US Officials are Discussing How to Regulate Cryptocurrencies and Stablecoins
The US Securities and Exchanges Commission received a letter from Colorado Senator John Hickenlooper on Thursday calling for clearer regulations for digital assets:
The lawmakers asked the agency to clarify what types of digital assets are securities, how digital securities are issued and listed, set up a registration service for trading platforms for securities of digital assets, establish regulations on how trading and custody of digital assets are conducted should and determine what disclosures are required so that potential investors can be informed. “Given the complexity of these issues, and the recognition that some digital assets are securities, others may be commodities, and others may be subject to an entirely different regulatory regime, a formal regulatory process is now required,” Hickenlooper wrote in his letter.
“This will greatly improve policy development and allow the SEC to collect opinions and understand concerns.” In addition, clear rules will be established that will benefit investors who may not currently be fully aware of the risks involved in investing in digital assets…”
Hickenlooper also wrote that applying old market rules to cryptocurrencies would result in financial services becoming more expensive and less accessible; making the agency’s disclosure system less useful to US citizens. “I realize these questions are complicated, but it’s time for the SEC to get involved. Empowering innovators, encouraging financial innovation, protecting investors and ensuring market integrity are consistent principles,” the lawmaker concluded in his letter. “I look forward to working with you to establish prudent rules as this powerful technology evolves.”
Meanwhile, the Securities and Exchange Commission wants some changes of its own, Reuters reports:
The US Congress should give the Commodity Futures Trading Commission more powers to oversee cryptocurrency stablecoins to reduce risks to the financial system, Gary Gensler, chairman of the Securities and Exchange Commission, said on Friday… With a market cap of around $150 billion, stablecoins have many similarities to money market funds and need to be regulated accordingly, Gensler told a conference at Georgetown University’s Psaros Center for Financial Markets and Policy in Washington… “I think the CFTC could have greater powers. They currently have no direct oversight bodies over the underlying non-security tokens,” he said.
The Financial Stability Oversight Council, a U.S. regulatory body made up of top financial regulators, earlier this month recommended that Congress pass legislation addressing the risks that digital assets pose to the financial system, including bills to strengthen crypto spot market oversight and stablecoins. It remains unclear when Congress might pass crypto-related legislation, although several bills regulating stablecoins and digital commodities have been introduced.