The SEC has added onto its initial cryptocurrency accounting rules by publishing fresh staff guidance that certain stablecoins are to be treated as cash, Bloomberg Tax reports.
According to Bloomberg Tax, this stop-gap guidance comes as the SEC is trying to create regulations for crypto securities. With Chair Paul Atkins at the helm, the SEC has started to loosen strict policies. These include accounting guidance that was construed as an obstacle for traditional lenders attempting to break in to the crypto sector.
Under the latest interim guidance, holders of certain U.S. dollar stablecoins—which have their value pegged to another asset class—could classify their assets as a cash equivalent if they have a guaranteed redemption right,
The Block reports that the new guidance indicates stablecoins pegged to the U.S. dollar could get a cash equivalent classification, based on having guaranteed redemption mechanisms and value stability that is tied to another asset class.
As the SEC creates more general crypto rules, The Block says that the new guidance is part of Atkins's initiative to eliminate restrictive regulation in the sector. An instance of this would be the SEC on April 4 released a statement clarifying that "covered" USD stablecoins are not going to be deemed as securities. The regulator also said that entities handling stablecoin issuance and redemption do not have to register these activities with the SEC.
In line with these efforts, on Jul. 31, Atkins announced the formation of Project Crypto, which he says will "swiftly develop proposals to implement the [President’s Working Group on Digital Asset Markets'] recommendations. Project Crypto will help ensure that the U.S. remains the best place in the world to start a business, develop cutting-edge technologies, and participate in capital markets."