{"id":362201,"date":"2021-11-03T18:32:46","date_gmt":"2021-11-03T15:32:46","guid":{"rendered":"https:\/\/en.buradabiliyorum.com\/stablecoins-report-sec-wont-lead-regulation-congress-urged-to-act\/"},"modified":"2021-11-03T18:32:46","modified_gmt":"2021-11-03T15:32:46","slug":"stablecoins-report-sec-wont-lead-regulation-congress-urged-to-act","status":"publish","type":"post","link":"https:\/\/buradabiliyorum.com\/en\/stablecoins-report-sec-wont-lead-regulation-congress-urged-to-act\/","title":{"rendered":"# Stablecoins report: SEC won\u2019t lead regulation, Congress urged to act"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_85 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-6a415525bf781\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #dd3333;color:#dd3333\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #dd3333;color:#dd3333\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a415525bf781\" checked aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/buradabiliyorum.com\/en\/stablecoins-report-sec-wont-lead-regulation-congress-urged-to-act\/#All_the_presidents_men_and_women\" >All the president\u2019s men and women<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/buradabiliyorum.com\/en\/stablecoins-report-sec-wont-lead-regulation-congress-urged-to-act\/#Claims_to_authority\" >Claims to authority<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/buradabiliyorum.com\/en\/stablecoins-report-sec-wont-lead-regulation-congress-urged-to-act\/#Waiting_for_Congress\" >Waiting for Congress<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/buradabiliyorum.com\/en\/stablecoins-report-sec-wont-lead-regulation-congress-urged-to-act\/#In_for_a_long_wait\" >In for a long wait?<\/a><\/li><\/ul><\/nav><\/div>\n<p>&#8220;<strong># Stablecoins report: SEC won\u2019t lead regulation, Congress urged to act <\/strong>&#8221;<br \/>\n<img decoding=\"async\" src=\"https:\/\/images.cointelegraph.com\/images\/840_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjEtMTEvOGQ1ZGQ4MjktMzc4MC00M2Q1LTljZTktMDFhZWEyYzlmOTRhLmpwZw==.jpg\" \/><\/p>\n<div class=\"post-content\" data-v-128018ef>On Nov. 1, the United States President\u2019s Working Group on Financial Markets (PWG) released its long-anticipated report and policy recommendations on stablecoins. The document\u2019s main focus is on prudential risks that \u201cpayment stablecoins\u201d \u2014 or those meant to maintain a stable value against a reference fiat currency \u2014 could pose to users and financial stability.<\/p>\n<p>The PWG\u2019s key message is that while stablecoin use is currently largely limited to facilitating digital asset transactions, under certain conditions the asset class could achieve much wider retail adoption, necessitating a comprehensive federal prudential framework to be enacted by Congress soon. <\/p>\n<p>Here is a rundown of the consequential points that the report raises \u2014 and some that it does not.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"All_the_presidents_men_and_women\"><\/span>All the president\u2019s men and women<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>The PWG is composed of the heads of the Securities and Exchange Commission (SEC), Commodity Futures Trading Commission (CFTC) and Federal Reserve System, with the secretary of the Treasury Department leading the group. The Federal Deposit Insurance Corporation (FDIC) and the Office of the Comptroller of the Currency (OCC) also contributed to the interagency report.<\/p>\n<p>Given this formidable concentration of federal financial regulators, the results of their joint effort have been eagerly anticipated as a reliable representation of where the current administration stands on stablecoin regulation.<\/p>\n<p>Anonymous reports that emerged shortly before the document\u2019s publication alleged that the group\u00a0had agreed on a plan to hand the SEC significant authority over stable tokens. This further added to the suspense around the interagency report, as such a regulatory designation would necessarily require an attendant recategorization of the underlying asset class.<\/p>\n<p>The prospect of the SEC taking the lead in stablecoin regulation left some actors in the crypto space unsettled. Speaking to Cointelegraph ahead of the report\u2019s publication, C. Neil Gray, partner at law firm Duane Morris, said:<\/p>\n<blockquote><p>\u201cIndustry participants likely see the SEC\u2019s push to take point in this area just as another example of SEC overreach in the cryptocurrency space, and fear that the SEC will regulate stablecoins by enforcement rather than by rule, as some perceive it to be doing in other areas.\u201d<\/p><\/blockquote>\n<p>For compliant crypto players, however, any kind of certainty is better than the lack thereof. Sujit Raman, partner in the privacy and cybersecurity practice of law firm Sidley and a former associate deputy attorney <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/general\/\" data-internallinksmanager029f6b8e52c=\"3\" title=\"General\" target=\"_blank\" rel=\"noopener\">general<\/a> at the U.S. Department of Justice, observed that clarity on the limits of each regulator\u2019s responsibilities was still welcome. Raman noted:<\/p>\n<blockquote><p>\u201cIn the absence of new legislation, stablecoins remain subject to the concurrent and potentially overl<a href=\"https:\/\/buradabiliyorum.com\/en\/category\/download-scripts-themes-apps\/\" data-internallinksmanager029f6b8e52c=\"9\" title=\"Download Scripts &amp; Themes &amp; Apps\" target=\"_blank\" rel=\"noopener\">app<\/a>ing jurisdiction of a number of federal and state regulatory regimes. That is why any agreement among the relevant federal agencies about who will take the lead in regulating stablecoins is important.\u201d<\/p><\/blockquote>\n<h2><span class=\"ez-toc-section\" id=\"Claims_to_authority\"><\/span>Claims to authority<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>In the buildup to the report\u2019s publication, there had been signs that the SEC was not the only U.S. regulator seeking to expand its presence on the digital asset scene.<\/p>\n<p>Marc Powers \u2014 a law professor, former SEC attorney and Cointelegraph Magazine columnist \u2014 believes that while the SEC has been more active in enforcement and guidance on digital assets in the past four years, the CFTC has asserted jurisdiction over Bitcoin (BTC), which it has deemed a commodity. <\/p>\n<p>Furthermore, the acting chairman of the CFTC, Rostin Behnam,\u00a0claimed last week that as much as 60% of digital assets can be classified as commodities, which amounts to proposing that the agency become the lead U.S. cryptocurrency regulator.<\/p>\n<p>Ultimately, contrary to expectations, the interagency report did not give precedence to either of the regulatory bodies. The authors concluded that \u201cStablecoins, or certain parts of stablecoin arrangements, may be securities, commodities, and\/or derivatives,\u201d invoking the jurisdiction of the SEC and\/or CFTC accordingly.<\/p>\n<p>This language remains very similar to what the PWG used at the initial stages of exploring the stablecoin realm. For one, a December 2020 statement from the working group <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/home.treasury.gov\/system\/files\/136\/PWG-Stablecoin-Statement-12-23-2020-CLEAN.pdf\">said<\/a> that \u201cDepending on its design and other factors, a stablecoin may constitute a security, commodity, or derivative subject to the U.S. federal securities, commodity, and\/or derivatives laws.\u201d<\/p>\n<p>Furthermore, nothing in the language of the interagency report pointed to the SEC \u201ctaking the lead\u201d in supervising the stablecoin sector.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Waiting_for_Congress\"><\/span>Waiting for Congress<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>While the central message of the report is the recommendation for Congress to step in and pass relevant legislation as soon as possible, the framers of the document also expand on the way regulators should address stablecoin-induced risks before the legislature takes action.<\/p>\n<p>In addition to the SEC and CFTC, which are to continue applying their existing authorities to safeguard against the outlined prudential risks, the report calls on other relevant authorities \u2014 including the Department of Justice, Consumer Financial Protection Bureau (CFPB) and the Financial Crimes Enforcement Network (FinCEN) \u2014 to consider how existing laws could be applied to stablecoin activity in domains such as consumer protection, payments and money transmission services.<\/p>\n<p>Notably, the report also leaves it up to the Financial Stability Oversight Council (FSOC), a group of U.S. regulators that was created following the 2008 financial crisis, to designate some stablecoin activities \u2014 such as payment, clearing and settlement \u2014 as \u201csystemically important,\u201d which would trigger additional oversight. This is a scenario that crypto-friendly Senator Pat Toomey <a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.banking.senate.gov\/imo\/media\/doc\/toomey_letter_to_yellen_on_pwg_report.pdf\">warned against<\/a> in a recent letter to Treasury Secretary Janet Yellen.<\/p>\n<p>The designation of stablecoins as systemically important doesn\u2019t seem unfeasible, especially in the light of some regulators\u2019 statements in response to the report. For one, CFPB Director Rohit Chopra has<a rel=\"nofollow noopener\" target=\"_blank\" href=\"https:\/\/www.consumerfinance.gov\/about-us\/newsroom\/statement-cfpb-director-chopra-stablecoin-report\/\"> pledged<\/a> to engage with other members of the Financial Stability Oversight Council to determine whether to initiate designation proceedings for certain non-bank stablecoin-related activities or entities to be systemically important.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"In_for_a_long_wait\"><\/span>In for a long wait?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>The part of the intergroup report that concerns the distribution of regulatory responsibilities prior to (or absent) congressional action is especially relevant given that the legislature is not at all likely to act fast on the stablecoin matter. Gray commented to Cointelegraph:<\/p>\n<blockquote><p>\u201cAny significant action from Congress in this area is not expected in the short term, leaving the SEC and other agencies to occupy the space in the interim.\u201d<\/p><\/blockquote>\n<p>Powers further validated the point, adding that \u201cThe odds are great Congress fails to act with a comprehensive framework covering all kinds of digital assets.\u201d<\/p>\n<p>In the meantime, it remains to be seen how much actual regulatory activity the report will spark, given its non-binding nature.<\/p>\n<p><strong><em>Related:\u00a0Crypto lending firms on the hot seat: New regulations are coming?<\/em><\/strong><\/p>\n<p>Jackson Mueller, director of policy and government relations at digital asset firm Securrency, spoke to Cointelegraph shortly before the PWG report\u2019s publication, saying that he expected it to resemble a <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/watch-movies-tv-seriess\/\" data-internallinksmanager029f6b8e52c=\"8\" title=\"Watch Movies &amp; TV Series\" target=\"_blank\" rel=\"noopener\">series<\/a> of Treasury reports from several years ago responding to former President Donald Trump\u2019s executive order on core principles for regulating the U.S. financial system.<\/p>\n<p>Many of its recommendations, Mueller maintained, were \u201cquite vague or limited to simply encouraging regulators or Congress to continue their work on a particular matter.\u201d In the end, it was unclear \u201cjust how many of the recommendations proposed moved beyond the pages of those reports.\u201d<\/p>\n<p>While some of the PWG report\u2019s recommendations are also rather generic, at least one major implication \u2014 the potential acceleration of the FSOC designating some aspects of stablecoin activity as systemically important \u2014 could affect the sector in very tangible ways.<\/p>\n<p><template data-name=\"subscription_form\" data-type=\"law_decoded\"><\/template><\/div>\n<blockquote><p><strong><span style=\"color: #ff6600;\">If you liked the article, do not forget to share it with your friends. Follow us on\u00a0<span style=\"color: #ff0000;\"><a style=\"color: #ff0000;\" href=\"https:\/\/news.google.com\/publications\/CAAqBwgKMLG0nwswvr63Aw\" target=\"_blank\" rel=\"nofollow noopener noreferrer\">Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\">For forums sites go to <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/forum.buradabiliyorum.com\/\" target=\"_blank\" rel=\"noopener\">Forum.BuradaBiliyorum.Com<\/a><\/span><\/strong>\n<\/p><\/blockquote>\n<blockquote>\n<p style=\"text-align: center;\"><strong>If you want to read more <a href=\"https:\/\/buradabiliyorum.com\/en\/category\/news\/\" data-internallinksmanager029f6b8e52c=\"2\" title=\"News\" target=\"_blank\" rel=\"noopener\">News<\/a> articles, you can visit our <span style=\"color: #ff9900;\"><a style=\"color: #ff9900;\" href=\"https:\/\/en.buradabiliyorum.com\/general\/\" target=\"_blank\" rel=\"noopener\">General category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n<p><span style=\"color: black;\"><a style=\"color: #ff9900;\" href=\"https:\/\/cointelegraph.com\/news\/stablecoins-report-sec-won-t-lead-regulation-congress-urged-to-act\" target=\"_blank\" rel=\"noopener\">Source<\/a><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>&#8220;# Stablecoins report: SEC won\u2019t lead regulation, Congress urged to act &#8221; On Nov. 1, the United States President\u2019s Working Group on Financial Markets (PWG) released its long-anticipated report and policy recommendations on stablecoins. The document\u2019s main focus is on prudential risks that \u201cpayment stablecoins\u201d \u2014 or those meant to maintain a stable value against&#8230;<\/p>\n","protected":false},"author":1,"featured_media":362202,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"https:\/\/images.cointelegraph.com\/images\/1200_aHR0cHM6Ly9zMy5jb2ludGVsZWdyYXBoLmNvbS91cGxvYWRzLzIwMjEtMTEvOGQ1ZGQ4MjktMzc4MC00M2Q1LTljZTktMDFhZWEyYzlmOTRhLmpwZw==.jpg","fifu_image_alt":"","footnotes":""},"categories":[1],"tags":[74894,75493,74355,70934],"class_list":["post-362201","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-general","tag-blockchain","tag-stablecoin","tag-adoption","tag-regulation"],"_links":{"self":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/362201","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/comments?post=362201"}],"version-history":[{"count":0,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/posts\/362201\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media\/362202"}],"wp:attachment":[{"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/media?parent=362201"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/categories?post=362201"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/buradabiliyorum.com\/en\/wp-json\/wp\/v2\/tags?post=362201"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}