U.S. Securities and Exchange Commission chair Gary Gensler has reiterated over time that most stablecoins are securities and should, therefore, fall under the purview of the securities watchdog. Now, Gensler is one step closer to achieving his aim of regulating stablecoins.
Fast facts
- The U.S. Treasury Department and other agencies are putting together a report that will specify that the SEC has authority over stablecoins like Tether, according to a Bloomberg report citing anonymous sources. The report, which is expected to be published this week and is being prepared by the President’s Working Group on Financial Markets, will also push Congress to pass legislation to specify that stablecoins should be regulated like bank deposits, the Bloomberg report said. The aim of the report is to ensure that stablecoins do not threaten the economy or pose any systemic risk and to lay down in clear terms how the Biden administration will oversee the sector with multiple regulatory agencies.
- According to the Bloomberg report, Gensler has not only been publicly asking for more oversight over the crypto world, which he has referred to as the “wild west,” but has been pushing for it behind closed doors as well. His efforts are going to bear fruit as language to emphasize the SEC’s powers over stablecoins has been added to the expected report, which would enable the SEC to pursue enforcement actions and policies for cryptocurrencies. The revisions to the report suggest the government is taking an active role in regulating stablecoins.
- Earlier versions of the anticipated report urged Congress to pass legislation that would require creating a new bank charter for stablecoin issuers. This charter would have allowed crypto banks to handle stablecoins as deposits, according to an earlier Bloomberg report. However, Gensler has sought revisions recently to clarify that the SEC already has authority to regulate tokens involved in investment transactions like stablecoins. The report will also reinforce the role of the U.S. Commodity Futures Trading Commission in regulating stablecoins.
