The US Congress is reportedly looking to approve a draft bill, which will reclassify all managed stablecoins as investment contracts, and ultimately securities. 

Specifically, Sylvia Garcia – The U.S. Representative for Texas’s 29th congressional district – has proposed a draft bill to the House Financial Services Committee on October 18. The draft bill – dubbed ‘‘Stablecoins are Securities Act of 2019,” – requests the Securities Act of 1933 to be applied to all types of stablecoins. 

This new bill will be making amendments to the existing “statutory definitions” of how security is publicly viewed, by adding “managed stablecoins.” under it. 

The upcoming Facebook’s Libra stablecoin is reportedly the main reason behind the emergence of the draft bill. Numerous regulators throughout the world have joined in the debate revolving around stablecoins, Libra in particular, concerning its potential risks to the world’s current financial system. 

Mark Zuckerberg – Facebook founder, who will present himself before the U.S. Congress to testify on October 23rd – claimed that only when Libra has been fully authorized by the US lawmakers, will Libra be released on any level. 

Previously, it has been reported that the G7 members – a group of top 7 worldwide financially rich countries – will not authorize the launch of any stablecoin, unless relevant risks and challenges have been thoroughly analysed and dealt with.