The post Senator Hagerty unveils stablecoin regulation framework to boost US Treasury demand appeared on BitcoinEthereumNews.com.

Senator Bill Hagerty (R-TN) unveiled a discussion draft of new legislation designed to provide a clear regulatory framework for stablecoin issuers. Hagerty, a member of the Senate Banking Committee, aims to remove regulatory uncertainty and unlock stablecoins’ full potential in enhancing payment systems and supporting US Treasury demand. Hagerty said in a statement: “Stablecoins have the potential not only to enhance transactions and payment systems but also to help create new demand for US Treasuries as we work to address our unsustainable deficit.” He added that the lack of clear regulation has “hindered” the growth and “promise” of stablecoins in the US, and his proposed legislation aims to create the framework needed to “unlock this technology’s full potential for the benefit of Americans.” Key provisions The draft legislation builds on the Clarity for Payment Stablecoins Act introduced by House Financial Services Committee Chairman Patrick McHenry. One of its notable provisions exempts stablecoin issuers with less than $10 billion in total assets from federal oversight, allowing them to remain under state regulatory regimes. Issuers exceeding the $10 billion threshold may request a waiver to continue operating under state regulation. The legislation mandates that stablecoin issuers maintain reserves on a one-to-one basis with the stablecoins they issue. These reserves must consist of high-quality assets such as US currency, Treasury bills, or other secure financial instruments. Issuers are required to publicly disclose the composition of these reserves monthly to ensure transparency and provide consumers with assurance that stablecoins are fully backed. Additionally, it requires the development of interoperability standards for stablecoin transactions to promote seamless integration with other financial systems and international payment networks. The legislation restricts stablecoin issuance to approved entities, labeled as “permitted payment stablecoin issuers.” This includes insured depository institutions and approved nonbank entities that meet regulatory criteria. Issuers must…

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Filed under: News - @ October 11, 2024 11:02 pm