Why the SEC Rejected the First U.S. Bank-Issued Stablecoin

Acting SEC Chair Uyeda is asking for a big change in how the agency deals with cryptocurrency. He spoke at a Crypto Task Force meeting on March 21 in Washington D.C., saying the SEC should make clear rules instead of just punishing people to help the industry understand whats allowed. This comes as a U.S. bank starts a new stablecoin on Ethereum, a blockchain anyone can use, which is a big step for digital money.

At the same time, Bitcoin‘s price isn’t moving much, making people wonder if its usual four-year pattern still matters. Plus, a new survey says 76% of U.S. investors want to buy more crypto ETFs. And the Senate just voted strongly to stop an IRS rule that would hurt DeFi developers. Now, that decision waits for President Trump to sign it.

Uyeda made his point loud and clear at the meeting, where regulators, lawyers, and crypto folks gathered. He wants the SEC to use a process where they ask for opinions and explain their thinking, not just jump to enforcement. “This approach of using notice-and-comment rulemaking or explaining the Commission‘s thought process through releases – rather than through enforcement actions – should have been considered for classifying crypto assets under the federal securities laws,” he said. He’s tired of the confusing rules that have messed up crypto for a long time.

He talked about the Howey test, a 1946 court decision that decides what counts as an investment. Courts dont agree on how to use it for crypto, which makes things tricky. Uyeda remembered when he worked in California and said a certificate of deposit with a bonus was an investment, but the court said no. Now, he sees courts split again—some say you need pooled money and shared profits, while others look at risks or when the work happens.

“Differences in opinions among various courts are not unusual,” Uyeda said. “After all, a judicial opinion is limited to the particular facts and circumstances of that case.” He pointed out that when courts cant agree, the SEC has helped before—like with whisky receipts and condo sales. He thinks crypto needs that help too.

Uyeda‘s timing matches some big news. The stablecoin on Ethereum shows more people are using crypto. The Senate’s vote supports DeFi, but Bitcoin‘s flat price has experts scratching their heads. With all this happening, Uyeda’s idea to focus on rules instead of enforcement could change how the SEC handles crypto.

Investors seem excited about crypto ETFs, according to the survey, even with all the confusion. They trust these products. Uyeda‘s push for clear rules has everyone watching. Will the SEC switch to making rules, or keep enforcing them? With Trump’s signature still needed for the DeFi bill, things could shift big time soon.