Top US crypto exchange Coinbase is weighing in on the regulatory uncertainty swirling around stablecoins this week.
The issue is getting attention because New York-based crypto company Paxos said on Monday that it received a “Wells Notice” from the U.S. Securities and Exchange Commission (SEC) on February 3rd.
The regulator reportedly stated that it is considering recommending an action alleging that Paxos’ stablecoin, Binance USD (BUSD), is a security and should have been registered under federal securities laws.
Coinbase argues that stablecoins are not securities. The exchange also says it benefits the US if the dollar remains the most trusted reserve asset for stablecoins.
“We can only do this if we foster the development of stablecoins within our borders. Imposing securities law onto stablecoins through enforcement instead of guidance or dialogue with the industry will simply push innovation offshore and weaken our global role.
Remember, stablecoins are already regulated. Paxos is regulated as a NY Trust Company by [the New York Department of Financial Services]. USDC [USD Coin] is regulated as a stored value instrument, just the same as a simple money order is, under US state money transmitter laws.”
The New York Department of Financial Services (NYDFS) ordered Paxos to freeze production of BUSD on Monday.
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