U.S. Sen. Pat Toomey (R-PA) released a discussion draft of a bill that would establish a new regulatory framework for payment stablecoins.
The draft legislation would establish a new federal license designed specifically for stablecoin issuers; preserve the state-registered money transmitter status for most existing stablecoin issuers; and clarify that insured depository institutions are permitted to issue stablecoins.
It also seeks to protect consumers by subjecting all payment stablecoin issuers to standardized requirements. These requirements include disclosures regarding the reserve assets backing the stablecoin, clear redemption policies, routine audits by registered public accounting firms, and privacy protections for transactions involving stablecoins and other virtual currencies, among other measures.
Further, establishing this framework for payment stablecoins rejects the Securities and Exchange Commission’s approach of regulating through enforcement actions.
“While today stablecoins facilitate trading with cryptocurrencies, tomorrow stablecoins could be widely used in the physical economy. They have the potential, among other things, to speed up payments and automate transactions,” Toomey, ranking member on the Senate Finance Committee, said. “The proposed regulatory framework I’m releasing today will allow this crypto-innovation to continue flourishing while protecting consumers and minimizing potential risks from stablecoins to the financial system. I look forward to receiving feedback on this legislation from my colleagues and stakeholders as Congress continues its work on stablecoin regulation.”
In December of last year, Toomey released a set of principles to lay the framework for forthcoming stablecoin legislation.