Libra is a security, says Gary Gensler, former Commodity Futures Trading Commission (CFTC) chairman in prepared to his remarks to the U.S. House of Representatives.
He added in his written testimony that Facebook’s new cryptocurrency “Libra” looks like an investment vehicle and further it may even resemble some banking structures. Gensler has previously chaired CFTC from 2009 to 2014 and also notably, held a leadership role at the US Treasury Department.
Gensler will testify before the House Financial Services Committee on Wednesday, as part of a panel of expert witnesses on the potential implications of Libra. He is set to be joined by Public Citizen president Robert Weissman, Columbia University law professor Katharina Pistor and Georgetown University law professor Chris Brummer.
The Arguments With Libra
Libra is intended to act as a kind of stablecoin, where its value will be pegged to a basket of sovereign currencies and government bonds. Members of the Libra Association, the governing council which is currently charged with overseeing its ongoing development, after the launch will receive a Libra investment token – a security token, as Facebook has previously stated.
According to Gensler, Libra is a security for the same reasons Libra Investment Token is a security. As proposed, the Libra Reserve is a pooled investment vehicle that should at a minimum, be regulated by the Securities and Exchange Commission (SEC), with the Libra Association registering as an investment advisor.
Libra has already come under the scanner of SEC where it is considering whether Libra could be considered a security, and therefore falls under its purview, according to a Wall Street Journal report.