The SEC is Given Newfound Authority on Stablecoins

October 26, 2021

Regulators in the U.S. seem to have decided that the Securities and Exchange Commission (SEC) will take the lead in the United States’ campaign to regulate stablecoins. This according to a Bloomberg report citing anonymous sources “familiar with the matter”.

The U.S. Treasury Department will announce the SEC’s “significant authority” in an upcoming stablecoin report, scheduled for release this week.

The report will further provide insights on the regulatory jurisdiction of the Commodity Futures Trading Commission (CFTC) and Treasury Department on the matter of stable tokens.

The Treasury’s report was put on the agenda in July, during a meeting of The President’s Working Group for Financial Markets (PWG) in July, with the intention to explore creating a new type of banking charter for stablecoin issuers and tackle other regulatory concerns.

The Working Group includes high ranking government officials, including Treasury Secretary Janet Yellen, SEC Chairman Gary Gensler, Federal Reserve Chairman Jerome Powell, and acting CFTC head Rostin Behnam.

Gensler is reported to have been pushing for further expansion in the SEC’s regulatory authority over stablecoins. This would entail allowing the commission to singlehandedly pursue enforcement actions against issuers. Gensler also wants to know exactly what powers the SEC has to monitor stablecoin-based investment transactions.

Furthermore, as Bloomberg reveals, the PWG report calls on Congress to bring similar regulations guiding bank deposits to the stablecoin sector.

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Author: Peter Siu

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