WASHINGTON — The top Republican on the Senate Banking Committee unveiled legislation that would create a new federal license for stablecoin issuers and set baseline standards for consumer protection.
Introduced by Sen. Pat Toomey, R-Pa., on Wednesday as
In a press release, Toomey said he believed that stablecoins would soon “be widely used in the physical economy. They have the potential, among other things, to speed up payments and automate transactions.” “The proposed regulatory framework I’m releasing today will allow this crypto-innovation to continue flourishing while protecting consumers and minimizing potential risks from stablecoins to the financial system,” Toomey said.
Fintech companies have asked for years that the federal government develop a type of national charter
The other two regulatory approaches that would be available to stablecoin issuers under the bill are already in use today, including state-by-state registration. The third approach outlined in Toomey’s bill “clarifies” that banks are permitted to issue stablecoins.
The draft legislation would also mandate quarterly audits from a public accounting firm and establish disclosure requirements for licensed stablecoin issuers, including monthly disclosures of the assets backing a given stablecoin and on how long the process of converting clients’ stablecoin holdings to fiat currency can take.
Notably for banks, the bill also allows national depository institutions to “segregate” their stablecoin business into a “separate legal entity,” allowing banks to benefit from the same “tailored” regulatory standards that would be applied to the OCC’s national limited payments charter for stablecoin firms, according to the text of the discussion draft.
Toomey’s bill will also amend the Securities Exchange Act to specify that a stablecoin does not qualify as a security so long as it does not charge interest.
