Coinbase CEO’s Hilarious Take on SEC’s Stablecoin Guidance – Wait, What?

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Ah, the SEC, ever the whimsical shepherd of America’s financial landscape, has finally graced us with clarity on stablecoins—those curious creatures of the digital world that promise to “stay stable” (like a tightrope walker on a windy day). In a rare moment of regulatory elegance, the U.S. Securities and Exchange Commission (SEC) has delivered their official view on stablecoins, presumably after a long night of contemplating the very nature of “stability.” 🧐

On a particularly fine Friday, the SEC’s Division of Corporation Finance (yes, a division, because we need a division for *everything*) issued a statement that could only be described as ‘clarifying,’ if one enjoys that sort of thing. According to the SEC, stablecoins are those that ‘maintain a stable value relative to USD’—sure, stable, like my grandma’s antique vase on the top shelf. If the stablecoin can be redeemed one-for-one for the almighty dollar, and is backed by assets considered low-risk (as opposed to high-risk, obviously), then we’re dealing with what they affectionately refer to as “Covered Stablecoins.” Now, don’t ask why “covered” is part of the name—it just is.

But wait! Hold your horses, because here comes the twist: the SEC declares that the sale of such covered stablecoins, in the precise manner they have graciously outlined, does *not* count as the sale of securities. Ah, the great escape! 🏃‍♂️💨

And now, the Coinbase CEO reacts!

Enter Brian Armstrong, the CEO of Coinbase and self-proclaimed sage of all things crypto, who, unsurprisingly, had a few words to say on the matter. Over on X (formerly Twitter, but let’s not linger on that), Armstrong tweeted a message that will surely echo in the annals of crypto history: “Very helpful clarification.” That’s it. A mic drop moment from the man who once looked at Bitcoin and thought, “Yes, that’s something I can build a business on.” 😎

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But the story doesn’t end there, dear reader. It turns out the SEC’s rather *detailed* definition of a covered stablecoin forbids the issuer from doing something truly outrageous: paying interest to users. Yes, you heard it right—interest. The SEC claims that doing so would lead us into the treacherous land of securities laws. Well, isn’t that just a party pooper?

Armstrong, ever the crypto crusader, expressed concern over this rather draconian prohibition. After all, who doesn’t dream of earning a little something extra while lounging on their digital stablecoins? (Well, probably the SEC, but who can blame them?) This week, in a most dramatic fashion, Armstrong tweeted that U.S. stablecoin legislation should allow users to earn interest. He even suggested that the interest derived from the reserves backing these coins should flow directly to the holders. Can you imagine? A world where your stablecoin just works for you—how quaint! But alas, in Armstrong’s own words: “The technology exists, but the law has not caught up.” 💼

So, there you have it. The SEC offers us its cryptic, all-knowing perspective, and Coinbase’s CEO keeps marching to the beat of his own digital drum. Who knows what will come of this, but I’m sure of one thing: stablecoins are never quite as stable as they claim to be. 😜

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2025-04-05 18:05