- The draft bill by US Representative Sylvia Garcia seeks to classify stablecoins as securities.
- According to Warren Davidson, another US Representative, Libra looks “a lot like a security.”
Facebook is yet to find a regulatory breakthrough for its proposed digital project, Libra. However, if the United States Congress goes ahead with the proposal to draft a bill describing stablecoins, Libra could quickly fall under the wings of the Securities and Exchange Commission.
This follows the introduction of a bill to the House Financial Services Committee on October 18 by Sylvia Garcia, the Representative for Texas’s 29th congressional district. That particular draft bill is titled the “Stablecoins are Securities Act of 2019.” The bill seeks to provide oversight for stablecoins within the Securities Act of 1993. It includes an amendment of the term security to contain another term referred to as “managed stablecoins.’
The same sentiments regarding Libra come from Warren Davidson, a US representative who played a major role in the authorship of the Token Taxonomy Act. Davidson told Cointelegraph that Libra should be classified as a security and therefore should fall under the SEC.
Davidson explained regarding the draft bill:
“It has nothing to do with stablecoins. It has to do with whether there’s a central authority that can alter it.”
He continued:
“It’s the ability to destroy your value […] And in that sense, when you’re placing all your faith in the value of that token on the actions of a central authority, that’s where I tend to agree with Jay Clayton. That looks a lot like a security.”
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