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S.E.C.’s Gensler Doubles Down on the Need to Regulate Cryptocurrencies –

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The push comes as crypto’s biggest players seek to consolidate their dominance. Later this month, Binance, the world’s largest cryptocurrency exchange, will unilaterally convert some stablecoins that were issued to its customers by other companies into Binance-branded tokens. This is the kind of move that has lawmakers rushing to draft legislation for stablecoins, or cryptocurrencies ostensibly pegged to the value of a stable asset, like the dollar.

Under Binance’s conversion plan, a group of popular dollar stablecoins — which are primarily used to settle trades in the volatile digital asset space — will automatically convert to its BUSD brand. Stablecoins boomed last year and now account for about 15 percent, or $150 billion, of the crypto market’s total capitalization.

These assets, Mr. Gensler said on Thursday, have features similar to, and potentially competing with, money market funds, other securities and bank deposits,” and raise important policy issues. Recalling a report from regulators on the risks that come with stablecoins, he called for more restrictions.

Some crypto industry figures have stepped up their lobbying efforts amid a burst of legislative efforts in Congress. The House Financial Services Committee is working on a bipartisan stablecoin bill, which some industry executives said they would welcome. “We believe this is beneficial to both exchanges and users,” Patrick Hillman, Binance’s communications chief, told DealBook.

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