Algorithmic stablecoins are subject to SEC jurisdiction

SEC's Gary Gensler said CFTC authority over stablecoins should be tightened.

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With around $150 billion in market capitalisation, stablecoins have many similarities to money market funds.

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Also, CFTC should get more powers to police cryptocurrency stablecoins to reduce risks to the financial system.

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He added “the vast majority of cryptocurrencies, including so-called algorithmic stablecoins, are securities, and fall under the SEC's authority, while a handful is not”.

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A stablecoin is a cryptocurrency whose value is tied to the value of another currency, commodity, or financial instrument.

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Stablecoins seek price stability either by holding reserve assets as collateral or through algorithmic formulas designed to control supply.

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Several bills have been introduced to regulate stablecoins, but it remains unclear when Congress will pass crypto-related legislation.

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