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Draft Bill in the US Could Classify Stablecoins as Securities

24 October 2019 06:43, UTC

A new bill has been drafted in the United States Congress which aims to recognize stablecoins as securities under US law. The bill is clearly directed towards Facebook’s Libra which has a planned launch in 2020 once the SEC, as well as the CFTC, decides that it’s time for regulatory approval.

However, a representative of Texas 29th congressional district, Sylvia GARCIA considers that the way stablecoins and Libra, in general, have been introduced to the public, as well as the central government, clearly resembles the attributes of a security. Therefore the introduced “Stablecoins are Securities Act of 2019” aims to formally classify all stablecoins including Libra, TUSD and various others as stablecoins under the US law and therefore subject to the US Securities Act of 1933.

This would give the Securities and Exchange Commission a much more “on-hand” approach to how stablecoins are distributed and used in the US economy as well as a more customizable framework under which it could be regulated.

However, despite the fact that most crypto fans could perceive this bill as a hit to the decentralization of cryptocurrencies, it needs to be seen that this could be the only way Facebook’s Libra manages to be approved by the SEC and launched in a conclusive manner.