SEC’s Shocking Stablecoin Shake-Up: You Won’t Believe What Happens Next! 😲

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Now, picture this: on an April day in 2025, when the world was as topsy-turvy as a house built on quicksand, World Liberty Financial hollered about launching a stablecoin that earns not a single speck of interest. It happened amid a stock market selloff spurred by tariffs—so wild it wiped out a record $6.4 trillion, leaving Wall Street grumbling about a bear market. In the midst of all this hullabaloo, the US SEC, with all the seriousness of a town marshal, declared that these “Covered Stablecoins”—backed as solidly as a good, honest ledger—weren’t one bit the securities kind, and that those busy minting or redeeming ‘em could skip the reporting rigmarole. 🤠

The kindly folks at the SEC even scribbled a list of what counts as proper backing: cold, hard USD cash equivalents, bank demand deposits, Uncle Sam’s Treasury bonds, or money market funds. But by the gods of prudence, you best not mix those asset reserves with your everyday business funds or offer token holders any interest, profit, or yield opportunities. No sirree, these reserves are for backing the coins only—not for chasing after any financial rabbit. 😏

And just so you know, those algorithmic stablecoins—ones that rely on fancy software hocus-pocus to keep up with the dollar—aren’t included in this roundup. They’re left to wander in a kind of regulatory wilderness, much like an ornery mule refusing its harness.

Meanwhile, in this great nation of ours, some highfalutin industry leaders are wrangling for a change in the rules. They’d like their stablecoin issuers to share a slice of that yield pie with their coin holders and even offer a bit of interest. In fact, one such interest-bearing stablecoin was given the SEC’s nod and registered as a security just last month. As one feller, Tim Bailey, put it:


“We believe that there is market demand for government-regulated fiat-backed stablecoins and that this will help unleash the next wave of financial services innovation. Our UDPN Stablecoin Management System is ideal to help regulated stablecoin issuers build and operate these new services.”

And if that ain’t enough to set the mind a-whirlin’, another outfit known as M^0 is busy constructing a programmable stablecoin platform atop Solana—one of the snappiest blockchains around. They promise to let builders craft digital dollars fit for any purpose, without the fuss of endless, cumbersome agreements. As their sharp-minded strategist, Joao Reginatto, explained:


“Solana’s unmatched speed, scalability, and developer ecosystem make it a prime environment for stablecoin innovation. By bringing M^0’s platform to Solana, we’re empowering builders to create stablecoins that are not only interoperable, liquid, and tailored to their use cases, but that can also perform at any scale. This expansion is a key milestone in M^0’s vision to build the most comprehensive digital money technology stack for developers.”

Stablecoins as safe haven investments

When the stock market was dropping faster than a cat in a rainstorm, even the mighty US dollar began to stagger against the trusty Swiss franc—America’s so-called safe haven—after President Trump started whistling about tariffs like they were the next hot tune. Suddenly, the US dollar’s claim as the world’s premier reserve currency started to look as flimsy as a paper hat in a windstorm. And, as if that weren’t enough, gold itself took a holiday instead of shining as the safe harbor it once promised to be. 🤨

Instead, many a savvy soul scurried over to stablecoins, with Tether (USDT) leading the charge, saddled with a mighty $144 billion. Even though the overall crypto corral shrank by 18%, the stablecoin ranch bucked the trend, expanding its market cap by an impressive 56% over the past year—a clear sign that when the going gets tough, folks are fixin’ to keep their wealth in the calm of stablecoins. 🚀

Now here’s a twist sweeter than a summer peach: William Quigley, one of the co-founders behind Wax and Tether, mentioned that in rough times, people might flock to buy Tether as if it were a beacon in a storm, nudging its price slightly above a dollar. He reckons this behavior mirrors the fickle nature of conventional currency trading, where supply and demand pull the strings. And mind you, Tether isn’t tied down by a rigid one-to-one peg—it’s redeemable for a dollar, yet its price may dance about like a cat on a hot tin roof. 😼

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2025-04-14 14:54