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The US Securities and Exchange Commission (SEC) has moved closer to having significant oversight on stablecoins, said Bloomberg in a report citing people familiar with the matter. The Treasury Department and other agencies are reportedly planning to release a report this week that will indicate that the SEC has significant authority to regulate fiat pegged cryptos. The report will also urge Congress to pass legislation specifying coins that should be regulated similarly to bank deposits, one of the people said. SEC Chairman Gary Gensler has reportedly pushed for the changes behind closed doors. He is further seeking to clarify that they will take a more active role in stablecoin regulation in the short term, according to the report. Meanwhile, the agency is awaiting legislative changes in the long term.
FATF Travel Rule Compliance
Amidst this, the dominant stablecoin Tether announced on Tuesday that it would be using Notabene, an end-to-end solution designed for crypto Travel Rule compliance. Tether will be testing the solution to combat money laundering and crime in cross-border VASP-to-VASP transactions. It will allow Tether to see how it can send other Virtual Asset Service Providers (VASPs) the required information regarding its customers in a secure manner. This move will help the USDT stablecoin issuer comply with the money-laundering watchdog Financial Action Task Force’s (FATF) guidelines. As per the guidelines, VASPs should transmit specific customer data between counterparties for transactions over a certain threshold which the regulator says will help them in combating money laundering, terrorist financing, and abiding by sanctions measures. “It’s important that we work with other large VASPS to build this industry from the ground up,” said Leonardo Real, CCO of Tether.
“Because the Travel Rule traditionally applies to financial institutions, we see this as an opportune moment to foster cooperation across traditional and digital channels in order to create better services for customers globally.”
OCC Supervision Plan Covers Crypto
In other news, in its bank supervisory objectives for the fiscal year 2022, the Office of the Comptroller of Currency’s planning guidance for examiners included crypto assets besides the transition from LIBOR, fintech, and climate risk among areas of focus. The OCC said its supervision would focus on the impacts of the COVID-19 pandemic and resulting operational, financial, compliance, and economic implications. For fintech and crypto assets, bank examiners
“should identify banks that are implementing significant changes in their operations using new technological innovations and evaluate implementation, including use of cloud computing, artificial intelligence, and digitalization in the risk management processes.”