Why are stable coins free from SEC ?

[panganib999]

Have anyone wonder why stable coins are safe all this while from Gensler and SEC, even the government? Why hasn't there any hunt on those centralized stablecoins? Is there something we don't know? Are stable coins somehow settled with the government and SEC behind the curtain?

Because if stable coins was target it will be a enormous hit to the whole crypto market, why haven't such thing happened yet? I also read where the former Binance.US said that the White House is trying to keep stable coins "out of discussions" like they know something.

Is this all about saving their USD? Or they are waiting to create CBDC successfully first before they go after stable coins?

Stablecoins are backed by fiat currencies and are therefore in a sense not securities/speculative assets. They are called stable for a reason.

This fact alone is a great cause as to why the SEC’s not pushing to boycott the whole stablecoin market. For one it’s the mirror of reflection from the inside, allowing SEC to assume control over the little autonomy they have within the industry. Another is the fact that it would just be a massive bummer for everyone involved if they were to ban crypto, and with them trying to paint the picture that they aren’t cryptohaters. This wouldn’t sit well in tve PR

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[Gyfts]

It's great that others have mentioned a lot of cases where the SEC expressed their negative attitude toward various stable coins. I want to focus on another matter. The SEC is pretty consistent on what fall under their regulations: securities or something very similar to securities. But here we hit a weird spot because the SEC seems to believe that stablecoins are close enough to securities that they should be registered as such. On the other hand, some argue that since there's no expectation of profiting when it comes to stablecoins, they aren't securities and thus shouldn't be under the SEC.
In any case, it seems that the op is wrong in assuming that stable coins are free from the SEC, at least if the SEC's position on the matter counts.

The SEC's case against Binance, among other violations, was that they didn't register BUSD. Stablecoins aren't immune from government crackdowns but realistically, Bitcoin represents a greater threat to these government agencies than any asset backed coin. The government has the means to seize assets and render stablecoins useless. They obviously don't have this power with Bitcoin.

[Ozero]

Not all stablecoins are safe but of course stablecoins that are accepted by the US government and the SEC will remain safe as they promote centralization and government control.

Recently PayPal launched its own stablecoin and it has a lot of support from the US government because PayPal is fully subject to US regulatory laws regarding KYC, AML is fully dollar backed of course this will enhance the dominance of the dollar around the world thanks to the widespread services of PayPal around the world.

Control is what the United States seeks, and it does not matter if this happens through the paper dollar or the digital dollar.

This is about what I wanted to say. Dollar-backed stablecoins are generally beneficial to the US as a nation. For the amount of stablecoins issued into circulation, the cash mass of paper dollars should be withdrawn from circulation. On the one hand, interest and demand for the dollar is growing, even if it is digital, and on the other hand, inflation in the United States is decreasing, as the amount of cash is decreasing.

But in any case, there will be control over private and commercial stablecoins. States are just not in a hurry right now. They will take appropriate action when the right conditions are ripe for it.

[Argoo]

Have anyone wonder why stable coins are safe all this while from Gensler and SEC, even the government? Why hasn't there any hunt on those centralized stablecoins? Is there something we don't know? Are stable coins somehow settled with the government and SEC behind the curtain?

Because if stable coins was target it will be a enormous hit to the whole crypto market, why haven't such thing happened yet? I also read where the former Binance.US said that the White House is trying to keep stable coins "out of discussions" like they know something.

Is this all about saving their USD? Or they are waiting to create CBDC successfully first before they go after stable coins?

Governments are simply not jumping to conclusions about various private and commercial stablecoins just yet. But this does not mean that after some time they will not be attacked by them. Stablecoins are essentially the digital currency of the same states whose national money is used by stablecoins as their collateral. For now, governments are busy issuing their own CBDCs, and they will presumably compete with the current decentralized and not-so-decentralized stablecoins. Therefore, governments will collect various facts of abuse in the field of implementation of these stablecoins and begin to gradually restrict their circulation. How this will end is hard to say. This will be influenced by many factors that, from the current position, may or may not occur.

[Tony116]

Not all stablecoins are safe but of course stablecoins that are accepted by the US government and the SEC will remain safe as they promote centralization and government control.

Recently PayPal launched its own stablecoin and it has a lot of support from the US government because PayPal is fully subject to US regulatory laws regarding KYC, AML is fully dollar backed of course this will enhance the dominance of the dollar around the world thanks to the widespread services of PayPal around the world.

Control is what the United States seeks, and it does not matter if this happens through the paper dollar or the digital dollar.

This is about what I wanted to say. Dollar-backed stablecoins are generally beneficial to the US as a nation. For the amount of stablecoins issued into circulation, the cash mass of paper dollars should be withdrawn from circulation. On the one hand, interest and demand for the dollar is growing, even if it is digital, and on the other hand, inflation in the United States is decreasing, as the amount of cash is decreasing.

But in any case, there will be control over private and commercial stablecoins. States are just not in a hurry right now. They will take appropriate action when the right conditions are ripe for it.

According to your explanation, stablecoins are benefiting the US government and the USD. So can you explain to me why they are trying to destroy Binance's BUSD? According to the latest announcement, BUSD will be completely phased out in February 2024. BUSD used to be the 3rd largest stablecoin by market capitalization after USDT and USDC. I think the fact that the SEC or the government hasn't attacked stablecoins yet is because the timing is not right. They will probably find a way to destroy it when their CBDC is released, IMO.

[Bebe22]

Stable coins, such as Tether (USDT) or USD Coin (USDC), are designed to maintain a stable value tied to a specific asset, usually a fiat currency like the U.S. dollar. These stable coins strive to provide stability and eliminate the volatility commonly associated with other cryptocurrencies like Bitcoin or Ethereum.

While stable coins may not be exempt from regulation, they are often seen as less likely to fall under the regulatory purview of the SEC when compared to other types of cryptocurrencies. This is because stable coins backed by fiat currency are typically considered as a digital representation of the underlying asset.

No stable coins are typically made by the government.
While stable coins are not directly issued by governments, some projects may collaborate with financial institutions and follow regulatory guidelines. For example, USDC (USD Coin) is a stable coin co-founded by Coinbase and Circle, which follows a regulated framework and maintains transparency in its operations. Tether (USDT) is another popular stable coin that aims to maintain a 1:1 ratio with the U.S. dollar, but it has faced scrutiny regarding its financial backing.

[NotATether]

The SEC's case against Binance, among other violations, was that they didn't register BUSD. Stablecoins aren't immune from government crackdowns but realistically, Bitcoin represents a greater threat to these government agencies than any asset backed coin. The government has the means to seize assets and render stablecoins useless. They obviously don't have this power with Bitcoin.

It's not just BUSD they are after, it's algorithmic stablecoins like Terra's UST they were fierce about stopping too.

This kind of stablecoin is what caused the whole crypto crash of 2022 in the first place and had no regulatory checks and balances to stop it from being unpegged, so that was very dangerous. Well the feds learned their lesson and banned algorithmic stablecoins in the USA.

Tether is another one I'm mistrustful about, because it's not 1:1 backed, so all shit will go loose again if any shady accounting is discovered.

[Unbunplease]

It all depends on who is the issuer of the stable coins. The SEC can only affect what is in the jurisdiction of the United States. Also, the SEC needs to prove that a particular stablecoin is a security, and that is not easy to do. Therefore, most stablecoins are not subject to SEC oversight.

[STT]

SEC would mostly be regulating securities law, the idea of for profit investment schemes.  I dont know the legal definitions and how they view each blockchain but some companies especially the centralized ones willl work with government to stay in the clear.   The stable coin idea is a myth imo but they arent alone, many things completely recommended and regulated can fall apart despite ticking all the boxes they arent able to stay balanced.  The economy is not a government invention any more then the tide on the shore line does whats its told to any degree.

jurisdiction of the United States.

The dollar is global which can make that idea confusing because it could be most of the world is cast in that shadow, if only because trading partners dont want to be out of step on banking regulations I suppose.

[armanda90]

Not all stable coins as save or free from SEC Commission, did you see latest news with BUSD as Binance stable coins must removed on their pair trading after losing against SEC. Actually only USDT as United State fiat are securing from SEC investigation and they won't have any new stable coins with difference name. SEC Commission is not good impact for cryptocurrency and not all stable coins are save from their investigating except with USDT, for securing your stable coins assets with long term holding USDT is the best option and until longer time not any investigate from  SEC Commission and keep secure as investment assets in the future.

I don't sure until how long investigate did by  SEC to all cryptocurrency coins except they have special coins without investigating yet USDT, but if have another popular new stable coins in the future actually will not secure from SEC.

[Silberman]

According to your explanation, stablecoins are benefiting the US government and the USD. So can you explain to me why they are trying to destroy Binance's BUSD? According to the latest announcement, BUSD will be completely phased out in February 2024. BUSD used to be the 3rd largest stablecoin by market capitalization after USDT and USDC. I think the fact that the SEC or the government hasn't attacked stablecoins yet is because the timing is not right. They will probably find a way to destroy it when their CBDC is released, IMO.

Exactly, it is not as if the US government is protecting stable coins, and it should be obvious that it is the opposite, due to the existence of stable coins governments around the world lost the ability to more easily track the activities of the market participants, as if those coins did not existed then you will need to sell for fiat and receive an incoming transaction to your bank account, and then you could be subjected to all kind of questions about the source of your funds, so we can be sure that an attack on all stable coins is coming, we just do not know when it will happen.

[tjtonmoy]

Maybe because they haven't found any perfect replacement for it. Or the fact that they are making profits from those. Another thing that comes to my mind is, they don't need to. As those stablecoins are pegged to the US Dollar, the government can easily manipulate the market by just manipulating the actual USD. Unless they see any potential threat, they will hold on to this and lurk in the shadow. When the time is right or wrong based on what may happen, they will make their move.

As long as they are in control of anything, they will never change that or go after that. So the whole thing to me is all about the power to control. I'm not sure tho. But to me this looks like a valid reason to hold the operation.

[Bananington]

I do think the stable coins are more centralized and haslve probably bowed to the SEC regulation, that's why it may seem free from SEC. I can bet if there were to be any issue arising from a stable coin becoming non-existent suddenly after scamming customers of their coins, that the SEC will become quiet about it.
The name is stable coins as it is, why should the SEC even bother about charging much when it is more about gaining customers that would adopt a rather controlled centralized network.

[Fuso.hp]

A stablecoin is never discussed or criticized as much as Bitcoin. Even if a country bans cryptocurrencies, in most cases Bitcoin-centric measures are taken. The positive thing about stablecoins is that the value of these stablecoins does not increase or decrease due to which people never invest in these stablecoins and users only convert their money into stablecoins for their own needs, this is probably the only difference with Bitcoin. 

Along with the stable coin, due to which different countries do not discuss much about this stable coin. Crypto exchanges are allowed in most countries but I don't understand why Bitcoin is not allowed. Every exchange has the benefit of selling bitcoins, in the case that every exchange has such benefits, then people of a country can easily buy and sell bitcoins by having an account in that exchange, then why not directly allow bitcoins in all countries.

[Unbunplease]

A stablecoin is never discussed or criticized as much as Bitcoin. Even if a country bans cryptocurrencies, in most cases Bitcoin-centric measures are taken. The positive thing about stablecoins is that the value of these stablecoins does not increase or decrease due to which people never invest in these stablecoins and users only convert their money into stablecoins for their own needs, this is probably the only difference with Bitcoin. 

Along with the stable coin, due to which different countries do not discuss much about this stable coin. Crypto exchanges are allowed in most countries but I don't understand why Bitcoin is not allowed. Every exchange has the benefit of selling bitcoins, in the case that every exchange has such benefits, then people of a country can easily buy and sell bitcoins by having an account in that exchange, then why not directly allow bitcoins in all countries.

The most important thing is the algorithm behind the stablecoins and the provision of stablecoins. Many people remember the cases when steiblcoins were decoupled from the dollar (in the case of USTC there was a complete collapse). That's why we need an audit of steiblcoins to understand how much they can be trusted

[DrBeer]

It all depends on who is the issuer of the stable coins. The SEC can only affect what is in the jurisdiction of the United States. Also, the SEC needs to prove that a particular stablecoin is a security, and that is not easy to do. Therefore, most stablecoins are not subject to SEC oversight.

I could be wrong, but according to me most of the classic stablecoins are not, according to the SEC, not securities subject to SEC regulations and claims ? The issue with Binance is more global, and BUSD is more of a "side claim" to the main issues, as BUSD is involved in schemes that Binance does that violate SEC regulations.

[Casdinyard]

In a sense they are backed by fiat, which at the same time are currencies they are able to control. For that matter, since they can regulate the parent currency and pretty much control the stable coin they can basically control the stablecoin, which means they don't need to ban it for that matter. At the end of the day, stablecoins besides supporting the staking community of the cryptocurrency world and at the same time those p2p peeps, they don't hold that much bearing after all. What we should be worried about is the fact that they are not allowing altcoins to flourish which is arguably more important than stablecoins itself. If this keeps up this will literally kill cryptocurrencies in the US, regardless if bitcoin is allowed in it or not.

[OcTradism]

In a sense they are backed by fiat, which at the same time are currencies they are able to control. For that matter, since they can regulate the parent currency and pretty much control the stable coin they can basically control the stablecoin, which means they don't need to ban it for that matter.

They are altcoins and centralized by companies create those stable coins. They are not safe from SEC. regulations and we soon will see more regulations on stable coins especially after the fiasco of Terra and UST stable coin depeg months ago in May 2022.

Hearing Entitled: Understanding Stablecoins’ Role in Payments and the Need for Legislation. It was hosted in April 2023 but more events like this on stable coins will be hosted in future.

Stable coins are very risky especially small stable coins which were abundantly created in the last two to three years. They are not strong like Tether USD (USDT) and their treasuries are unknown that cause big risk of depeg when some attacks executed against their stable coins.

I don't believe governments will ban stable coins but they will regulate it more by some reasons. First to do their taxation better and second to derail citizen interest on stable coin and attract them to CBDCs.

[bayu7adi]

Regarding the issue concerning stablecoins and governments, I believe that following the Terra and Luna cases, governments have begun to tighten their oversight of stablecoins. Countries like the United States have enacted regulations such as the "Toomey Introduces Legislation to Guide Future Stablecoin Regulation" to exercise more control. In my opinion, their surveillance remains in place, but for whose benefit, I am uncertain.

I don't believe governments will ban stable coins but they will regulate it more by some reasons. First to do their taxation better and second to derail citizen interest on stable coin and attract them to CBDCs.

The plausible rationale being discussed behind the scenes is as follows: The relationship between stablecoins and central bank digital currencies (CBDCs) could be developing without public knowledge. Stablecoins themselves are centralized assets, making them susceptible to regulatory influence.

[BitcoinTurk]

Although stable cryptocurrencies are also classified as cryptocurrency there is no serious regulation for these cryptocurrencies since they are a fully centralized structure and their counterpart is held as a reserve.

The fact that there are reserves depending on the supply amount and that these reserves are not disclosed transparently, of course, causes us to consider these cryptocurrencies as a little risky. However, since they are controlled by a central institution and their prices are fixed they can be exempt from many regulations and regulations.