On April 9th, COINOTAG reported on a developing situation regarding the classification of stablecoins, as highlighted by TD Cowen’s recent findings. Caroline Crenshaw, a Commissioner at the U.S. Securities and Exchange Commission (SEC), has voiced her opposition to the notion of treating stablecoins as “non-securities.” This stance may introduce significant hurdles for impending stablecoin regulatory frameworks.
Crenshaw articulated her concerns by accusing the SEC of misjudging the risks associated with stablecoins, pointing to serious legal and factual shortcomings in the institution’s earlier conclusions. The SEC had previously asserted that stablecoins backed by reserves which can be readily redeemed should not be classified as securities.
Moreover, Crenshaw warned about the potential risks to investors, as intermediaries might not guarantee a 1:1 dollar redemption. The ongoing debate within Congress over various regulatory proposals may also be impacted by this internal SEC division, especially at the Senate level where bipartisan support is crucial. Maxine Waters, the Democratic chair of the House Financial Services Committee, has further expressed alarm regarding former President Trump’s potential influence on cryptocurrency legislation, underlining that regulatory decisions could facilitate stablecoin issuance by prominent entrepreneurs.