The U.S government is calling for the regulation of cryptocurrencies, and it’s expected that more countries will follow suit in 2019; some call this a necessary step to protect consumers from volatility and fraud.
As investors scramble to secure their capital, the need for stablecoins is becoming increasingly high. Regulators are now weighing in on how they should be regulated and what criteria must exist before an entity can claim a stablecoin as theirs.
The “stablecoin regulation reddit” is a call for the U.S. Securities and Exchange Commission to regulate stablecoins as securities. The article discusses how there are many benefits to regulating stablecoins, such as increasing investor protection and improving market efficiency.
Legislation on Stablecoins
The Treasury Department published a 22-page study on Monday urging Congress to regulate stablecoins.
Stablecoins have seen a meteoric ascent in recent years as a key component in the larger digital asset market. Initially a niche commodity dominated by Tether, the market is now flooded with choices ranging from USDC to GUSD and beyond. This growth in popularity has pushed stablecoins directly in front of authorities, as shown by the aforementioned study.
Several legislative proposals are given in the study, including but not limited to the following.
- ‘Require insured depository institutions for stablecoin issuance.’
- ‘Require custodial wallet providers to be regulated by the federal government.’
- ‘Make stablecoin issuers abide by activity rules that prohibit association with commercial businesses.’
While no formal decisions have been made yet, any upcoming decision has the potential to reverberate throughout the whole digital asset market. Needless to say, everyone’s attention will be drawn to the handling of stablecoins in the future.
If regulators didn’t have enough on their plates already with all of the Bitcoin-related ETF filings, they will now. Following the approval and launch of two Bitcoin Futures-based ETFs in the United States, a number of additional firms have made applications for similar products.
The Securities and Exchange Commission (SEC) in the United States is being requested to update current regulations and authorize the NYSE Arca Bitwise Bitcoin ETP Trust.
“…the investing aim of the Trust is to strive to give exposure to the value of bitcoin owned by the Trust, minus the Trust’s operating expenditures,” the business writes in its filing. The Trust shall hold bitcoin and calculate its Net Asset Value (“NAV”) at the end of each business day using the CF Bitcoin-Dollar US Settlement Price (“CME US Reference Rate”) to meet its investment goal.
The Trust’s sole asset will be bitcoin under normal circumstances, and cash in exceptional situations. The Trust shall avoid using derivatives that expose it to counterparty and credit concerns.”
Meanwhile, the Securities and Futures Commission (SFC) in Hong Kong has received a flood of petitions to authorize a Bitcoin ETF. This was verified at a recent conference, when SFC Deputy CEO Julia Leung spoke about regulatory issues, including accessibility to such items.
With crypto-based exchange-listed securities now accessible in a number of countries, it’s not unexpected that a growing number of regulatory authorities are contemplating taking action.
Hashlets Are Classified As ‘Not Securities’
A jury recently debated on the classification of some digital assets as securities, in what is considered to be a first in the United States. While the case, which dates back to 2016, did include instances of deception, the jury determined that the defendants’ numerous digital assets marketed to investors were not securities.
Hashlets, Hashpoints, Paycoin, and Hashstakers were digital assets that represented proportionate shares of hashing power in GAW Miners’ mining operations.
While the case itself isn’t very noteworthy, the verdict is noteworthy since it not only establishes a precedent but also exposes the public’s opinion of such items.
The “stablecoin news” is a weekly publication that provides the latest information on cryptocurrency regulations.
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