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- Zameer Attar
Zameer Attar
- Reviewed by:
Anjali BelgaumkarWriter by choice, CryptoCurrency Writer, and Researcher by chance. Currently, focusing on financial news and analysis, as well as cryptocurrency news and data. One may not call me a crypto “Enthusiast” but trust me I'm getting there.
- Aug 05, 2025 06:29 UTC
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Crypto Meets Wall Street: SEC Declares Some Stablecoins as ‘Digital Cash’
US SEC has issued interim guidelines classifying stablecoins as digital cash.
Only stablecoins meeting certain requirement are qualified.
It will further shape in "Project Crypto".
The U.S. Securities and Exchange Commission (SEC) has issued updated guidelines classifying stablecoins. It has allowed certain USD-pegged stablecoins as cash equivalents. The development comes at a time when the SEC is formulating rules for crypto to modernize traditional finance in the nation.
SEC Issues Interim Guidance on Stablecoins
According to Bloomberg News, the SEC has issued stopgap accounting guidance, allowing certain fully backed, redeemable USD stablecoins to be classified as cash equivalents, offering interim clarity while broader rules are developed.
Only stablecoins with a consistent 1:1 peg, full collateralization with high liquidity assets, and on-demand redemption rights qualify as cash equivalents. This move is a part of a broader strategy for increasing institutional acceptance of compliant stablecoins as legitimate digital cash substitutes within the traditional financial system.
The Commission Ensures Transparency in Digital Asset Space
The classification ensures that qualifying stablecoins carry a risk profile that enhances transparency and reduces uncertainty for institutional investors. This move is a collaborative effort with the GENIUS Act to modernize crypto regulation and integrate digital assets into the mainstream financial system.
Under the leadership of Chairman Paul Atkins, the SEC is gradually changing some of its stringent rules to accommodate crypto assets within the existing financial infrastructure.
Now, with the new initiative, it allows corporates and individual businesses to report stablecoins more transparently on their balance sheets. It also strives to foster greater confidence and participation in the crypto market.
The Classification Continues in Project Crypto
This initiative is interim, which will be refined further in “Project Crypto.” SEC will shape the regulatory landscape of stablecoins by addressing barriers in the crypto space, such as redemption risk and transparency gaps.
Project Crypto also seeks to ensure the prevention of illicit use of stablecoins, signaling a continued evolution in stablecoin regulation.
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FAQs
The SEC aims to boost institutional crypto adoption by providing regulatory clarity, ensuring transparency, and integrating compliant stablecoins into traditional finance.
No, it’s an interim measure under “Project Crypto,” which will refine rules further to address risks like redemption delays and illicit usage.
Project Crypto is the SEC’s initiative to shape stablecoin regulations, focusing on transparency, redemption safeguards, and preventing misuse in digital asset markets.
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