IOSCO Report: Stablecoins May Fall Under Securities Regulations In Certain Circumstances

    • A new report by the International Organization of Securities Commission (IOSCO) on Stablecoins has highlighted that these digital assets are subject to the laws within the jurisdiction of operation.
    • This means that in some countries they may be regulated as securities depending on the specifics.

    The report was published on March 23 and shed more light on the legal uncertainty around stablecoins. IOSCO highlighted an example that sounds pretty similar to Facebook’s Libra. According to the summary, if an entity runs its own stablecoin on a private blockchain with a unique form of governance, then the asset falls under securities oversight.

    Similarly, despite their label, many so-called stablecoins are neither “stable” nor “coins” in the true sense of either word.

    So, whilst stablecoin is a marketing term that has been widely adopted by industry, more neutral terms, may be more accurate starting points for regulatory analysis in many instances

    This report by IOSCO further highlights that stablecoins would have to comply with some international standards if they were to play a bigger role in the financial ecosystem. For instance, if a crypto coin grows to the level of being a financial market infrastructure, it should be within the PFMI’s (Principles for FMI’s). The report, however, recognizes it will not be a walk in the park;

    “It may be challenging for some systemically important stablecoin arrangements to comply with the high standards of the PFMI, particularly for those systemically important stablecoin arrangements that are partially or highly decentralized,”

    According to the report, the fact that stablecoin contracts may have obligations and pegged interests is somewhat proof that they may fall under securities. So far, a number of countries including the U.S and U.K have begun the process of formulating laws for blockchain and crypto markets.

    Get Free Email Updates!

    *Action* Enter Best Email to Get Trending Crypto News & Bitcoin Market Updates

    I will never give away, trade or sell your email address. You can unsubscribe at any time.

    Edwin Munyui
    Edwin Munyui
    Edwin is a FinTech enthusiast with a particular interest in blockchain technology and cryptocurrencies. He has worked as an author in the blockchain space since 2017 and enjoys creating content that both crypto veterans and newbies can understand. His simple writing style and financial market knowledge have made him a reputable fundamental and technical analyst with the ability to handle any topic around blockchain and crypto over the years.

    [Alert] Use the author's self-conducted information at your own risk, do you own research, never invest more than you are willing to lose.

    [Disclosure] The published news and content on BitcoinExchangeGuide should never be used or taken as financial investment advice. Understand trading cryptocurrencies is a very high-risk activity which can result in significant losses. Editorial Policy \\ Investment Disclaimer


    Please enter your comment!
    Please enter your name here


    Live Bitcoin Price & Latest BTC Charts

    Today's Latest Crypto News

    Crypto Exchange Binance Looks To Join Houbi, OKEx In Launching A Mining Pool

    Top crypto exchange Binance has plans to launch its own mining pool, according to a Russian crypto news outlet Coinlife on Tuesday. The news was...

    Coinbase Custody Moves Tezos (XTZ) Staking Bakery From US to Ireland For Regulatory Reasons

    Coinbase has managed to move the Tezos Staking Bakery, the largest validator since its launch in 2019 which the exchange has been operating since...

    BitMEX’s Operator HDR Global Grants $100k Towards Bitcoin Core Development

    BitMEX’s parent company HDR Global Trading Limited has awarded $100k to the Bitcoin core developer Michael Ford. This will be the second grant towards...

    Bitcoin, Ethereum, DogeCoin, Lightning Network's Code to be Buried Under Arctic Ice

    The Bitcoin codebase snapshot will be encoded onto film and afterwards be stored for 1,000 years under ice, in Svalbard, Norway. The move is included...

    Huobi Wallet to Integrate Crypto Lender Cred Allowing Users To Earn Interest

    The crypto exchange offering wallet services Huobi has closed a partnership with the decentralized crypto lending company Cred in order to offer user's interest...

    BitcoinExchangeGuide is a hyper-active daily crypto news portal with care in cultivating the cryptocurrency culture with community contributors who help rewrite the bold future of blockchain finance. Subscribe on Google News, see the mission, authors, editorial links policy, investment disclaimer, privacy policy. Got News? Contact us, we are human too. Note: nothing here is financial advice, do your own research thoroughly.