As the former chairman of the US Commodity Futures Trading Commission (CFTC), Gary Gensler, said, the stable Libra is a security that must be regulated by the SEC.
Gary Gensler noted that Libra is a stablebcoin, which will be tied to a whole basket of various assets and fiat currencies. Libra members will receive special investment tokens, which, according to the company, are securities. The income from the asset basket will be transferred to the holders of these tokens.
“The Libra reserve is essentially a collective investment instrument and should, at a minimum, be regulated by the US Securities and Exchange Commission (SEC), and the association itself must register as an investment consultant,” the former CFTC chairman said.
According to Gensler, the stable Libra should be considered a security for the same reason as the investment token, as it is part of the same investment instrument, and therefore subject to the same market risks. Gensler believes that any holder of the stablebcoin will be a “second-class investor” in the Libra reserve basket.
In addition, according to Gensler, Libra may also fall under banking regulation, since steablecoin can be defined as a “private form of money” used for payments, savings and lending.
Note that today Gary Gensler should take part in the hearing of the Financial Services Committee of the US House of Representatives about the Libra cryptocurrency.