US Senate calls for 100% cash backing of stablecoins

Stablecoin reserves must be 100% in cash and cash equivalents, and issuers should become banks or money-market funds, she said, Bloomberg.

She said that issuers of stablecoins should be audited on a regular basis.

Lummis is known as a proponent of digital assets. In 2020 she pledged to bring обсуждение биткоина на национальный уровень. In August 2021 the senator became one of the authors of an amendment that предполагает исключение participants in the crypto industry from the infrastructure bill. The final vote on itis scheduled to take place on September 30.

In the community criticized the document for its broad definition of ‘broker,’ which would cover virtually all actors in the industry. Under its provisions, miners and node operators, wallet developers, liquidity providers in DeFi protocols, and other non-custodial players could be required to report to the tax authorities on users’ transactions.

Earlier, media reported that the U.S. Treasury planned to require stablecoin issuers to ensure their free conversion to fiat. Previously, representatives of the department discussed risks and benefits of stablecoins with representatives of the banking community and credit unions.

That same period, the head of the SEC Gary Gensler called stablecoins “poker chips in a casino” among cryptocurrencies and suggested they could have “attributes of investment contracts”. Previously, the official warned of tighter regulation of stablecoins and DeFi.

In July the President’s Working Group on Financial Markets held a meeting. Its members discussed the rapid growth of stablecoins, their use as a means of payment, and the potential risks for end users, the financial system and national security.

Earlier, the head of the Federal Reserve System, Jerome Powell expressed doubt about the necessity of stablecoins. He likened stablecoins to money market funds and savings banks.

In August the issuer of USDC, the Centre consortium announced its intention to move the token’s reserves into dollars and Treasury bills.

The issuer of the stablecoin USDT, Tether Limited, in its July report noted that the share of cash and bank deposits that can be redeemed within two days or less stood at about 10%.

The Paxos company behind Pax Dollar (formerly Paxos Standard) confirmed 100% backing of every issued USDP and BUSD with U.S. dollars and their equivalents.

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