Stablecoins should be regulated as securities, says global trading regulator

IOSCO plans on adding stablecoins to existing securities policies

Stablecoins possess features of securities

The platform has been the subject of various controversies, and regulators across multiple nations are having problems with its regulation. Now, a report by Reuters suggests that Libra and other similar stablecoin projects can be regulated under existing policies. The International Organization of Securities Commissions (IOSCO) is considering adding them to existing securities policies.

The report noted that the agency had realized the benefits of stablecoin projects as well as the risks posed by such projects. Ashley Alder argued that after a thorough analysis of the asset, the agency noted that it possess features similar to typical securities.

He then added that due to this reason, it is much more efficient to govern stablecoin projects under securities law. The agency wants to regulate stablecoin operations such as disclosures, registrations, and data reporting in the same way as securities.

Problem with Libra, not stablecoins

Stablecoin projects have been in the shadows before Facebook bought them to the limelight with its announcement of Libra. Although some of these projects are still working with the same level of non-interference as crypto assets, Libra might be treated differently.

However, it does not mean that stablecoins are evil; tying an asset’s value to a very stable one such as fiat currency or other physical resources reduces asset volatility. The problem with Libra is that plans on operating on a very large-scale across numerous jurisdictions, some of which do not want it operating on their land. Countries such as India and China, have already banned the project while many others, such as France and Germany, are thinking about it.