The U.S. Securities and Exchange Commission is about to be given ‘significant authority’ over stablecoins in a Treasury Department report due out this week.
The Securities and Exchange Commission looks set to gain substantial powers to regulate stablecoins for the foreseeable future.
According to Bloomberg, the U.S Treasury Department and several other agencies will release a report this week specifying “that the SEC has significant authority over” stablecoins such as Tether, USD Coin and Binance USD.
Stablecoins are cryptocurrencies pegged one-to-one with the U.S. dollar or other currencies, such as the euro or pound sterling. Stablecoin issuers generally maintain this by maintaining caches of dollars — and sometimes less liquid investments — that back their tokens dollar for dollar.
Bloomberg cited several anonymous sources familiar with the Treasury report, one of whom said it will call upon Congress to pass legislation regulating stablecoins much like bank deposits.
The report’s conclusions are said to be the result of aggressive lobbying by SEC Chairman Gary Gensler, who argued that his agency “has existing powers to oversee tokens when they’re involved in investment transactions.”
It will also “reaffirm” that the Commodity Futures Trading Commission (CFTC) has a stablecoin oversight role.
Gensler is extremely familiar with cryptocurrency, having taught the subject at MIT for several years until his appointment to lead the SEC.