United States of America: Announcement of Stablecoin TRUST Act of 2022

On 6 April 2022, US Senate Banking Committee Ranking Member Pat Toomey released the initial draft of the "Stablecoin TRUST Act of 2022", which provides a regulatory framework regarding the issuance of stablecoins as well as related consumer protection. The bill provides three mechanisms for companies to issue stablecoins, namely a specific federal stablecoin license, the status as state-registered money transmitter for existing stablecoin issuers and a permission for insured depository institutions. With regards to consumer protection, the bill introduces requirements regarding clear communication on reserve assets of stablecoins and redemption policies, which must be checked by accounting firms. Finally, the bill confirms that stablecoin which do not offer an interest rate are not categorised as securities.