In reaction to the United States Securities and Exchange Commission (SEC) notice to Paxos, Prominent cryptocurrency exchange, Coinbase has maintained an opposing stand. In a thread of Twitter posts, the cryptocurrency exchange established that stablecoins are not securities.
According to the thread, Coinbase highlighted the importance of stablecoins. Also, Coinbase explained the uses of stablecoins and why it believed that they can’t be classified as securities. Further, the cryptocurrency exchange stated that stablecoins aid users in carrying out transactions in a fast and efficient manner. Illuminating the claim, Coinbase revealed that the value of fiat-pegged stablecoins is often stable, thus facilitating commerce faster.
Additonally, Coinbase argued that stablecoins offer greater benefits to businesses and their clients. The cryptocurrency exchange revealed customers through stablecoins enjoy an uninterrupted avenue of sending and receiving money. Coinbase divulged that with stablecoins customers can send money seamlessly against bank queues and geographical barriers.
The position of the cryptocurrency exchange came in reaction to the threat of a lawsuit against Paxos by the SEC. On Monday, the SEC hinted that it would launch a legal battle against Paxos for issuing an unregistered security. In its view, the regulator regarded Binance’s BUSD as a security, a claim which hasn’t seated well with many cryptocurrency enthusiasts.
Coinbase explains why the SEC’s move against stablecoin may backfire
The cryptocurrency exchange didn’t hold back to criticize the regulatory measures of the SEC. Coinbase said the SEC has been imposing securities regulation on the stablecoin, instead of providing guidelines that will aid the innovation’s growth. Therefore, the crypto exchange stated that the recent activity of the SEC against stablecoins will push the innovation offshore.
Also, the thread echoed the opinion of the cryptocurrency exchange on how stablecoins are cost-effective and how they help businesses to settle payments swiftly. Coinbase described how USD-pegged stablecoins aid users to hold the value without having a U.S bank account. More so, the firm registered its belief that the U.S. benefits more through USD stablecoins. Coinbase revealed that they (USD-pegged stablecoins) help to preserve the status of the USD as the most reliable and globally recognized fiat.
Coinbase opined that the use of threats of litigation without explanation and premise in existing regulations will pose more harm than good. According to the cryptocurrency exchange, the SEC must establish a dialogue with relevant bodies in the industry to design a prosperous way forward. Lastly, Coinbase stated that with such move, the vow of providing greater financial accessibility and efficiency will come to play.