US Lawmakers Want to Brand Libra a Security, Association Disagrees
Osato Avan-Nomayo's original article for cointelegraph.com reduced by 72%
Lawmakers sponsoring the bill say stablecoins should be classified as securities to protect U.S. consumers. If passed, stablecoin projects like Libra will potentially fall under the purview of stringent U.S.
securities regulations. U.S. lawmakers want "Managed stablecoins" classified as a securityAs previously reported by Cointelegraph, two Texas representatives - Lance Gooden and Sylvia Garcia - have proposed a piece of legislation that will classify stablecoins as securities.
Named as the "Managed Stablecoins are Securities Act of 2019," the bill, which is sponsored by representatives from both sides of the aisle, could place an even greater regulatory burden on stablecoin projects like Libra. The added compliance burden for Libra would be to such an extent that, as Ambrose remarked, "The bill may entirely prevent Libra from operating in the US," but the likelihood of such will depend on whether the association chooses to follow local regulations. Writing to Cointelegraph, DiPasquale declared that classifying Libra as a security would limit the flexibility of the project's operation in the U.S.A security token designation might not be the only worry for Libra in the U.S.: Earlier in November, Kenneth Blanco, director of the U.S.
Financial Crimes Enforcement Network, declared that businesses that conduct stablecoin transactions must register as money services businesses. "The legal basis to classify a cryptocurrency as a security is up to lawmakers and regulatory agencies, so if this bill passes, Congress is effectively creating the legal basis for the classification. It becomes irrelevant whether Libra is or is not a security under current law, because it would be classified as a security under the new law..
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