., holders don’t earn interest or staking rewards)

• Be marketed solely for commercial or consumer utility (e.g., remittances, payments, e-commerce)

• Avoid promotional language that implies profit or investment return

This new classification effectively exempts tokens such as USDC, USDT, and PayPal’s PYUSD, as long as they don’t introduce yield-bearing mechanics.

What Is Still Under Review?

While this is a green light for basic dollar-pegged stablecoins, the SEC clarified that other forms of stablecoins are still under scrutiny:

• Yield-bearing stablecoins (e.g., DeFi-issued interest-bearing assets)

• Algorithmic stablecoins (e.g., UST-like models not backed 1:1)

• Non-USD pegged stablecoins (e.g., EUR, gold-pegged, or commodity-based)

These types have yet to receive regulatory clarity and may still be considered securities in the future.

The SEC is maintaining a cautious tone, emphasizing that it has "yet to formulate a view" on these alternative stablecoin structures.

From Gensler to Uyeda: A New Era in Crypto Oversight

This announcement reflects a broader shift at the SEC since Mark Uyeda, former SEC Commissioner, stepped in as Acting Chairman under President Trump.

Under former Chairman Gary Gensler, the SEC pursued an aggressive stance, launching lawsuits against:

• Ripple Labs (XRP)

• Coinbase

• Kraken

• Consensys

Gensler’s SEC also delayed approval of Bitcoin ETFs, citing investor risk, until court pressure forced regulatory approval. During his tenure, the agency viewed nearly all crypto assets (except Bitcoin) as securities.

Under Uyeda, the agency appears to be taking a pragmatic, commerce-first approach that seeks to protect consumers without stifling innovation.

Why This Matters for the Crypto Industry

The SEC’s stablecoin clarification opens the door to:

• Regulatory clarity for fintechs and stablecoin issuers

• Greater adoption of stablecoins in e-commerce and cross-border payments

• Reduced legal risks for payment-focused platforms

It also supports ongoing efforts to distinguish between financial utility and speculative assets in the crypto ecosystem.

According to CryptoRadar.in, this is expected to trigger a wave of stablecoin-related integrations across both traditional financial services and decentralized applications (dApps).

What Comes Next?

Key areas to watch include:

1. Congressional response: Will lawmakers codify this distinction into law?

2. State-level adoption: States may align with or diverge from the SEC’s view.

3. International harmonization: Countries like Singapore and the UK are watching U.S. policy closely.

4. Impact on stablecoin-backed lending: Lenders using non-yield stablecoins may now operate with more legal certainty.

Final Takeaway

In short, the SEC no longer considers dollar-pegged, non-yield-bearing stablecoins to be securities, so long as they are used for commerce or consumer purposes.

This signals a more nuanced approach to crypto regulation under the Trump administration and Acting Chair Uyeda, prioritizing real-world use cases over speculative hype.

For crypto builders, fintech innovators, and investors, this could mark the beginning of a more collaborative era between regulators and the blockchain industry.

Author: CryptoRadar Team
Experts in Crypto Regulation, Blockchain Policy, and Financial Innovation.