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US regulators’ attention has been focusing on stablecoins for some time. The regulatory attention grew when the President’s Working Group on Financial Markets issued a report that called for the restriction of the stablecoin issuance.
There have been a lot of comments, including disagreements and agreements, on crypto and crypto exchanges regulation. At the same time, many prominent names like SEC Chair Gary Gensler and SEC Commissioner Hester Maria Peirce, who is known as crypto mom thanks to her continuous comments on cryptocurrencies.
Since Gensler became the chairman of the Commission, the executive has always shown concern over crypto and crypto exchanges regulation. He always calls for wider SEC authority on crypto platforms.
Gary Gensler on Crypto and Crypto Exchange Regulation
This time, Gensler touched on the topic of crypto regulation while speaking at the University of Pennsylvania Carey Law School on April 4th. He mentioned how centralized crypto trading platforms take hold of customers’ assets. According to the chairman, over $14 billion of value was stolen in 2021. Gensler revealed that he had asked SEC staff how they could work together with the Commodity Futures Trading Commission. He desires that the agencies on the registration and regulation of crypto platforms ensure the protection of customers’ assets.
While the SEC deals with the regulation of securities, such as investment products like shares and bonds, the CFTC regulates commodity futures. According to FTX US CEO Brett Harrison, the fact that assets are not explicitly defined is what makes crypto understanding. The CEO insists on pushing a” clear registration process for tokens” for security reasons. He said:
“I think a lot of token products out there would happily register with the SEC or the CFTC or both or neither if they knew that would get them on to exchanges in a licensed, regulated way. The problem is there’s not a clear path right now.”
Further, in the speech, Gensler noted his concerns about stablecoins. He noted:
“The three largest stablecoins were created by trading or lending platforms themselves, and US retail investors have no direct right of redemption for the two largest stablecoins by market capitalization. There are conflicts of interest and market integrity questions that would benefit from more oversight.”
Regulators Focus on Stablecoins
US regulators’ attention has been focusing on stablecoins for some time. The regulatory attention grew when the President’s Working Group on Financial Markets issued a report that called for the restriction of the stablecoin issuance. Particularly, Tether’s USDT has experienced scrutiny from authorities.
Last March, POTUS Joe Biden placed an executive order with the aim of protecting consumers. The order instructs the SEC, the CFTC, and the other agencies to work on reporting on ways to straighten market integrity and also protect consumers.