Int'l Regulator: Stablecoin 'Structure' Determines If It's a Security

International securities regulator International Organization of Securities Commission suggested that some stablecoin implementations are securities.

In a statement released on Nov. 4, IOSCO informed the public that on Oct. 30 its board met to - among other purposes - discuss stablecoins and the potential application of securities market regulations.

The regulator notes that it studied numerous stablecoins over the course of 2019 and acknowledges their potential benefits for market participants, investors and consumers.

IOSCO also warns that stablecoins pose potential risks in the areas of consumer protection, market integrity, transparency, conflicts of interest, financial crime and potential systemic risk.

The regulator's FinTech network - established in May last year to facilitate feedback exchange - also produced an assessment for the board on how IOSCO's security regulation standards may apply to stablecoins.

IOSCO says that detailed knowledge of how a given stablecoin operates is required to understand how it can be regulated.

IOSCO's board chair Ashley Alder added that stablecoins can have features typical of regulated securities.

As Cointelegraph reported at the end of October, stablecoins are currently seeing increasing adoption with Ethereum-based DAI now being spendable where VISA cards are accepted, leading stablecoin Tether seeing increasing use by e-commerce organizations as well as Facebook spearheading the Libra stablecoin project.

According to the stablecoin index provided by cryptocurrency market analysis firm Messari, Tether still dwarfs its competitors with a market capitalization that recently hit a record $5 billion.

The entire stablecoin market has roughly tripled since early 2018 - when Bitcoin price hit its all-time high.