TL; DR Breakdown
- SEC to take charge in regulating the stablecoins sector in the United States.
- PWG is proposing a change in banking charters to accommodate stablecoins.
The U.S. regulatory agencies have authorized the Securities and Exchange Commission (SEC) to head the U.S. efforts in governing the stablecoins sector. The regulatory authority is taking over regulating the cryptocurrency industry. According to secret sources, the agency struck a deal with other U.S. firms. They will now propose laws and manage stablecoins.
The treasury board report will announce the agency’s role in stablecoin. The report will help you understand the complex regulatory landscape of stable tokens. Besides, it defines how agencies such as the CFTC and Treasury handle stable tokens.
Banking charter to change to accommodate stablecoins
It’s no secret that banking regulations are changing. But what does this mean for your bank? In July, the Treasury issued its report in a meeting with the Presidential Working Group for Financial Markets (PWG). Then, the PWG proposed the creation of new charters to accommodate stablecoin issuers.
Besides, SEC is jostling for expanding its regulative field to have stablecoins, thus allowing them to execute actions on issuers if necessary.
The PWG is a top-notch group of people from different governing agencies. It includes Janet Yellen, Gary Gensler, Jerome Powell, and Rostin Behnam.
The stablecoin market is a new and unregulated space. But Gensler wants clarity on what powers the agency can exert in managing it.
The report will call on Congress for stiffer stability regulations to protect investors. Moreover, laws that touch on bank deposits in the stablecoin department.
Recently, Gensler urged Congress to assist the SEC and CFTC in controlling stablecoins. In his opinion, these dollar-pegged assets are like “poker chips at a casino.”
There is evidence of a surge in the stablecoin sector since the year began. For instance, the leading provider of this currency, Tether (USDT), has huge gains. Its value surged to 229% to $69 billion.
A surprising second-ranked USD coin has also experienced a meteoric rise this year. Its capitalization is now valued at $32.52 billion, up 706%.
Regulatory concerns
Stablecoins are becoming popular as the crypto market continues to grow. They work because they’re backed by real-world assets, like U.S. Dollars or Euros, for instance! Stable coins also have an adjustable value, so you’re sure your investment is safe with them.
Tether has been the target of authorities for its false remarks about coin reserves. Recently, it settled with the New York Attorney General over false allegations. It turns out this isn’t an isolated incident. Besides, the Commodity Futures Trading Commission also made them pay $41 million over false claims.
