Bill Introduced to US Gov Classifying Stablecoins as Securities

With the number of stablecoins increasing significantly, and large-scale projects such as Facebook’s Libra bringing them front and center, the United States Congress may consider a bill to classify stablecoins as securities.

Stablecoins, as the name suggests, aim to be a more stable form of cryptocurrency, as their values are pegged to a fiat currency or other asset that is by nature, more stable than virtual currencies.

This Tuesday, Rep. Sylvia Garcia (D-Texas) published a draft bill that seeks to provide clarity regarding the nature of stablecoins. In particular, the bill introduces legislation to the House Financial Services Committee to regulate stablecoins under the Securities Act of 1933.

In particular, the bill states: “It is the sense of Congress that— (1) digital assets, known as managed stablecoins, are investment contracts and therefore are securities within the meaning given the term in section 2(a) of the Securities Act of 1933;

“and (2) because issuers of managed stablecoins nevertheless maintain that managed stablecoins are not securities, it is appropriate for Congress to provide clarity by amending statutory definitions of the term security to include managed stablecoins.”

Response to Facebook?

The bill could be in response to Facebook’s Stablecoin Stablecoin Unlike other cryptocurrencies like Bitcoin and Ethereum, stablecoins are cryptocurrencies that have been designed to keep a stable value. Placing a greater emphasis on stability over volatility can be a huge draw for some investors. Many individuals can be turned off from large swings and uncertainty presented by cryptos relative to other traditional assets.Stablecoins control for this volatility by being pegged to another cryptocurrency, fiat money, or to exchange-traded commodities, including Unlike other cryptocurrencies like Bitcoin and Ethereum, stablecoins are cryptocurrencies that have been designed to keep a stable value. Placing a greater emphasis on stability over volatility can be a huge draw for some investors. Many individuals can be turned off from large swings and uncertainty presented by cryptos relative to other traditional assets.Stablecoins control for this volatility by being pegged to another cryptocurrency, fiat money, or to exchange-traded commodities, including Read this Term the Libra, which has attracted a significant amount of attention from US politicians since the Whitepaper Whitepaper A whitepaper is defined as a pitch or persuasive, authoritative, and often in-depth report on a specific topic that presents a problem along with a respective solution. Marketers rely on whitepapers for a variety of reasons, most simply to educate an audience about a particular issue or to promote a particular methodology. In the cryptocurrency world, a whitepaper is a document that should contain all of the information about the technology that was used to build a cryptocurrency network, and ho A whitepaper is defined as a pitch or persuasive, authoritative, and often in-depth report on a specific topic that presents a problem along with a respective solution. Marketers rely on whitepapers for a variety of reasons, most simply to educate an audience about a particular issue or to promote a particular methodology. In the cryptocurrency world, a whitepaper is a document that should contain all of the information about the technology that was used to build a cryptocurrency network, and ho Read this Term was revealed in June of this year.

“The market value of such digital asset is determined, in whole or in significant part, directly or indirectly, by reference to the value of a pool or basket of assets, including digital assets, held, designated, or managed by one or more persons,” the bill published today also states.

Should this bill be passed and signed into law, it would give the Securities and Exchange Commission (SEC) authority over all stablecoins, which would be a big step to creating clarity regarding the digital asset and, on the same hand, the future of Facebook’s project.

The future is unclear

However, it is important to point out that the introduction of the bill does not guarantee that the proposed rule will ever become law. Firstly, it needs to be voted out of committee, passed by the House of Representatives, moved up to the Senate and eventually signed into law by the US President.