Stablecoins: the decline of the authority of the SEC?

For a while now, the Securities and Exchange Commission (SEC) has been experiencing the same setbacks it is inflicting on the crypto industry. Its initiatives to regulate this sector are questioned on all sides. Within politicians, some want to limit or even remove all regulatory power in this crypto market.

Decrease the SEC in favor of federal banking regulators

The noose is tightening more and more around the SEC. Its efforts to regulate the stablecoin market are not only disputed. Some have made it their mission to block the veto it exercises over the crypto market.

This is the case of the Republicans in the House of Representatives. According to recent information, these parliamentarians have introduced a bill which could counter SEC regulatory actions. The initiative launched on Monday April 24 particularly targets the stablecoin market. It aims to deprive the American stock market policeman of all power to regulate this market.

The fact that we got there is no coincidence. The situation is mainly explained by the feeling of weariness of the representatives, faced with the inconsistency of the regulation of this segment.

However, the events surrounding the BUSD stablecoin are believed to have been the straw that broke the camel’s back. Indeed, the recently opened investigation against the stakeholders of this crypto (Binance/Paxos) went badly with the representatives.

Some like French Hill from Arkansas said last week that they had been “disappointed with the SEC’s approach to digital assets, especially stablecoins, but also other aspects, as it does not provide clarity.”

For those, it is clear that the SEC and its leader Gary Gensler are no longer in control. Those that might be, however, are federal and state regulators, banks and credit unions.

Because, if this measure passed, it is ultimately the latter who will have the right to decide on the regulation of the stablecoin market. The rules envisaged on the latter in the new bill also seem very general.

For example, they focus on stablecoins used for payments. This, while being complementary to the legislation on the crypto market, envisaged in the United States. It is certain that in the event of adoption, the crypto industry should be rubbing its hands.

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