Senator Pat Toomey Introduces Bill to Regulate Stablecoin

As several regions continue to take the topic of crypto regulations more seriously, outgoing US senator, Sen. Pat Toomey has introduced new crypto legislation that will guide congress on its future path toward sensible regulations of cryptocurrencies.

According to Toomey in a press release, the stablecoin bill will provide the framework for payment of stablecoins and allow legislators to provide suitable legislation for the nascent industry next year without clogging the growth of the industry. 

Senator Pat Toomey’s Stablecoin Bill

Additionally, the bill from Toomey, who is an influential figure on crypto policy, will require that stablecoins are adequately backed by high-quality liquidity assets. Also, it would create a new federal license for stablecoin issuers after establishing standardized public disclosure requirements.

Interestingly the bill is designed to promote competition and ultimately protect users as it proposes that in the event of insolvency, users will be the first to be reimbursed. The soon-to-retire senator describes stablecoins as “an exciting technological development that could transform money and payments.”

Notably, the bill, if passed, will exempt stablecoin issuers from U.S securities laws as long as they don’t operate as an investment or advisory firm or offer yield-bearing products and services.

This will be one of the last acts of the Pennsylvania Republican senator in office as he is set to retire in less than two weeks from now. Senator Tim Scott will take his place as Senate Banking Committee’s ranking member after he retires on Jan 3.

Recall that Senator Pat Toomey together with other senators submitted a draft bill in September that permits American workers to diversify the asset class included in their 401(K) retirement plans. The draft bill allows investment managers to offer Bitcoin and other cryptocurrencies in the 401(K) plan.

In related news, Senator Tom Emmer has requested that Gary Gensler, Chairman of the Securities and Exchange Commissions appear before Congress to explain his approach to regulating cryptocurrencies and answer for his flawed “crypto information-gathering efforts.” Also, Sen. Toomey had at one time asked the SEC chair to explain crypto regulations in clear terms.