SEC Updates Guidance on Stablecoins - Scratching the Surface with Soosh

Today's topic: SEC Updates Guidance on Stablecoins!

The U.S. Securities and Exchange Commission (SEC) has shared new guidance about stablecoins, which are digital tokens designed to always equal one U.S. dollar.

Why this matters?

The update matters because businesses and investors need to know how to treat stablecoins in their financial reports. Until now, the rules weren’t very clear. Some wondered if stablecoins should be treated like investments, which come with extra requirements, or like money, which is simpler.

The SEC’s new view is straightforward:

• If a stablecoin is fully backed by actual U.S. dollars (or something just as safe),

And

• if people can always exchange it 1-to-1 for cash,

Then it can be counted as a “cash equivalent” on balance sheets. In practice, this puts these stablecoins in the same category as cash or money market funds.

This guidance helps companies that hold stablecoins by reducing accounting complexity and regulatory uncertainty. It also gives more legitimacy to stablecoins that meet these strict conditions.

In short, the SEC is signaling that some stablecoins are safe enough to be treated like real dollars — as long as they are fully backed and always redeemable.

What is Scratching the Surface with Soosh? Its a new mini project of mine to provide some context to the world of crypto, finance etc in bite sized written format. As the name suggests, everything here is at surface level (i.e. no deep dives or extremely details/heavy datasets), just enough to get your curiosity to tingle~ so you can learn!

More details here: https://www.theblock.co/post/365554/sec-staff-guidance-stablecoins