banner
US: stablecoin bill presented
US: stablecoin bill presented
Stable Coin

US: stablecoin bill presented

By Vincenzo Cacioppoli - 5 Apr 2022

Chevron down

Congressman Trey Hollingsworth of Indiana in the House and Senator Bill Hagerty of Tennessee in the Senate, both from the Republican Party, introduced a new bill on Friday to regulate stablecoins in the US

US: stablecoin bill arrives in Congress

stablecoin congress
The ‘Transparency Stablecoin Act’ arrives at the US congress

After a number of requests in recent months to speed up the regulation of stablecoins in the United States, two Republican Party politicians have now submitted a bill to Congress to bring order to a sector that is growing by leaps and bounds, without yet having a precise and defined legislative framework.

The Stablecoin Transparency Act states that stablecoins must be fully backed by a combination of US dollars and “government securities with maturities less than 12 months”. It would also legally oblige issuers of stablecoins to publish regularly audited reports showing their fiat currency reserves.

“From whether coins are securities or commodities, to who is in charge of regulating them, those in the cryptocurrency marketplace are navigating significant ambiguity”,

said Senator Hagerty, explaining the need for the legislative body to get its hands on the matter.

The bill, according to the Tennessee senator, has already received many favourable comments from both regulators and crypto industry representatives. Hollingsworth also admitted that the bill may not be a final solution, but it could strike the right balance between development, technology and consumer protection.

The proposed idea

The basic idea of the proposal would be to ensure that for every dollar of stablecoin, the company issuing it would have $1 of fiat currency as a reserve. This would avoid any controversy surrounding the soundness of stablecoin-issuing companies, such as Tether, which in the past has faced rumours about its reserves of fiat currency.

In October, a Bloomberg article doubted whether Tether actually had sufficient liquidity to cover the amount of stablecoins in circulation, which are pegged to the value of a strong currency such as the dollar and the euro. The same thing had happened months earlier with an article in the Financial Times, to which the company replied, describing the news as baseless.

Senator Hagerty said that the Stablecoin Transparency Act would be about consumer protection, but at the same time would not put stablecoins in the hands of “unaccountable bureaucrats who threaten to choke off innovation”.

 

Vincenzo Cacioppoli

Vincenzo was born in Genova but lived most of his life in Milan. He has a degree in political science. He is a journalist, blogger, writer, and marketing and digital advertising expert. After a long experience in traditional marketing, he started working with the web and digital advertising in 2011, creating a company called Le enfants. Passionate about the web and innovation, in 2018 he started exploring the topics related to blockchain technology and cryptocurrencies. Independent cryptocurrency trader since March 2018, he now collaborates with companies in the sector as a content marketing specialist. In his blog. mediateccando.blogspot.com, he has long been primarily focused on blockchain, which he considers to be the greatest technological innovation after the Internet. His first book about blockchain and fintech is scheduled for release in November.

We use cookies to make sure you can have the best experience on our site. If you continue to use this site we will assume that you are happy with it.