The American publicly listed digital currency trading platform Coinbase Global Inc has advocated for more proactive and effective regulation in the digital currency ecosystem.
The trading platform has taken to its official Twitter handle to express its displeasure (1) with how the United States SEC is approaching the regulation of significant players in the cryptocurrency market.
The investigation into Paxos Trust, the issuer of the Binance USD (BUSD) stablecoin, has resulted in a crackdown, according to Coinbase, which generates a negative uncertainty that is not good for the industry.
Coinbase has stated that it is confident stablecoins do not fall under the category of securities, even though it is unclear to it whatever component of the BUSD supply the SEC is concerned about.
The Securities and Exchange Commission served Paxos with a Wells notice. We cannot speculate which features of BUSD may pique the interest of the SEC. In the tweet, Coinbase stated that stablecoins are not securities.
Coinbase, a significant partner in the Center Consortium, and Circle, the company responsible for the USD Coin (USDC), presented their findings regarding the stablecoin and how it does not meet the requirements for security.
The trading platform brought to everyone's attention that the token is issued and backed on a one-to-one basis with dollars from the United States.
According to Coinbase, the reserves for the USDC, like the reserves for all other assets, are based on physical cash, Treasury Bills, and other cash equivalent funds that make up the full worth currently available.
Coinbase has guaranteed that there is always a cash equivalent support for every USD Coin that is out there in circulation.
The trading platform offers presumptions that imply that the acceptance of the USDC coin is pushed by the openness derived from revelations of its reserve support, just like the growth of other stablecoins is driven by the openness drawn from other stablecoins.
In Favour of Stablecoins
Coinbase, arguing in favor of the characteristics of stablecoins. According to the exchange, they discover enormous benefits in avoiding the inefficiencies common in traditional banking. The trading platform also emphasized how retailers can benefit greatly from stablecoins like USDC by using them to settle transactions more quickly.
Why should you use a stablecoin such as USDC? Stablecoins, whose value is fixed to a fiat currency, maintain their value over time. The digital qualities that give them their worth also make them speedier, more efficient, and more accessible to conduct business.
The argument put out by Coinbase is that the label of "security" should not be applied to stablecoins because they are not utilized for making financial investments. In keeping with what it has always done, the company pushed for an approach to industry regulation that places a greater emphasis on discussion.
The exchange urges the SEC to play a more active role in the ecosystem by guiding its most important participants and wants the SEC to do so. The exchange is concerned that if this is not done, it may be to the detriment of customers and the economy as a whole in the United States.