New Stablecoin Law Introduced in U.S.
2022.12.22 00:53
New Stablecoin Law Introduced in U.S.
Budrigannews.com – A new stablecoin bill, aimed at creating a regulatory framework for “payment stablecoins,” has been introduced by Republican Senator Pat Toomey, who will retire from Congress at the end of his term.
Toomey, who is also the ranking member of the United States Banking Committee, stated that his fellow senators’ plans to introduce stablecoin legislation in 2023 would benefit from the Stablecoin TRUST Act of 2022, which was introduced on December 21.
The senator said in a statement that stablecoins are an “exciting technological development that could transform money and payments” and added the following:
“By digitizing the U.S. dollar and making it available on a global, instant, and nearly cost-free basis, stablecoins could be widely used across the physical economy in a variety of ways.”
The bill, if approved by Congress, would allow non-state and non-bank institutions to issue stablecoins as long as the stablecoins are backed up with “high-quality liquid assets” and a federal license issued by the U.S. Office of the Comptroller of the Currency (OCC).
In addition, stablecoin issuers must adhere to a new public disclosure standard, provide regular attestations from authorized accounting firms, and clearly outline redemption policies.
Stablecoin issuers would be exempt from U.S. securities laws if they don’t offer interest-bearing products or services or act like an investment or advisory firm in any way.
The statement that stablecoin holders will be reimbursed first in the event of an issuer’s insolvency is perhaps the most notable distinction between this bill and Toomey’s previous bill, which was introduced into Congress in April 2022. Investor protection is also well-integrated into the bill.
Additionally, the bill would not apply to commodity-like or algorithmically backed stablecoins; instead, it would only apply to “payment” stablecoins that can be directly converted to fiat by the issuer, such as the United States Dollar.
The outgoing congressman stated that Toomey expressed the hope that the most recent bill would serve as a foundation for his colleagues to pass legislation the following year that would safeguard customer funds “without inhibiting innovation.”
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However, it is unknown how Toomey’s most recent stablecoin will fare in comparison to the Stablecoin Transparency Act, which was introduced in Congress on March 31 by fellow Republican Senator Bill Hagerty. 2022.
The fact that the Stablecoin Transparency Act would require fully collateralized security repurchase agreements and would classify the issuance of stablecoins as securities under U.S. securities laws is a significant distinction between the two.
In a speech he gave on December 16 to his fellow senators, Toomey said that he would retire on January 3 at the end of the Congressional session. 2023.
Republican Senator Tim Scott, whose views on the digital asset industry have not yet been made public, will take over from Toomey as the ranking member of the Senate Banking Committee.
