A leading member of the Senate Banking Committee introduced a bill to create a three-pronged regulatory framework for stablecoin issuers in the U.S. on Wednesday.
Sen. Patrick Toomey (R-Pa.), the ranking member of the committee, announced the “Stablecoin Transparency of Reserves and Uniform Safe Transactions Act of 2022,” dubbed the Stablecoin TRUST Act for short, as part of an effort to specify how the U.S.’s different regulatory agencies could approach companies issuing cryptocurrencies whose prices are pegged to the U.S. dollar or other assets.
As written, the bill would define a “payment stablecoin,” authorize the Office of the Comptroller of the Currency to create a new license specific to stablecoin issuers, allow insured depository banks to issue payment stablecoins and address state regulatory oversight of this segment of the crypto industry.
“Payment stablecoins” would include stablecoins issued by a centralized entity, are pegged to and can be converted to a fiat currency (or currencies), are “designed to be widely used as a medium of exchange,” do not confer interest and where transactions are recorded on a “public distributed ledger.”
Stablecoin issuers would have to choose between securing the OCC license, a state money transmitter or similar license or a traditional bank charter. These companies would be subject to a disclosure regime which would require them to secure regular attestations, detail redemption policies and specify what actually backs the stablecoins they issue.
OCC-licensed issuers would also have access to the Federal Reserve’s master account system, which would give them the ability to tap the broader financial system and larger amounts of liquidity in transacting.
In a statement, Toomey noted that stablecoins are currently mainly used for cryptocurrency trades, but suggested they could be used in the broader economy in future.
“They have the potential, among other things, to speed up payments and automate transactions. 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,” he said.
