- 5 April 2022
- Posted by: Cryptovalues
- Category: Companies, Cryptovalues News, World News
There is a need for transparency in the stablecoin sector, and the need is increasing, so much so that a new bill has been introduced with the aim of bringing transparency to this $180 billion market, which is more than a little perplexing for regulators, many of whom have expressed concerns about potential exposure risks to the economy.
The proposed Stablecoin Transparency Act would require issuers to report on their reserves and is the brainchild of two Republicans, a US senator and a congressman, who introduced it in the Senate on Thursday.
If approved, the bill would have a significant impact on stablecoin issuers, as it would impose limits on how they can conduct their business.
Lawmakers are trying to find a solution that balances the interests of consumers and the economy without stifling innovation. Hollingsworth sees his legislation as a step in the right direction.
In terms of the assets that the issuing companies would need to hold as a reserve in order to proceed with stablecoin issuance, the proposal would allow only US bonds with a maturity of less than one year and cash, with the possibility that the size of these reserves would be monitored periodically to assess compliance with these regulations.
Although most stablecoins are pegged to the US dollar, Hollingsworth envisaged a law that would not be limited in scope and would therefore be extended to the different currencies in which stablecoins are being issued.
This is a common-sense proposal coming from the political side most inclined to develop the sector.