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US Treasury to grant SEC oversight of stablecoin regulation

Updated: Jul 25, 2024
Published: Oct 26, 2021
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The US SEC would be allowed to oversee the activities of stablecoins.

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US SEC to oversee the stablecoin market

The United States Securities and Exchange Commission (SEC) will reportedly be tasked with overseeing the stablecoin market. This is according to Bloomberg, citing sources close to the matter.

The Treasury Department and other agencies will specify in a highly-anticipated report -- expected to be published this week -- that the SEC will have significant authority over stablecoins such as Tether (USDT), USDC and others. The report will also urge the United States Congress to pass legislation specifying that stablecoins should be regulated similarly to bank deposits, one of the sources added. The sources preferred to stay anonymous because discussions are still private at this point.

Furthermore, the report called for the lawmakers to pass legislation that would, among other things, create a new type of bank charter for companies that issue stablecoins. The US SEC will be helped by the Commodity Futures Trading Commission in actively overseeing the stablecoin market.

Gensler has been clamoring for more SEC oversight in the crypto space

If the details of the report come to pass, it wouldn’t be a surprise as the SEC chair Gary Gensler has been pushing for more power and resources to increase the regulator’s oversight of the market.

In August, Gensler sent a letter to the US Congress seeking additional authority to regulate cryptocurrency exchanges. The SEC chair also wants a broader regulation of the cryptocurrency market to cover decentralized finance (DeFi), stablecoins and crypto exchanges.

While most of the current oversight focuses on centralized entities, Gensler argued that some of the DeFi projects fall within the purviews of the regulatory agency and therefore need to be regulated.

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