US Congress Examines Draft Stablecoin Bill While Facebook Will Not Launch Libra Until US Regulators Approve
The United States Congress has been considering drafting a bill that argues that all managed stablecoins must be treated as investment contracts and hence are securities.
Sylvia Garcia, the US Representative for Texas’ 29th congressional district, drafted a bill, “Stablecoins are Securities Act of 2019,” stating that stablecoins should be regulated under the Securities Act of 1933. The draft bill noted that “amending statutory definitions of the term security” would be needed to include “managed stablecoins.”
The draft bill emerged in a time where Facebook’s founder, Mark Zuckerberg, has been reportedly scheduled to testify before the US Congress this week.
Zuckerberg told lawmakers that Facebook would not “be a part of launching the Libra payments system anywhere in the world until US regulators approve.”
Zuckerberg mentioned that Libra would not be competing with sovereign currencies and that Libra Association will work with the Federal Reserve and central banks to ensure it does not interfere with monetary policies.
According to Zuckerberg’s prepared remarks released on Oct.22, Libra will be pegged mostly to US dollars. He further emphasized the importance of supporting innovation, stressing that Libra will help the US maintain its global position of financial leadership as China has plans to release a similar digital currency to Libra in the coming months.
Image via Shutterstock