Senator Pat Toomey Proposes New Stablecoin Regulations
The Pennsylvania Senator announced the Stablecoin Transparency of Reserves and Uniform Safe Transactions Act of 2022.
Senator Pat Toomey (R) of Pennsylvania, a leading member of the Senate Banking Committee, has introduced a new regulatory framework for stablecoins that would subject them to new federal disclosure requirements. These requirements would apply to payment stablecoins, which are convertible currencies designed to maintain a stable value and pegged to a fiat currency or asset, making it so that the Office of the Comptroller of the Currency (OCC) can create a new license for stablecoin users and address state regulatory oversight.
Toomey is essentially preparing for the prospect of stablecoins to transition from being mostly used in digital asset trading to actually being used for payments of goods and services. To protect consumers, Toomey is proposing that all stablecoin issuers be subjected to standard federal requirements, such as disclosing the assets that back the stablecoin on a recurring basis.
The Pennsylvania Senator’s option for issuers differs from that of Democratic President Joe Biden’s administration, who instead envisages a future where only banks are allowed to issue stablecoins, making it a much more regulated digital asset field. Unsurprisingly, the administration had asked in November for Congress to envisage new regulations to police stablecoins.