Rep. Trey Hollingsworth is leading the effort in the U.S. House of Representatives
WASHINGTON—United States Senator Bill Hagerty (R-TN), a member of the Senate Banking Committee, introduced the Stablecoin Transparency Act, which provides much-needed clarity to the cryptocurrency industry on what constitutes a stablecoin and how they are to be backed.
“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. “This legislation aims to provide much-needed clarity without giving the keys away to unaccountable bureaucrats who threaten to choke off innovation. I am pleased to have Congressman Hollingsworth’s partnership in this common-sense effort.”
“There is a tremendous amount of potential in stablecoin technology, and we should lay down a foundation providing stablecoin issuers clarity to ensure consumers are well-protected and to ensure that the future of the technology is well-protected. As these digital assets proliferate across financial services and permeate Americans’ lives, we should make sure it happens safely to enable more development and investment in the industry,” said Rep. Hollingsworth.
The legislation requires stablecoins to be backed by government securities with maturities less than 12 months or U.S. dollars and requires stablecoin issuers to publicly release audited reports of their reserves that are executed by third-party auditors. It does not give federal agencies the power to regulate these innovative technologies out of existence or to impose onerous requirements on stablecoin issuers.