Key Points:
- After he leaves office in less than two weeks, Sen. Pat Toomey submitted a stablecoin bill that will direct Congress toward future crypto regulation.
- In order to issue stablecoins, non-state and non-bank institutions would need to obtain a federal license created and issued by the U.S. Office of the Comptroller of the Currency (OCC) and ensure that the stablecoins are backed by “high-quality liquid assets.” If the bill is approved by Congress, this requirement would not apply to any institutions.
- Toomey’s measure is released as House representatives have been working on their own stablecoin proposal for months. The House Financial Services Committee’s top legislators say they want to move a stablecoin bill through the next year.
In his final few weeks in office, Republican Senator Pat Toomey, who will leave the U.S. Congress at the end of the current session, introduced a new stablecoin bill that would establish a legal framework for “payment stablecoins.”
Toomey is seen as a key player in shaping crypto policy and is the ranking Republican on the Senate Banking Committee. The “Stablecoin Transparency of Reserves and Uniform Safe Transactions Act of 2022” is the name of the new legislation introduced by the Pennsylvania politician.
In a statement, the senator said:
“Stablecoins are an exciting technological development that could transform money and payments. By digitizing the U.S. dollar and making it available on a global, instant, and nearly cost-free basis, stablecoins could be widely used across the physical economy in a variety of ways.”
A new federal license would be established by the legislation to allow stablecoin issuers to be paid. The law would allow depository institutions, state-based money transmitters, non-depository trust organizations, and national trust banks, in addition to other licensees, to issue payment stablecoins.
In order to issue stablecoins, non-state and non-bank institutions would need to obtain a federal license created and issued by the U.S. Office of the Comptroller of the Currency (OCC) and ensure that the stablecoins are backed by “high-quality liquid assets.” If the bill is approved by Congress, this requirement would not apply to any institutions.
Additionally, the law would provide new, uniform standards for issuer public disclosure. The assets that support the payment of stablecoin, the redemption guidelines, and the attestations of public accounting firms would all be disclosed.
Toomey said he hoped the latest bill would lay the groundwork for his colleagues to pass legislation next year which would safeguard customer funds:
“I hope this framework lays the groundwork for my colleagues to pass legislation next year safeguarding customer funds without inhibiting innovation. I’ve put forward a regulatory model that won’t undermine competition by favoring entrenched incumbents—for example, by limiting payment stablecoin issuance to insured depository institutions. 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,” the outgoing congressman said.
Toomey’s measure is released as House representatives have been working on their own stablecoin proposal for months. The House Financial Services Committee’s top legislators say they want to move a stablecoin bill through the next year.
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