The U.S. government’s increased actions against the crypto industry recently. In a Twitter post, crypto exchange Coinbase addressed the Paxos-BUSD and Securities Exchange Commission (SEC) case and other essential items regarding the regulatory landscape for the industry.
For investors, the recent enforcement actions by the SEC raised concern in the crypto industry. These actions need clarity for the future digital assets in the U.S. jurisdiction for the various services exchanges to provide to users.
After the New York Department of Financial Services (NYDFS) ordered the US-based Paxos blockchain infrastructure to stop issuing the US dollar-backed stablecoin BUSD, Coinbase stated that these assets are not securities. Bitcoinist reported that the crypto exchange would take its case to court and fight for its staking products.
What Is The Role Of Stablecoin In Crypto
Stablecoins are cryptocurrencies whose value is pegged or tied to another commodity, currency, or financial institution; in this case, most stablecoins are used as a medium of exchange, are backed by the US dollar, and are designed to remain equal to the value of their peg.
Stablecoins are more valuable to crypto as a medium of exchange. These digital assets pursue price stability by maintaining reserve assets as collateral.
Coinbase states that for customers, stablecoins like USDC transcend banking hours and global borders, something centralized finance “needs to provide to investors.”
The use of crypto remittances has grown in recent years. According to Coinbase, nearly a quarter of US consumers reported using crypto. Coinbase states:
Stablecoins help bridge the gap from traditional finance to a more efficient and equitable financial system. As more global cash digitizes, the US will benefit enormously if USD remains the most trusted and used global reserve currency for fiat-backed stablecoins.
For this reason, stablecoins continue to come under regulatory scrutiny, given the growth these digital assets have experienced in recent years, with over $136 billion in the crypto market at press time, according to data compiled by DeFillama.
Coinbase notes that stablecoins are already regulated. Paxos, which has been scrutinized by the SEC, is regulated as a New York trust company by the NYDFS. USDC is regulated as a stored value instrument.
For Coinbase, getting this right means a “genuine dialogue” between regulators and the crypto industry that can lead to clear rules for the crypto space and lanes for the various regulators themselves.
This can ensure the promise of greater financial accessibility and efficiency and allow for more innovation and development for assets like stablecoins that can provide solutions for many crypto users in the U.S. Coinbase concludes:
Coinbase welcomes dialogue with regulators, policymakers, and the public on the best way to regulate our industry, including stablecoins.
COIN stocks have positively reacted despite the undesirable inflation data released on February 14th. COIN is trading at $64.25 on the Nasdaq, representing a gain of 5.5% in the last 24 hours, continuing its uptrend since the beginning of 2023.
Featured image from Unsplash, chart from Trading View.