The United States regulatory bodies have reportedly agreed that the U.S Securities and Exchange Commission (SEC) will lead the United States’ efforts to regulate the stablecoin sector.

This is according to a Bloomberg report which cites anonymous sources “familiar with the matter,” that the SEC has reached an agreement with other U.S. agencies to take charge on proposing legislation and overseeing the stablecoin industry.

The sources stated that the Treasury Department and other agencies will specify in a highly-anticipated report, expected to be published this week, that the SEC has significant authority over tokens like Tether.

What you should know

The report, according to sources will urge Congress to pass legislation specifying coins should be regulated similarly to bank deposits. It will also clarify the regulatory jurisdiction of the Commodity Futures Trading Commission (CFTC) and Treasury Department with regard to stablecoins.

Bloomberg’s sources claim that Gary Gensler, the SEC Chairman, has been pushing for a further expansion in the SEC’s regulatory domain over stablecoins, including allowing the commission to pursue enforcement actions against issuers. Gensler also reportedly sought to clarify what powers the SEC has to oversee stablecoin-based investment transactions.

The Treasury’s report was announced during a meeting of the President’s Working Group for Financial Markets (PWG) in July, with the PWG stating its intention to explore creating a new type of banking charter for stablecoin issuers among other regulatory measures at the time.

The PWG comprises top representatives from top U.S. regulatory agencies, including Treasury Secretary Janet Yellen, SEC Chairman Gary Gensler, Federal Reserve Chairman Jerome Powell, and acting CFTC head Rostin Behnam.

The report is also expected to call on Congress to enact similar regulations to those overseeing bank deposits for the stablecoin sector. Last month, Gensler called on Congress to assist the SEC and CFTC in regulating stablecoins, with Gensler likening the dollar-pegged assets to “poker chips at the casino.”

The total Stablecoin market capitalization currently stands at approximately $131 billion. The stablecoin market has seen significant growth in 2021, with USDT, USDC and BUSD leading the way. The market capitalization of leading stablecoin issuer Tether (USDT) has exploded this year, with its market cap growing by 229% since the start of the year to currently stand at $69.7 billion.

Second-ranked USD Coin has also seen meteoric growth, with its capitalization growing 706% year to-date to stand at $32.6 billion as of the time of this writing.