New Crypto Bill Sent to Congress Looks to Classify Stablecoins as Securities
Sylvia Garcia, a Democrat lawmaker from Texas, has recently introduced to Congress a bill that may cause several issues for the crypto market. According to this new bill, cryptocurrencies pegged to fiat currencies, commonly known as stablecoins, would be considered securities.
The draft bill was introduced to the House Financial Services Committee and it would regulate all stablecoins (including Tether and some other ones like Facebook’s Libra after the launch) under the well-known Securities Act, which was created back in 1933.
According to the bill, the market value of the stablecoins is completely determined by a limited group of people or companies that hold one or a basket of assets. This means that their value is directly linked to third-parties, something that also happens with securities.
This project can clearly be seen as a response to Facebook’s Libra. The cryptocurrency was introduced to the world just a few months ago and it caused quite a lot of controversy among regulators. The new crypto will be tied to a basket of assets in order to have a stable price, which would make it a stablecoin.
At the moment, the regulatory scrutiny over the Libra is pretty intense. The CEO of Facebook, Mark Zuckerberg, is even set to testify soon in order to defend the project and explain to the lawmakers why they should approve it.
If the law is passed, however, this could mean several problems for Facebook. The U. S. Securities and Exchange Commission (SEC) would take over the authority to regulate the tokens and not everybody would be able to use the Libra.