U.S. regulatory bodies have reportedly agreed that the Securities and Exchange Commission (SEC) will lead the United States’ efforts to regulate the stablecoin sector.
According to an Oct. 26 Bloomberg report citing anonymous sources “familiar with the matter,” the SEC has reached an agreement with other U.S. agencies to take the reins on proposing legislation and overseeing the stablecoin industry.
The sources add that the SEC’s newfound “significant authority” over the sector will be formally announced in the Treasury Department’s forthcoming stablecoin report that is scheduled to be published this week.
The Treasury’s report was announced during a meeting of The President’s Working Group for Financial Markets (PWG) in July, with the PWG stating its intention to explore creating a new type of banking charter for stablecoin issuers among other regulatory measures at the time.
The PWG comprises top representatives from top U.S. regulatory agencies, including Treasury Secretary Janet Yellen, SEC Chairman Gary Gensler, Federal Reserve Chairman Jerome Powell, and acting CFTC head Rostin Behnam.
Bloomberg’s sources claim that Gensler has been pushing for a further expansion in the SEC’s regulatory domain over stablecoins, including allowing the commission to pursue enforcement actions against issuers. Gensler also reportedly sought to clarify what powers the SEC has to oversee stablecoin-based investment transactions.
The report is also expected to call on Congress to enact similar regulations to those overseeing bank deposits for the stablecoin sector.
Last month, Gensler called on Congress to assist the SEC and CFTC in regulating stablecoins, with Gensler likening the dollar-pegged assets to “poker chips at the casino.”
The stablecoin market has seen significant growth in 2021, and the market capitalization of leading stablecoin issuer Tether (USDT) has exploded this year, with its market cap growing by 229% since the start of the year to sit at $69.5 billion.
Second-ranked USD Coin has also seen meteoric growth, with its capitalization growing 706% year to-date to tag $32.52 billion as of this writing.