US lawmakers are looking to classify stablecoins as securities in the country. Legislators Sylvia Garcia and Lance Gooden introduced a bill to the House Financial Services Committee to regulate stablecoins. With Libra considering adopting fiat-pegged stablecoins rather than a single token supported by a basket of national currencies, the proposed crypto project could encounter another regulatory hurdle.
02 December, 2019 | AtoZ Markets – US lawmakers have introduced a bill to regulate stablecoins as securities. The proposed legislation may impose a greater regulatory burden on projects in the stablecoin such as Libra. Texas officials, Lance Gooden and Sylvia Garcia, both proposed a bill entitled “Managed Stablecoins and Securities Act of 2019” earlier in October this year.
Libra coin as a Security
As reported by The Hill, legislator Sylvia Garcia said that managed stablecoins, such as the proposed Libra, are securities under existing law. She added that this bill only clarifies the law to remove any ambiguity. Representative Gooden also argued that the United States should play a leading role in shaping the legal landscape of cryptos and the digital space in general. The proposed bill will allow the US SEC to have more control over the cryptocurrency industry.
Facebook’s stablecoin project, Libra, is pegged with multiple fiat currencies. But Facebook has denied that Libra is security. If the proposed bill becomes law, the problems of Libra will increase as the regulation of cryptocurrency becomes stricter. Currently, there is no law specifying whether a cryptocurrency is a security or a good.
Previously, several Ripple investors had filed a lawsuit against the company for allegedly selling non-registered securities. The case is currently before the courts.
Current State of US Crypto Regulation
Some US stakeholders in cryptography and blockchain deplored the current state of regulation of the country’s digital asset space. Jeremy Allaire is the CEO of Goldman Sachs Backed Circle, which is a crypto-payments company. Earlier in 2019, he said the unclear US regulations on crypto forced companies to move their projects to other countries.
In fact, during his recent appearance before Congress, Facebook CEO Mark Zuckerberg warned against strict digital regulation in the United States. According to the Facebook leader, such measures are leaving control of the emerging digital economy to China.
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