According to the Stablecoin TRUST Act, digital assets should be classified as “payment stablecoins,” which are free from numerous securities restrictions.
Senator Pat Toomey, the ranking member of the Senate Banking Committee, has proposed a regulatory framework for stablecoins in the US.
The ‘Stablecoin Transparency of Reserves and Uniform Safe Transactions Act,’ also known as the Stablecoin TRUST Act, proposed that digital assets be classified as “payment stablecoins” — a convertible virtual currency that can be redeemed for fiat by the issuer.
Importantly, the bill proposes that such offerings be free from securities rules by changing current laws to exclude payment stablecoins from the term of “security.”
The bill also called for stablecoin issuers to be licensed by the Office of the Comptroller of the Currency, which would include national trust institutions and licensed state-chartered trusts. The issuers would have to back up their stablecoin reserves with “cash and cash equivalents or level 1 high-quality liquid assets denominated in US dollars.”
According to Toomey, stablecoins were highlighted in the draught law because of their “potential, among other things, to speed up payments and automate transactions”:
“The proposed regulatory framework I’m announcing today will allow this crypto-innovation to thrive while protecting consumers and reducing possible dangers to the financial system from stablecoins.” As Congress continues to work on stablecoin regulation, I look forward to hearing from my colleagues and stakeholders on this legislation.”
Stablecoins have previously been addressed by US lawmakers in both the House of Representatives and the Senate as a way to integrate them into the financial regulatory framework. Toomey proposed that stablecoin supply not be confined to insured depository institutions at a hearing on stablecoins in December. During a House hearing on stablecoins, North Carolina Representative Patrick McHenry recommended a state-level regulatory framework in lieu of full federal law.
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