Republican Senator Pat Toomey, a ranking member of the Senate Banking Committee, has drafted a bill proposing a regulatory framework for US stablecoins.
The Stablecoin TRUST Act, abbreviated as the Stablecoin TRUST Act, proposed that digital assets be designated as currencies, according to a draft released on Wednesday. Fixed Payment - a convertible virtual currency used as a medium of exchange that can be exchanged for fiat currency by the issuer.
Crucially, the bill suggested that such offerings should be exempt from securities regulations by amending existing laws to ensure that the definition of securities does not include a fixed currency for payment. .
The legislation also suggested that issuers of stablecoins — which include national trust banks and trusts licensed by the state — be licensed by the Office of the Comptroller of the Currency. p>
Issuers will be required to back their stablecoin reserves with cash and cash equivalents or Tier 1 high-quality liquid assets denominated in US dollars, CoinTelegraph reported. p>
Tommy said the draft law focused on stablecoins due to their potential, among other things, to speed up payments and automate transactions.
He further said: The proposed regulatory framework he's launching today will allow this crypto innovation to continue to thrive while protecting consumers and reducing potential risks from stablecoins to the financial system. I look forward to receiving comments on this legislation from my colleagues and stakeholders as Congress continues its work on stablecoin regulation.