Senator Pat Toomey Is Introducing A New Stablecoin Bill
Pat Toomey, a Republican Senator who is near his retirement from United States Congress, has introduced an exclusive bill covering stablecoins, targeting the establishment of a regulatory agenda for the stablecoins related to payments. Toomey also provides the services of being a prominent US Banking Committee member.
Republican Senator Proposes a Bill for Stablecoin Regulation at the end of his Congressional Term
He stated on the 21st of December this year that the Stablecoin TRUST Act of 2022 had been established as an agenda for the regulation of stablecoins. In his words, he has attempted to facilitate his colleague senators who pursue to implement legislation for stablecoins in the coming year. In his statement, Toomey labeled stablecoins as a remarkable development in the industry and could evolve the whole payments and money-related space.
The senator added that through the digitalization of the United States dollar and ensuring its availability across the globe on a cost-free and rapid basis, there is a broad utility of the stablecoins throughout the physical economy in diverse ways.
On being authorized by Congress of the United States, the respective bill would allow non-bank as well as non-state organizations to release stablecoins till they receive a federal license developed and released by the US Office of the Comptroller of the Currency (OCC). The issuers of stablecoins are required to abide by the latest standard related to public disclosure.
They also need to define the redemption policies along with the provision of regular attestations made by the approved accounting companies. This bill will relieve the stablecoin issuing entities from the securities laws of the United States till they do not provide interest-bearing services or products or otherwise play the role of advisory or investment companies.
The Bill Prioritizes Investor Protection through Proper Compensation
Investor protection is additionally included in the bill as it mentions that in case of the insolvency of an issuer, the holders of the stablecoin will have the foremost right to be compensated. This counts as the most significant difference between the present bill as well as the one proposed formerly by Toomey in April this year.
The scope of the bill is restricted just to payment stablecoins as the issuer can convert them to fiat, like the US dollar, as opposed to the algorithmically-backed or commodity-like stablecoins. The senator expressed his confidence that the stablecoin bill would provide a foundation for his fellows to establish legislation in this field in 2023. He asserted that the legislation formed on this bill would potentially protect consumer funds.
The departing congressman is of the view that no hindrance would be posed by his new bill in the way of innovation. Nonetheless, it is yet to be witnessed how the unique stablecoin bill will stand up in comparison with the Stablecoin Transparency Act. The act was released into the country’s Congress by Bill Hagerty (another Republican Senator) on the 31st of March 2022.
A prominent difference between these two acts is that the Stablecoin Transparency Act’s authorization would put stablecoins in the category of securities that come under the securities laws of the US and there would be a requirement to implement the agreements dealing with the completely collateralized securities’ repurchase. As declared by Toomey on the 16th of this month, his Congressional session would end on the 3rd of January in the next year.
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