Newly-appointed SEC Chief hints some stablecoins could fall under the legal definition of securities.
Gensler Says Stablecoins Could Be Securities
U.S. Securities and Exchange Commission (SEC) Chair, Gary Gensler recently went on record saying that digital currencies whose price are pegged to traditional securities might fall under the securities laws.
The SEC Chair made the statement while speaking to the American Bar Association on July 20.
Gensler said that some platforms are offering digital assets that are “priced off” securities and resemble derivatives products.
“Make no mistake: It doesn’t matter whether it’s a stock token, a stable value token backed by securities, or any other virtual product that provides synthetic exposure to underlying securities. These platforms – whether in the decentralized or centralized finance space – are implicated by the securities laws and must work within our securities regime.”
While Gensler did not name-drop any specific token per se, his remarks come at an interesting time when financial regulators in the U.S. are keeping a close eye on stablecoins.
As reported by BTCManager, U.S. Treasury Secretary Janet Yellen recently convened the top financial agencies in the U.S. to discuss stablecoins.
At the time, Yellen remarked:
“Bringing together regulators will enable us to assess the potential benefits of stablecoins while mitigating risks they could pose to users, markets, or the financial system. In light of the rapid growth in digital assets, it is important for the agencies to collaborate on the regulation of this sector and the development of any recommendations for new authorities.”
Stablecoins Under Regulatory Fire
Keeping up with the crypto bull run witnessed earlier this year, stablecoins witnessed astounding demand by investors. This hardly comes as a surprise as most of the crypto-assets are paired with stablecoins such as Tether (USDT) or USDC.
Of late, however, stablecoins’ excessive usage has come under regulatory scrutiny with financial regulators the world over considering framing regulations for fiat-pegged digital currencies.
On June 8, BTCManager reported the Bank of England (BoE) stated that stablecoin payments should receive the same regulations as bank payments assuming the former gains widespread adoption by users.