Gensler asked Congress to give the CFTC more powers to regulate stablecoins.
Gary Gensler, the Securities and Exchange Commission Chairman, has called on the United States Congress to give the Commodity Futures and Trading Commission (CFTC) more powers to regulate stablecoins.
Speaking at a conference in Washington, as reported by Reuters today, Gensler said granting the SEC more powers to oversee stablecoins would help mitigate the risks the asset class poses to the United States financial system.
According to Gensler, stablecoins have become increasingly popular and have continued to grow. Stablecoins currently has a total market capitalization of $150 billion and are primarily used to facilitate the trading of other digital currencies like Bitcoin (BTC), Ethereum (ETH), Ripple (XRP), etc.
Gensler noted a need for adequate regulation of stablecoins because digital currencies are similar to money market funds. Currently, the CFTC already has anti-manipulation and anti-fraud authorities over stablecoin issuers. However, Gensler said the agency still does not have the powers to establish rules to govern the exchange and transfer of stablecoins.
“I think the CFTC could have greater authority. They currently do not have direct regulatory authorities over the underlying non-security tokens,” Gensler said.
Calls for Adequate Crypto Regulations
Following the collapse of Terra ecosystem tokens in May, several federal agencies have stressed the need for adequate regulation of the emerging market.
Earlier this month, the Financial Stability Oversight Council urged Congress to formulate legislation addressing the risks of crypto assets to the U.S. financial system.
Meanwhile, this is not the first time Gensler has thrown his weight behind CFTC to control a specific segment of the crypto market. Last month, TheCryptoBasic reported that Gensler said the U.S. Congress should give CFTC more power to regulate Bitcoin and other non-security tokens.
SEC Claims Control Over Crypto Regulations
For years, there has been a debate over which federal agency would be the appropriate regulator for cryptocurrency. Members of the crypto community favor the CFTC over SEC. However, the SEC considers itself the appropriate regulator for the industry and has continued its clampdown on various crypto projects that breach U.S. Security rules.
Gensler considers most crypto assets, including algorithmic stablecoins, as securities. However, he said only a “handful” of cryptocurrencies are not securities.
The SEC has already declared Bitcoin and stablecoin to be out of its regulatory purview, as it focuses on other cryptocurrencies like Ripple (XRP).