Following World Liberty Financial’s announcement of the launch of a non-interest-bearing stablecoin USD1 on April 4, 2025, the US Securities and Exchange Commission issued a notice.
This notice paved the way for a more regulated and stable digital asset landscape and said that “Covered Stablecoins,” or tokens backed by physical fiat or high-liquidity assets and redeemable 1:1 with the US dollar, are “non-securities.”
Persons involved in the process of “minting” (or creating) and redeeming Covered Stablecoins are exempted from reporting requirements.The SEC notice also gave examples of readily liquid assets that should back a Covered Stablecoin.