US Senator Patrick Toomey has introduced a special framework for fine-tuning stable coins in terms of transparency and security. The name of this project is the Law on Transparency of Reserves and Unified Transactions for the Sale of Stable Coins of 2022, also called the Trust Act. With this, the United States officially accepts stable coins as part of its banking and financial ecosystems. This makes the United States the first Western nation to do so. The TRUST Act aims to regulate stablecoins to increase their usefulness for daily payments.

Stablecoins are those cryptocurrencies that try to tie their market price to a reserve asset such as gold or fiat currencies. They are popular for digital transactions that involve converting virtual assets into “real” traditional ones, such as the US dollar. Tether, USD Coin and Binance USD are some popular stable coins that are pegged to the American fiat currency.

According to Senator Tumi’s Trust Act, the issuers of stablecoins will have to provide an official license that qualifies them as legitimate financial entities. Publishers may choose licenses such as currency controller (OCC) or government money carrier or other similar items.

Stablecoin issuers will also need to set up a regular audit system and have a clear structure for asset repurchase policies. Detailed specifications for the asset to which their stablecoins will be tied are also required to be provided by issuers to the relevant authorities, the Trust Act says.

The document also explicitly refers to dollar-backed stablecoins as “payment stablecoins”. The TRUST Act clarifies that it only applies to these stablecoils.

“The law does not affect non-paying stablecoins (eg, staplecoins secured by commodities or virtual currencies, or algorithmic stablecoins),” it said.

The development comes after US President Joe Biden recently signed executive orders for government oversight of the cryptocurrency industry.

The Stabilkoyns have been under surveillance by the US government for some time.

Many US-based crypto-focused companies issue stable coins that allow owners to facilitate quick payments while saving on transaction fees, which are usually charged by banks.

Reports surfaced last year suggesting that the US government is indeed seeking to regulate these relatively stable cryptocurrencies, which remain less affected by market fluctuations due to the main stable reserve asset.

According to CoinGeckothe current market capitalization of stablecoins is over $ 188 billion (approximately 14,565,570 crore rupees).

Earlier in April this year, the United Kingdom officially recognized stable coins as the official form of payment.

“The government intends to introduce legislation to introduce stablecoins – when used as a means of payment – within the regulatory payment perimeter, creating conditions for stable coin issuers and service providers to operate and invest in the UK”, official blog post he had said at the time.


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