Pro-crypto U.S. Senator Pat Toomey has left a parting gift for Congress before he retires. On Dec. 21, he filed the “Stablecoin Transparency of Reserves and Uniform Safe Transactions Act of 2022,” also known as the “Stablecoin TRUST Act of 2022.”
The Republican has advocated for progressive legislation that does not stifle fintech innovation or send crypto companies overseas. However, his counterparts, Senators Elizabeth Warren and Sherrod Brown, want to ban the asset class entirely.
In his final days in office before Congress closes down for the holiday period and he retires, Senator Toomey said:
“I hope this framework lays the groundwork for my colleagues to pass legislation next year safeguarding customer funds without inhibiting innovation.”
A Stablecoin Act for Issuers
The stablecoin act aims to authorize licensed entities such as depository institutions, state-based money-transmitting businesses, and national trust banks to issue stablecoins.
It also proposes the establishment of new, standardized public disclosure requirements for all payment stablecoin issuers. The bill wants to keep stablecoins out of traditional finance and, as such, classify them as non-securities.
“Clarifies that payment stablecoins are not securities and payment stablecoin issuers are not investment companies or investment advisers.”
It goes on to reject the notion that “existing and antiquated Bank Secrecy Act reporting requirements” should be applied to new technologies like digital assets.
Consumer protection is also provided with a clarification that stablecoin holders would have priority in the event of an issuer’s insolvency.
Senator Toomey opposed the Biden Administration’s infrastructure bill last year, stating that the language in it was flawed.
The bill is a step in the right direction, unlike the one proposed by Elizabeth Warren, which aims to eradicate financial privacy entirely. Showing her ignorance of the technology, Warren also wants to force blockchain software, such as nodes and validators, to register as “Financial Institutions.”
Stablecoins currently represent 16.5% of the entire crypto market capitalization, with around $140 billion in them.
Tether’s USDT remains the market leader, with a share of 47% and 66.3 billion tokens in circulation. Circle’s USDC is second, with a market share of 31% and 44.3 billion stablecoins.
Binance’s BUSD has seen its market share grow to 13% over the past months at the expense of the leading two.
Tether has been fighting the FUD fire this month, with mainstream media constantly on the attack in the wake of the FTX collapse.