The Group of Seven (G7), an international intergovernmental economic organization comprised of seven of the largest economies in the world, recently published a report that discusses potential risks and benefits associated with global "stablecoins." The report notes that stablecoins have the potential to provide access to financial services to unbanked populations and to improve cross-border retail payments but are associated with potentially crippling risks as well, including the potential to destabilize the global economy and facilitate money laundering and terrorism. The report cites the need for a "well founded, clear and transparent legal basis in all relevant jurisdictions" to support mass adoption of global stablecoins. The Financial Action Task Force (FATF), an inter-governmental body established to set standards to protect the integrity of the global financial system, recently issued a press release highlighting the money laundering risks of stablecoins as well. In addition, a bill titled "Stablecoins are Securities Act of 2019" is now under review by Congress. The bill seeks to define "managed stablecoins" as securities within the Securities Act of 1933.
In other regulatory news, the U.S. Commodity Futures Trading Commission (CFTC) Chairman, Heath Tarbert, recently said cryptocurrency assets classified as securities have the potential to become commodities, and vice versa. Meanwhile, the Chief Counsel for the Internal Revenue Service (IRS) confirmed that the agency plans to release additional guidance to clarify unanswered questions related to cryptocurrency. The attorney stated that the agency's main concern is one of compliance, with too few cryptocurrency investors reporting cryptocurrency transactions on their taxes.
Finally, an anticipated hearing between the SEC and Telegram, a global messaging platform, related to whether the messaging platform's pending GRAM token launch is a securities offering, has been postponed until February. According to reports, as a result, Telegram will delay the launch of its TON blockchain network.
For more information, please refer to the following links:
- G7 & Bank for International Settlements: Investigating the impact of global stablecoins
- FATF: Money laundering risks from "stablecoins" and other emerging assets
- Draft Bill: To add establish the treatment of managed stable coins under the securities laws, and for other purposes.
- CFTC CHAIRMAN: CRYPTOASSETS OTHER THAN BTC AND ETH CAN BECOME COMMODITIES
- Crypto Compliance Guidance In The Works, Top IRS Atty Says
- EY: IFRS Holdings of cryptocurrencies
- SEC's Court Hearing on Telegram Token Delayed Till Next Year
- SEC, Telegram Agree To Delay $1.7B Token Delivery To Feb.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
We operate a free-to-view policy, asking only that you register in order to read all of our content. Please login or register to view the rest of this article.