Retiring Sen. Toomey introduces new stablecoin bill 

Sen. Pat Toomey, R-Pa., introduced a bill that would establish a federal framework for stablecoins and aims to “guide Congress” toward future crypto regulation, less than two weeks before the Republican is set to retire.

“I’ve put forward a regulatory model that won’t undermine competition by favoring entrenched incumbents,” Toomey said in a statement.

Toomey is the ranking Republican on the Senate Banking Committee, and he is viewed as an influential figure on crypto policy. The Pennsylvania lawmaker’s new bill is called the “Stablecoin Transparency of Reserves and Uniform Safe Transactions Act of 2022.”

The bill would establish a new federal license for payment stablecoin issuers. The legislation would allow recipients of the new license to issue payment stablecoins, along with depository institutions, state-based money transmitting businesses, non-depository trust companies and national trust banks. 

“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,” Toomey said.

‘High-quality liquid assets’

The Toomey proposal would require issuers to fully back their payment stablecoins with “high-quality liquid assets.” The bill would also establish new, standardized public disclosure requirements for issuers. Disclosures would include the assets backing the payment stablecoin, redemption policies and attestations from public accounting firms. 

Toomey’s bill comes as House lawmakers have spent months drafting their own stablecoin proposal. Top lawmakers on the House Financial Services Committee say they’d like to advance a stablecoin bill next year.

The TRUST Act would define key terms like “digital asset,” “payment stablecoin,” “payment stablecoin issuer” and “national limited payment stablecoin issuer.” It would clarify that payment stablecoins are not securities and issuers are not investment companies or investment advisors. The legislation also includes privacy provisions, including clarifying private transactions that don’t involve a financial institution or an intermediary do not need to be reported. 

Toomey’s policy move comes months after the Republican released a stablecoin discussion draft in April.

“I hope this framework lays the groundwork for my colleagues to pass legislation next year safeguarding customer funds without inhibiting innovation,” Toomey said. 

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