US Lawmakers Likely to Pass A Bill That Identifies Stablecoins as Securities
The U.S. lawmakers and regulators are considering to introduce a new bill which classifies stablecoins as securities. Stablecoins are basically cryptocurrencies whose value is pegged to fiat currencies or any other commodity whose value remains relatively stable over a period of time.
In a draft bill published this week, Democratic representative from Texas Sylvia Garcia submitted a new legislation to the House of Financial Services Committee asking them to regulate stablecoins under the Securities Act of 1933. The bill suggests to get clarity over the regulatory guidance on stablecoins.
It states: “The market value of such digital asset is determined, in whole or in significant part, directly or indirectly, by reference to the value of a pool or basket of assets, including digital assets, held, designated, or managed by one or more persons.”
The proposed legislation comes at a time when big organizations like Facebook are working towards the launch of its Libra cryptocurrency. Facebook’s entry in the crypto space has forced U.S. lawmakers to serious consider regulations for crypto assets.
Since the Libra announcement in 2019, Facebook has faced severe criticism and backlash from the regulators. The lawmakers have even asked Facebook to consider the entire roll-back of the project.
However, it seems that Facebook is still working tirelessly to convince the regulators. Later today, Facebook CEO Mark Zuckerberg will testify in front of the U.S. Congress trying to address the concerns of the regulators regarding Libra launch.
If the latest proposed bill becomes a law, it will give the U.S. SEC and absolute jurisdictional authority over all the stablecoins operating in the country.
Last week, WorldCoinIndex reported that the U.S. lawmakers are actively debating the prospects of having a digital dollar. A U.S. Federal Reserve official stated that the lawmakers are weighing the risks of the USD losing its dominant position as the world’s reserve currency in case any other digital sees mass adoption.