Outgoing Pennsylvania Senator Pat Toomey on Wednesday introduced a bill that he expects would serve as a model for stablecoin legislation in the coming year.
The bill seeks to give stablecoin an immunity status from the regulatory powers of the security and exchange commission (SEC) and the Commodities Futures Trading Commission (CFTC)
Senator Pat Toomey’s latest attempt after previous failed attempts is aimed at providing a “stablecoin Trust Act,” and it is coming at a time when even the industry lobbyist are standing down and waiting for the post-FTX collapse tides to cool down.
Despite being the minority in the senate Pat Toomey, a ranking Republican senator, had expressed great optimism that the bill would help pave the way for his colleagues to implement legislation protecting customer finances without stifling innovation in 2023.
Senator Tim Scott (R.C.) will be taking his place as the next ranking Republican senator but not his place in cryptocurrency advocacy because senator Pat was one of the U.S. lawmakers that have always stood for crypto adoption.
Analyzing the Swan-Song bill
The proposed “TRUST Act of 2022” defined its scope around “digital assets, national limited payment stablecoin issuer,payment stable coin and payment stablecoin issuer”.
To avoid what he called a “potential conflict of interest,” should the Federal Reserve ever be permitted to issue digital dollars, his proposed bill is specifically designed to give crypto stablecoin a secured base.
The introduced bill recommends the creation of the Office of the Comptroller of the Currency as a licensor of businesses issuing payment stablecoins, allowing non-bank corporations to issue the tokens, and making it clear that stablecoin issuers that don’t offer interest wouldn’t be subject to securities regulations.
To maintain current state-based oversight, the bill also mandated using digital tokens, whose constant value will be maintained by pegging to an asset like the dollar, with fully backed reserves.
The bill also made it clear that payment stablecoin holders would have precedence and be protected in the case of an issuer’s bankruptcy.