October 08, 2021

Toomey Raises Concerns Over Administration’s Forthcoming Stablecoin Report

Washington, D.C. – U.S. Senate Banking Committee Ranking Member Pat Toomey (R-Pa.) is raising concerns over both the process and the reported content of the President’s Working Group on Financial Markets’ (PWG) forthcoming report on stablecoins. In July, the Department of the Treasury (Treasury) and the PWG announced they would issue a report this year with written recommendations on the regulation of stablecoins.

In a letter to Treasury Secretary Janet Yellen, Ranking Member Toomey wrote:

“While it is important to discuss and consider regulatory and legislative approaches for safeguarding consumers and financial markets, the federal government should take the time necessary to thoughtfully develop a comprehensive understanding of an emerging financial innovation like stablecoins. I am worried the administration, however, is not doing that.”

As Senator Toomey noted, current federal financial laws were written decades before cryptocurrency was conceived. Questions about whether and how to regulate crypto and stablecoins should begin with Congress. Furthermore, the process used by the PWG has lacked transparency and adequate engagement with relevant stakeholders.

“Rather than have regulators stretch existing laws or take advantage of ambiguities to cover stablecoins, Congress should enact new clarifying legislation and determine whether, and to what extent, federal agencies should have jurisdiction over stablecoins,” Senator Toomey wrote.

Ranking Member Toomey also laid out a number of issues he believes the administration should address in its report—including the economic benefits of stablecoins and the differences between various coins—and cautioned against encouraging the Financial Stability Oversight Council (FSOC) to designate stablecoins as systemically important.

“As the administration continues its work on the report, I strongly encourage you to take a thoughtful, fair, and balanced approach to analyzing stablecoins,” Senator Toomey wrote. “The administration would do well to remember that America’s longstanding status as the world’s leading economy is due, in no small part, to our tradition of fostering technological innovation, not stifling it.”

To read Ranking Member Toomey’s full letter, click here.