ComplianceX | Jack Kelly | Oct 26, 2021
The Securities and Exchange Commission has won a debate among US agencies to propose legislation and oversee the $131 billion stablecoin market, Bloomberg reported on Monday.
The Wall Street watchdog’s “significant authority” over tokens like tether will be spelt out in a report expected to be published this week, Bloomberg said, citing sources familiar with the matter.
Agencies including the Treasury will ask Congress to pass legislation stating coins should be regulated like bank deposits, one source said.
More regulation coming: SEC Chairman signals stablecoins and other tokens could fall under its rules on security-based swaps
The report is expected to highlight the SEC’s powers, as Chairman Gary Gensler has been pushing for oversight and the ability to pursue enforcement action.
It will clarify how the Biden administration will regulate the sector, with several agencies including the Commodity and Futures Trading Commission likely to have a role. These developments suggest the government will have clear and active authority over the stablecoin market, while waiting for longer-term plans to be enacted.
Prior versions of the report called on Congress to create a bank-like charter that would treat stablecoin issuers as if they are banks.
Gensler, who has compared stablecoins to poker chips at a casino, has been calling on lawmakers for a while to give the SEC more authority to regulate the industry.
There might be an upside to the SEC winning this battle. According to Jaret Seiberg, a DC-based financial services policy analyst at Cowen, the range of stablecoin issuers could widen under the SEC’s watch, despite its tough stance on these digital assets.
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