January 27, 2023

A US senator has introduced a bill to “establish the first federal regulatory framework for payment stablecoins.” The legislator explained, “This bill will also ensure that the Federal Reserve, which has shown significant skepticism about stablecoins, will be unable to stop this activity.”

Stablecoin TRUST Act of 2022

U.S. Senator Pat Toomey (R-PA), senior member of the Senate Banking, Housing and Urban Affairs Committee, introduced the “Stablecoin Transparency of Reserves and Uniform Safe Transactions Act of 2022” on Wednesday. The bill is also known as the “Stablecoin TRUST Act of 2022”.

According to the lawmaker, the legislation would “establish the first federal regulatory framework for payments stablecoins and lead Congress on a path for sensible regulation of cryptocurrencies.” Senator Toomey opined:

I hope this framework lays the groundwork for my colleagues to pass legislation next year that protects clients’ funds without hindering innovation… This bill will also ensure that the Federal Reserve, which has shown significant skepticism about stablecoins , will not be able to stop this activity .

“Stablecoins are an exciting technological development that has the potential to transform money and payments. Digitizing the US dollar and making it available globally, instantly and almost for free, stablecoins can be widely used in the physical economy in a variety of ways,” Toomey noted. The Pennsylvania legislator will retire from the Senate at the end of his term in January next year.

The bill “encourages competition by authorizing various types of regulated entities to issue stablecoins for payments,” the Senate Banking, Housing and Urban Affairs Committee described, adding that it “improves financial stability by requiring all stablecoins for payments are fully backed by high-quality, high-liquid assets.” In addition, the bill “establishes transparency by subjecting all payment stablecoin issuers to standardized disclosure requirements and certifications from registered accounting firms,” the Senate Judiciary Committee further explained.

Toomey published a draft of this Stablecoin TRUST bill in April, calling it “the first Senate bill to establish a comprehensive regulatory framework for payment stablecoins.”

The senator from Pennsylvania is pro-crypto. Last week he said that cryptocurrency cannot be stopped and that the collapse of crypto exchange FTX is not an indictment of cryptocurrency. In February, lawmakers said crypto assets are here to stay and a thoroughly diversified portfolio should have some.

What do you think of the Stablecoin TRUST Act? Let us know in the comments below.

Kevin Helms

Austrian economics student Kevin found Bitcoin in 2011 and has been an evangelist ever since. His interests are in Bitcoin security, open source systems, network effects and the intersection between economics and cryptography.

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