FinCEN Director Talks on Stablecoins in New York Conference

Director Kenneth Blanco has said that the United States Financial Crimes Enforcement Network (FinCEN) sees all stablecoins, including Tether, as falling under their remit in order to protect “money transmission services”, he said.

Blanco spoke at the Chainalysis Links conference in New York City at the end of last week where he stated FinCEN upholds its “technology-neutral” outlook whilst simultaneously including stablecoins under that definition.

“It does not matter if the stablecoin is backed by a currency, a commodity, or even an algorithm, the rules are the same,” Blanco said.

The clarification by the American money laundering regulator came as the director insisted stablecoin administrators must sign up as a Money Services Business (MSB) with the Financial Crimes Network.

As per CoinDesk:

“Including stablecoins as money transmitters, and their administrators as MSBs, means firms dealing with them must follow federal know-your-customer (KYC) and AML laws under the Bank Secrecy Act.”

For those that don’t know, Stablecoins are cryptocurrencies designed to minimize the volatility of the price of the stablecoin. A stablecoin is typically pegged to a cryptocurrency, fiat, or to exchange-traded commodities.

“Just because you say you are a banana doesn’t make you a banana,” he said.

“FinCEN applies the same technology neutral regulatory framework to any activity that provides the same functionality at the same level or risk, regardless of its label. It is not what you label it, it's the activity you actually do that counts.”

It will be interesting to see how this situation plays out. For more news on this and other crypto updates, keep it with CryptoDaily!