The American stock exchange supervisory authority, the SEC (Securities and Exchange Commission), has an important one a few days ago Explanation to Stable coins Submitted. The authority says that some stable coins are not considered securities as long as they meet strict rules and conditions.
The second speaks of stable coins that try to keep a fixed value compared to the US dollar. This type of stablecoins can be exchanged for $ 1 at any time and is covered by safe and liquid reserves. These coins are referred to in the explanation of the SEC as “covered stable coins”.
‘Stable coins without interest are no securities’
According to the SEC, offering and selling these stable coins fall under the conditions “not offering and selling securities”. This means that they fall outside the normal rules for securities such as stocks and bonds. An important condition of the SEC is that the editor of the stable coin must not pay users. They say: “Although the profit from these assets, such as interest, can be used by a covered stablecoin issuer at their own discretion, such income is not paid to covered stablecoin holder.”
The CEO of Coinbase, Brian Armstong, does not agree. He said on CNBC that he is “concerned about this idea that consumers do not receive interest on stable coins.” In his opinion, new legislation should enable this.
Is there new crypto legislation?
The timing of this explanation is striking, because in the American congress there are two suggestions for a round of voting. It is the Stable Act and the Genius Act that both rules for Stable coins want to set up. President Trump said he hoped that the congress would come with a final plan before the summer.
Stable coins are becoming increasingly important for the market
Stable coins are becoming more and more important within the crypto sector. The market grew by 11 percent this year and even 47 percent compared to the previous year. The currently largest stable coin is Tethertogether with USDC. They are mainly used for trade, loans in Defi (Decentralized Finance) and as a means of payment. It has a completely different purpose than Bitcoin.
There are also stable coins that pay users interest. These stable coins now have a common market value of over $ 13 billion. According to the SEC, these will probably fall under the securities law.