- Sylvia Garcia published a draft bill related to stablecoins.
- If the bill is passed, the assets will fall under the SEC’s regulation.
A Republican Sylvia Garcia proposed a draft bill that may clarify the nature of stablecoins by classifying them as securities.
American politicians are concerned about the rising number of stablecoins issued by large corporations like Facebook. Being pegged to US dollar or other fiat currencies and real assets like gold they are considered more stable than traditional cryptocurrencies. However, some experts and global regulators fear that they may create serious risks to the financial system.
On Tuesday, Rep. Sylvia Garcia (D-Texas) proposed a draft bill that may include stablecoins into the scope of the Securities Act of 1933.
“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,” the bill states.
If the bill is passed, all stablecoins will be regulated by the US Securities and Exchange Commission (SEC). This move will introduce more clarity regarding the nature of digital assets. Also, the bill may answer some concerns about Facebook’s project Libra.
“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 also states.
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