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Regulatory fears have gripped the Bitcoin and altcoin markets. The new rules may regulate stable altcoin projects similar to bank deposits. Cryptocoin. com, we have compiled the details for you, let’s examine the subject together…

  • A report from the US Treasury and other regulators could give the SEC new mandate over stablecoins.
  • Under pending regulations, stablecoins may face some of the rules that bank depositors currently face.
  • The SEC argues that stable altcoin projects pose risks despite their goal of maintaining a price steady state.

According to a report published by Bloomberg today, the US SEC may soon gain authority over stablecoins.

SEC wants to regulate these altcoin projects!

Sources from Bloomberg suggest that the U.S. Treasury and other government bodies will soon release a report giving the Securities and Exchange Commission new mandate over stablecoins. This policy will likely apply to centrally issued stablecoins such as Tether’s USDT stablecoin and Circle’s USD Coin, as well as altcoin projects such as Binance USD, TrueUSD and Pax Dollar.

Rules similar to those currently applied to bank deposits will require the company to obtain a license. This approach has received support from stablecoin companies such as Circle, which plans to become a commercial bank in the future. Until now, the SEC has primarily focused on regulating cryptocurrency projects that sell tokens with the promise of returns, especially companies that run ICOs or similar sales. Such assets are typically considered investment contracts under the Howey Test.

Why does the SEC want authority? What could be in the market?

At first glance, the SEC’s view does not seem to apply to stablecoins, which are designed to avoid price fluctuations and are therefore not suitable for high-yield investors. However, SEC Chairman Gary Gensler said that the regulator aims to dedollarize all altcoin projects that are in the stablecoin category, regardless of their inherent risks. Gary Gensler has previously compared stablecoins to “poker chips”. With this statement, he implied that both are easy transitions to risky investments.

Also, stablecoins are risky due to the possibility of falling prices. While no major stablecoin has experienced a complete collapse in value, minor price fluctuations occur regularly. According to experts, the ongoing discussions around Tether and Facebook’s upcoming Diem stablecoin have led the US government to grant new powers to the SEC as well.


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