SEC Interim Guidance Suggests USDC Stablecoin Could Qualify as Cash Equivalent on Corporate Balance Sheets

Key Points

1. The SEC permits USD-backed stablecoins with a 1:1 peg and full backing to be reported as cash equivalents, enhancing regulatory clarity for corporate reporting.

2. Qualifying stablecoins must maintain a 1:1 peg to the U.S. dollar, be fully backed by cash or Treasury bills, and guarantee redemption rights.

3. The guidance excludes algorithmic or yield-bearing stablecoins from being classified as cash equivalents.

4. The GENIUS Act complements the SEC’s guidance by providing a clearer legal framework for stablecoin issuers like Circle and Tether.

5. The SEC acknowledges ongoing efforts like 'Project Crypto' to refine digital asset classification and address regulatory gaps.