Stablecoins Could be Exempted From the US Securities Regulations: New Bill

A senior member of the Senate Banking Committee, Republican Senator Pat Toomey, has drafted a bill proposing a regulatory framework for stablecoins in the US.

The bill on Reserve Transparency and Unified Secure Transactions in Stablecoins, abbreviated as the Stablecoin Trust Law, proposes to identify digital assets as “payment stablecoins,” a convertible virtual currency used as a medium of exchange that can be redeemed by an issuer for fiat.

Such transactions are proposed to be exempted from securities regulation by amending existing laws to ensure that the definition of “security” does not include a payment stablecoin.

The law includes national trust banks and licensed government trusts as issuers of stablecoins. It is proposed that they obtain a license from the Office of the Comptroller of the Currency. Issuers will also be required to back their stablecoin reserves with assets “constituting cash and cash equivalents or high-quality, USD-denominated Level 1 liquid assets.”

Toomey said the new bill, if passed, would allow innovation to continue flourishing while protecting consumers and minimizing the potential risks from stablecoins to the financial system.

Earlier, the head of the US Securities and Exchange Commission (SEC), Gary Gensler, said he is considering increased regulation of stablecoin issuers and restrictions on cryptocurrency exchanges acting as custodians and market makers.

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