The soon–to–retire US Republican Senator Pat Toomey who also serves as the ranking member of the US Banking Committee has introduced a new Stablecoin bill before the US congressional session. The bill aims to establish a regulatory framework for “payment stablecoins.” These are the stablecoins that can directly be converted to fiat currency by the issuer which includes the US dollar, but not the commodity or algorithmically–backed stablecoins.
If passed by Congress, the bill would allow non-state and non-banking institutions to issue stablecoins by obtaining a federal license issued by the US Office of the Comptroller of the Currency (OCC). In such a case stablecoins shall also be backed by “high–quality liquid assets.”
In continuation to his vision for Stablecoins, Toomey has also stated that Stablecoin issuers must comply with the new public disclosure, clearly mention their redemption policies, and provide the required attestations from the authorized accounting firms.
Investor protection is also embedded in the bill where during the event of insolvency, Stablecoin holders shall be the first ones to be reimbursed. The experts say, this is the notable difference between the previous and the latest bill that Toomey introduced. It mentions that Stablecoin issuers would also be exempted from US Securities laws as long as they do not transact interest-bearing products or services as this makes them an investment and advisory firm.
Thus, Toomey’s bill for “Payments Stablecoin” is focused on giving immunity status to these digital assets from the regulatory powers of the Security and Exchange Commission (SEC) and Commodities Futures Trading Commission (CFTC).
Despite being the minority in Senate, Toomey has expressed great optimism toward the bill. He believes that it would pave way for implementing legislation protecting consumer finances in near future.