US SEC Expected to Take Charge of Stablecoin Regulation and Enforcement in the US

U.S. regulators have reportedly unanimously agreed that the U.S. Securities and Exchange Commission (SEC) will lead the country’s oversight of the stablecoin industry.

According to a Bloomberg report on October 26, citing anonymous sources “familiar with the matter,” the US SEC has reached an agreement with other US agencies to be responsible for the legislation and regulation of the stablecoin industry.

The source added that the SEC’s newfound “significant authority” over the industry will be formally announced in the U.S. Treasury Department’s upcoming report on stablecoins, which is scheduled to be released this week.

The report will also clarify the regulatory purview of the Commodity Futures Trading Commission (CFTC) and the Treasury Department over stablecoins.

The U.S. Treasury Department’s report was announced at a July meeting of the President’s Working Group on Financial Markets (PWG), which said at the time that it intended to explore creating a new type of bank charter for stablecoin issuers, among other regulatory measures.

The PWG is made up of top representatives from top U.S. regulators, including U.S. Treasury Secretary Janet Yellen, U.S. SEC Chairman Gary Gensler, U.S. Federal Reserve Chairman Jerome Powell and CFTC Acting Chairman Rostin Behnam.

Gensler has been pushing the U.S. SEC to further expand its oversight of stablecoins, including allowing the commission to take enforcement action against issuers, Bloomberg sources said. Gensler is also reportedly trying to clarify the authority of the US SEC in regulating stablecoin-based investment transactions.

The report is also expected to call on Congress to create regulations for the stablecoin industry similar to overseeing bank deposits.

Last month, Gensler called on Congress to assist the U.S. SEC and CFTC in regulating stablecoins, likening the dollar-pegged asset to “poker chips in a casino.”

The stablecoin market has seen significant growth in 2021, with the market capitalization of leading stablecoin issuer Tether (USDT) exploding this year, with its market capitalization increasing 229% since the start of the year to $69.5 billion.

Second-ranked USD Coin has also seen meteoric growth, with its market capitalization up 706% year-to-date to $32.52 billion as of this writing.

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