Stablecoins – Stable In More Ways Than One!
We’ve all heard about crypto, but have you heard about stablecoins? If not, the CFTC (Commodity Futures Trading Commission) recently revealed that stablecoins fall under its jurisdiction – and for good reason.
What Are Stablecoins?
Stablecoins – like USDT or USDC – are digital (crypto) tokens that are ‘pegged’ to real world assets. This means they stay nice and stable; if the real-world asset they’re pegged to increases in value, so too does the corresponding stablecoin. That’s right – no worrying about wild market fluctuations with these guys!
What Did The CFTC Say?
The CFTC recently asserted that stablecoins are under their jurisdiction. Here are a few of the facets they highlighted:
- Regulatory Override – the CFTC reviewed the available legal frameworks and determined that stablecoins fall within their regulatory framework.
- Regulatory Priorities – the CFTC explained that their regulatory framework for stablecoins is based on trust in the technology, benchmarking against current laws, and a focus on consumer protections.
- Mitigating Risk – the CFTC emphasised the need to have robust Anti-Money Laundering (AML) and Know Your Customer (KYC) procedures to protect traders, consumers, and the underlying blockchain.
Why Is This Important?
The CFTC’s announcement is important for two reasons:
- It provides an element of comfort that stablecoins are subject to regulation and enforcement.
- It acts as a reminder that crypto markets aren’t able to escape regulation while working within the law.
By recognizing the importance of stablecoins, the CFTC has made it clear that they’re determined to keep the crypto market safe and accessible to all. Fingers crossed our role at CryptoTaxSlayer doesn’t become obsolete anytime soon (we’d miss the job perks!)!
