U.S. Treasury to give SEC major powers over stablecoins like Tether, people familiar with the matter say
This article comes fromDecrypt, original author: Jeff Benson
Odaily Translator | Nian Yin Si Tang
This article comes from
, original author: Jeff Benson
Odaily Translator | Nian Yin Si Tang
Now it seems like it's really coming.to reportThe U.S. Securities and Exchange Commission (SEC) has gained the upper hand in a debate among U.S. regulators over how to regulate stablecoins, clearing the way for the SEC to regulate stablecoins.
According to Bloomberg today based on anonymous sources
to report
, the Treasury Department will let the SEC take the lead in regulating stablecoins such as Tether and USDC. The US SEC's sister agency, the Commodity Futures Trading Commission (CFTC), will also play a role. The Treasury will outline the powers in a report to be published as early as this week.
According to Bloomberg News, US SEC Chairman Gary Gensler has lobbied Yellen and other members of the President's Financial Market Working Group to authorize the SEC to formulate policies for stablecoins and implement them.
At the draft stage, the report calls on Congress to create a separate bank charter for stablecoin issuers. These digital currencies are backed by real-world assets. Given the political divide, Bloomberg said, “Gensler pushed for clarification that the SEC has existing authority to oversee tokens as they participate in investment transactions.”Both Gensler and Federal Reserve Chairman Jerome Powell have publicly stated that centralized stablecoins are similar to money market funds and should be regulated accordingly. This would put them under the jurisdiction of the SEC.Tether is the world's largest stablecoin and the fourth largest cryptocurrency asset with a market cap of over $70 billion. For years, the company had claimed that each Tether was backed by a dollar in the bank, but was forced to revise its statement following an investigation by the New York Attorney General. A recent "transparency report" revealed that the majority of Tether's holdings are in commercial paper, a form of debt that gives the company yield but could become riskier during a financial crisis .
A report in June showedhint, only 60% of the assets held by USDC are cash, and the rest comes from certificates of deposit, U.S. Treasury bonds, commercial paper and corporate bonds.
Since taking office in April of this year, Gensler has beenhint, he is preparing to expand regulation of stablecoins and their decentralized finance (DeFi) market. He has said the rapidly expanding asset class "could provide a boost to those seeking to sidestep a range of public policy objectives," even with implications for national security.
