US Wants to Put Regulations on Stablecoins First
Circle, a primary maker of the USDC stablecoin, is under scrutiny by the United States Securities and Exchanges Commission. Danny Nelson from CoinDesk recently broke the story and it has left the crypto community perplexed. Now that the United States Securities and Exchanges Commission is investigating Circle, the fear of regulations on stablecoins is rising.
What has left many crypto enthusiasts perplexed is the fact that stablecoins are now safer than ever. The USD Coin, or USDC, is pegged against the dollar in fiat value. Every USDC is backed by $1. Jeremy Allaire and Sean Neville launched the USDC in 2018.
The investigation is in line with the United States Securities and Exchanges Commission’s relentless attack on stablecoins. Chairperson Gary Gensler has been all over the news for his comments on stablecoins. According to him, stablecoins are equivalent to poker chips and if not brought under regulations, they can wreak havoc on the economic landscape. In this context, it is not much of a surprise that the SEC is looking into it with the aim of levying regulations.
Circle operates with the same licenses as that of Paypal and Square. It is confusing to many that stablecoins are put to intensive scrutiny. While financial experts around the world agree that the sector has the potential to become organized and institutional, the SEC might have other plans. Circle is the leading platform for stablecoins in the United States. If stricter regulations are imposed on it, it will have a negative impact on the market. Crypto experts are now waiting to see how the investigation unfolds and whether it reveals anything about Circle that we do not know yet.