SEC Classifies Fully Reserved Stablecoins as Cash Equivalents

The U.S. Securities and Exchange Commission (SEC) has issued updated guidance classifying certain stablecoins—specifically those fully reserved and pegged to the U.S. dollar—as cash equivalents. This move signals a regulatory shift toward greater acceptance of digital assets within traditional financial systems and aims to clarify the treatment of these instruments for institutional investors and financial institutions [1]. The guidance emphasizes that such stablecoins must offer guaranteed redemption rights and be backed by sufficient reserves to qualify for this classification, ensuring alignment with established accounting standards [3].

This development is seen as a step toward broader institutional adoption of stablecoins, particularly those like USDC, which have demonstrated price stability and a strong market presence. According to CoinMarketCap, USDC has maintained a stable price of $1.00 with a market capitalization of $64.38 billion and a daily trading volume shift of 50.81%. Over the past 90 days, the asset has shown minimal fluctuations, reinforcing its role as a reliable digital cash substitute [6]. The SEC’s guidance is expected to simplify balance sheet management for firms holding compliant stablecoins and provide greater clarity for financial institutions seeking to integrate them into their operations [4].

The regulatory shift is also closely aligned with the recently enacted GENIUS Act, the first federal law to regulate stablecoin issuance. The legislation mandates that payment stablecoins be issued only by entities approved by federal or compliant state regulators and establishes a framework for transparent and controlled issuance [5]. Together, the SEC’s guidance and the GENIUS Act create a more cohesive regulatory environment, potentially accelerating the adoption of stablecoins in mainstream finance.

Despite the regulatory progress, key stablecoin issuers such as Circle and Tether have not yet made public statements on the new classification. Analysts suggest that the updated framework could encourage further innovation and investment in the stablecoin market while maintaining investor protections and financial stability [1]. The SEC’s approach, under Chair Paul Atkins, marks a departure from previously restrictive policies and reflects a broader strategy to accommodate crypto assets within the existing financial infrastructure.

Source:

[1] Binance – [https://www.binance.com/en/square/post/27885887330017](https://www.binance.com/en/square/post/27885887330017)

[2] Bloomberg – [https://news.bloombergtax.com/daily-tax-report-state/crypto-friendly-sec-offers-stopgap-stablecoin-accounting-clarity](https://news.bloombergtax.com/daily-tax-report-state/crypto-friendly-sec-offers-stopgap-stablecoin-accounting-clarity)

[3] Coinness – [https://coinness.com/en/news/79116](https://coinness.com/en/news/79116)

[4] Bitget – [https://www.bitget.com/news/detail/12560604895448](https://www.bitget.com/news/detail/12560604895448)

[5] FinanceFeeds – [https://financefeeds.com/genius-act-explained-u-s-stablecoin-law-rules-and-compliance-guide/](https://financefeeds.com/genius-act-explained-u-s-stablecoin-law-rules-and-compliance-guide/)

[6] CoinMarketCap – [https://coinmarketcap.com/community/articles/68915fba548c3f18b1d692ae/](https://coinmarketcap.com/community/articles/68915fba548c3f18b1d692ae/)