Hong Kong News

Nonpartisan, Noncommercial, unconstrained.
Thursday, Mar 28, 2024

GOP Senator Toomey proposes new rules for stablecoins

GOP Senator Toomey proposes new rules for stablecoins

Sen. Pat Toomey (R-PA) is proposing a new regulatory framework for stablecoins that would subject them to new federal disclosure requirements.
The new requirements would apply to so-called “payment stablecoins,” defined as a convertible currency designed to maintain a stable value, widely used as a medium of exchange, issued by a centralized entity, and does not pay interest.

Toomey is preparing for the prospect of stablecoins — cryptocurrencies pegged to a fiat currency like the U.S. dollar — transitioning from being used mostly for trading in and out of cryptocurrencies to being used for actual payments of goods and services.

“While today stablecoins facilitate trading with cryptocurrencies, tomorrow stablecoins could be widely used in the physical economy,” said Toomey, who is ranking member of the Senate Banking Committee. “They have the potential, among other things, to speed up payments and automate transactions.”

In new draft legislation, Toomey is proposing creating a new federal license to allow companies to issue stablecoins while still allowing for the state-registered money transmitter status for many existing stablecoin issuers, or insured depository institutions to issue stablecoins.

The bill gives traditional banks the option to separate stablecoin issuance out from other banking activities and tailor rules specifically for overseeing stablecoins.

Legislation would also offer issuers the option to apply for a new federal license issued by the Office of the Comptroller of the Currency specifically for stablecoins that would grant them direct access to the Federal Reserve system. Given that access, issuers with the new OCC license would be subject to capital and liquidity requirements, reserve asset requirements, and risk management requirements.

Toomey’s options for issuers contrast with the Biden administration’s recommendations to only allow banks to issue stablecoins. The thinking is that a bank deposit product – like a stablecoin — offers the promise of redemption of money upon demand. Last November, the President’s working group on financial markets tasked Congress with coming up with new regulations to police stablecoins.

To protect consumers, Toomey is proposing all stablecoin issuers would be subject to standard federal requirements, including disclosing the assets that back the stablecoin on a monthly basis and requiring reserves – assets that back the stablecoins – to be audited and disclosed on a quarterly basis. Issuers would also have to establish policies for redeeming stablecoins and whether redemption requests (getting one’s cash back) would be met on time or with a lag.

The legislation would also require that stablecoin issuers clearly explain that stablecoins that do not offer interest are not securities. Toomey, who takes privacy seriously, would ensure privacy protections to transactions involving stablecoins and other virtual currencies.

Assets backing stablecoins would have to be equal to a market value of 100% of the par value of the payment stablecoins outstanding; and the cash and cash equivalents or high-quality liquid assets backing the stablecoins would need to be denominated in U.S. dollars.

Since these rules only apply to stablecoins used as payments and not securities, securities laws would not apply.
Newsletter

Related Articles

Hong Kong News
0:00
0:00
Close
It's always the people with the dirty hands pointing their fingers
Paper straws found to contain long-lasting and potentially toxic chemicals - study
FTX's Bankman-Fried headed for jail after judge revokes bail
Blackrock gets half a trillion dollar deal to rebuild Ukraine
Steve Jobs' Son Launches Venture Capital Firm With $200 Million For Cancer Treatments
Google reshuffles Assistant unit, lays off some staffers, to 'supercharge' products with A.I.
End of Viagra? FDA approved a gel against erectile dysfunction
UK sanctions Russians judges over dual British national Kara-Murza's trial
US restricts visa-free travel for Hungarian passport holders because of security concerns
America's First New Nuclear Reactor in Nearly Seven Years Begins Operations
Southeast Asia moves closer to economic unity with new regional payments system
Political leader from South Africa, Julius Malema, led violent racist chants at a massive rally on Saturday
Today Hunter Biden’s best friend and business associate, Devon Archer, testified that Joe Biden met in Georgetown with Russian Moscow Mayor's Wife Yelena Baturina who later paid Hunter Biden $3.5 million in so called “consulting fees”
'I am not your servant': IndiGo crew member, passenger get into row over airline meal
Singapore Carries Out First Execution of a Woman in Two Decades Amid Capital Punishment Debate
Spanish Citizenship Granted to Iranian chess player who removed hijab
US Senate Republican Mitch McConnell freezes up, leaves press conference
Speaker McCarthy says the United States House of Representatives is getting ready to impeach Joe Biden.
San Francisco car crash
This camera man is a genius
3D ad in front of Burj Khalifa
Next level gaming
BMW driver…
Google testing journalism AI. We are doing it already 2 years, and without Google biased propoganda and manipulated censorship
Unlike illegal imigrants coming by boats - US Citizens Will Need Visa To Travel To Europe in 2024
Musk announces Twitter name and logo change to X.com
The politician and the journalist lost control and started fighting on live broadcast.
The future of sports
Unveiling the Black Hole: The Mysterious Fate of EU's Aid to Ukraine
Farewell to a Music Titan: Tony Bennett, Renowned Jazz and Pop Vocalist, Passes Away at 96
Alarming Behavior Among Florida's Sharks Raises Concerns Over Possible Cocaine Exposure
Transgender Exclusion in Miss Italy Stirs Controversy Amidst Changing Global Beauty Pageant Landscape
Joe Biden admitted, in his own words, that he delivered what he promised in exchange for the $10 million bribe he received from the Ukraine Oil Company.
TikTok Takes On Spotify And Apple, Launches Own Music Service
Global Trend: Using Anti-Fake News Laws as Censorship Tools - A Deep Dive into Tunisia's Scenario
Arresting Putin During South African Visit Would Equate to War Declaration, Asserts President Ramaphosa
Hacktivist Collective Anonymous Launches 'Project Disclosure' to Unearth Information on UFOs and ETIs
Typo sends millions of US military emails to Russian ally Mali
Server Arrested For Theft After Refusing To Pay A Table's $100 Restaurant Bill When They Dined & Dashed
The Changing Face of Europe: How Mass Migration is Reshaping the Political Landscape
China Urges EU to Clarify Strategic Partnership Amid Trade Tensions
The Last Pour: Anchor Brewing, America's Pioneer Craft Brewer, Closes After 127 Years
Democracy not: EU's Digital Commissioner Considers Shutting Down Social Media Platforms Amid Social Unrest
Sarah Silverman and Renowned Authors Lodge Copyright Infringement Case Against OpenAI and Meta
Why Do Tech Executives Support Kennedy Jr.?
The New York Times Announces Closure of its Sports Section in Favor of The Athletic
BBC Anchor Huw Edwards Hospitalized Amid Child Sex Abuse Allegations, Family Confirms
Florida Attorney General requests Meta CEO's testimony on company's platforms' alleged facilitation of illicit activities
The Distorted Mirror of actual approval ratings: Examining the True Threat to Democracy Beyond the Persona of Putin
40,000 child slaves in Congo are forced to work in cobalt mines so we can drive electric cars.
×