Pennsylvanian senator announces stablecoin regulation

Senator Pat Toomey has announced a draft of the Stablecoin Transparency of Reserves and Uniform Safe Transactions Act (TRUST).

The draft, which was unveiled on wednesday April 6, states imposes certain rules on stablecoin issuers and refers to stablecoins as digital assets able to convert “directly into fiat currency”.

Stablecoins will not be treated as securities and will also act as “payment stablecoins” including a stable value relative to a fiat currency or currencies.

In terms of the decision on whether the new bill becomes law, there may be room for modification before all votes are counted. Currently, the bill says that only three entities only be eligible to issue stablecoins.

These are either an insured depository institution, a national limited payment stablecoin issuer (or a money transmitting business), or a person who’s authorized by a state banking authority (or a similar organization).

Something to remember is that anyone issuing stablecoins must publicly declare the assets backing them whether cash reserves or something different.

Unlike Bitcoin (BTC) and ethereum where both cryptocurrencies have temperamental price increases and decreases, a stablecoin is a cryptocurrency designed with low volatility.

In a statement, Toomey added that the idea of stablecoins is to enable payments to be made with digital assets, with the view to “speed up payments and automate transactions”.

It isn’t just Toomey that is in favour of the ideals of stablecoins. Recently, the UK homed in on the coins as a means of payment.

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Updated: 04/08/2022 — 12:00