Republican Senator Pat Toomey, a senior member of the Senate Banking Committee, has drafted a bill proposing a regulatory framework for stablecoins in the United States.
According to a draft published on Wednesday, the Stablecoin Reserve Transparency and Unified Secure Transactions Act, also known as the Stablecoin Trust Act, proposes to identify digital assets as “payment stablecoins,” a convertible virtual currency used as a medium of exchange. which the issuer can exchange for fiat.
Importantly, the bill proposed to exempt such offerings from securities regulation by amending existing laws to ensure that the definition of “security” does not include a payment stablecoin.
The law also proposed that stablecoin issuers, which included national trust banks and licensed government trusts, be licensed by the Office of the Comptroller of the Currency. Issuers will be required to back their stablecoin reserves with assets “constituting cash and cash equivalents or high-quality, USD-denominated Level 1 liquid assets.”
Toomey said the bill focused on stablecoins because of their “potential to speed up payments and automate transactions, among other things”:
“The proposed regulatory framework that I am publishing today will allow this crypto innovation to continue to flourish, protecting consumers and minimizing the potential risks from stablecoins to the financial system. I look forward to feedback on this legislation from my peers and stakeholders as Congress continues its work to regulate stablecoins.”
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US lawmakers in the House of Representatives and the Senate have previously discussed how stablecoins can be integrated into the financial regulatory system. At the December hearings on stablecoins, Toomey proposed that the issuance of stablecoins should not be limited to insured depository institutions. North Carolina Representative Patrick McHenry proposed a state-level regulatory framework for stablecoins instead of a comprehensive federal law during a House of Representatives hearing on digital assets in February.