U.S. Republican Senator Pat Toomey introduced a bill on Wednesday to set regulations for stablecoins and to further “sensible” regulation of cryptocurrency. It comes amid a broader push to establish guard rails for the industry in the wake of the collapse of the FTX crypto exchange last month.
See related article: US Senator Elizabeth Warren submits crypto know-your-customer bill in wake of FTX collapse
Fast facts
- Dubbed the Stablecoin TRUST Act — or Transparency of Reserves and Uniform Safe Transactions — the bill follows previous attempts by the Pennsylvanian Senator to regulate the crypto industry, including the TRUST Act introduced to limited effect in April, which also addressed stablecoins.
- “I hope this framework lays the groundwork for my colleagues to pass legislation next year safeguarding customer funds without inhibiting innovation,” Toomey said in a press release. Toomey announced earlier this year he won’t be running for reelection, raising doubts about how much traction his bill will get.
- Stablecoins are a type of cryptocurrency pegged to the value of an underlying asset, typically the U.S. dollar.
- The proposed bill would ensure that stablecoins are not considered securities, which would take them out of the jurisdiction of both the Securities and Exchange Commission and the Commodities Futures Trading Commission.
- It would also stop stablecoin issuers from being considered as investment advisers or companies and allow non-bank entities to issue them. It would create a new federal license for “payment stablecoin issuers” to be managed by the same agency that governs traditional banks, the Office of the Comptroller of the Currency.
- “This bill will also ensure the Federal Reserve, which has displayed significant skepticism about stablecoins, won’t be in a position to stop this activity,” Toomey added in the same statement announcing the bill.
See related article: U.S. midterms: gridlock… and progress on crypto industry regulation?