Analysis: Stablecoin regulatory crackdown sends warning to industry

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The U.S. Security and Exchange Commission's warning shot on Binance's stablecoin over whether or not it is a security could offer a hint at what type of dollar-pegged tokens may draw regulatory scrutiny, critical information for other digital asset firms offering a less volatile way to trade crypto.

While the crypto industry has criticized the SEC's broad industry crackdown, the move against Binance USD, the third-biggest stablecoin with about $16 billion in circulation, could lend some guidelines for which stablecoin activities may get scrutinized.he believes some stablecoins are in fact securities, which require registration and additional regulatory oversight.

Those incentives could be central to the SEC's thinking that the product is a security, experts said. Some argue stablecoins should be regulated because they track other assets like gold or the U.S. dollar, similar to an exchange-trade fund. Today, stablecoins operate under a wide range of policies under a patchwork of state regulations governing disclosures, what assets are held in reserve to back the coins and redemption rights.and subject them to strict supervision by banking regulators.

 

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