The U.S. Senate Banking Committee has requested further information on stablecoins and how companies that issue them are protecting consumers. Senator Sherrod Brown penned a letter to the industry’s leading stablecoin issuers seeking further information on Nov 23. The letter was sent to the chief executives of Tether and Circle. According to the Senator’s official website, a copy was also sent to Coinbase, Centre, Gemini, Paxos, TrustToken, and Binance.US.
“Stablecoins present investor protection risks and raise several market integrity concerns.”
It stated that a recent President’s Working Group on Financial Markets report highlighted that “stablecoins present investor protection risks and raise several market integrity concerns.” Brown, the Chair of the Senate Committee on Banking, Housing, and Urban Affairs, said that “complex terms and conditions” applicable to crypto-assets and stablecoins can make it difficult for investors and consumers to fully understand how they function and their potential risks. “I have significant concerns with the non-standardized terms applicable to the redemption of particular stablecoins,” the letter mentioned.
Brown set a response date of Dec 3.
Brown has set a response date of Dec 3 and asked for clear and straightforward terms regarding “basic purchase, exchange, or minting processes” by which customers can acquire stablecoins for USD. He also sought information on redeeming processes, issuance, “enhanced capabilities” on trading platforms, and market or operational conditions that would prevent the purchase or redemption of the asset.
Earlier, the founder and CEO of Circle, Jeremy Allaire, thanked the Senator for the inquiry and spoke of further cooperation with regulators. “I look forward to responding and working with you to ensure consumers are appropriately protected,” the CEO had tweeted.