US lawmakers have proposed a bill to regulate stablecoins as securities. The proposed bill could place a greater regulatory burden on stablecoin projects such as Libra. Both the Texas representatives Lance Gooden and Sylvia Garcia had proposed legislation called “Managed Stablecoins and Securities Act of 2019” earlier in October of this year.
“The legislation clarifies the statute to remove ambiguity.”
As reported by The Hill, lawmaker Sylvia Garcia said that managed stablecoins such as the proposed Libra, are clearly securities under existing law. She added that this legislation simply clarifies the statute to remove any ambiguity. Representative Gooden also argued that the US should take the lead role in shaping the legal landscape for cryptos and the digital space at large. The proposed bill will allow the US SEC to have more control on the cryptocurrency industry.
More trouble for Facebook’s Libra
Facebook’s stablecoin project Libra is pegged with multiple fiat currencies. But Facebook has denied that Libra is security. If the proposed bill becomes the law, the trouble for Libra will increase as the regulations on the cryptocurrency would become more strict. Currently, there is no law specifying whether a cryptocurrency is a security or a property.
Earlier, several investors of Ripple had filed a case against the company for allegedly selling unregistered securities. The case is currently in court.