Senate Banking Committee Chair.
The person isErin Scott.
After the Biden administration asked Congress to regulate the rapidly growing corner of thecryptocurrencies space, the Senate committee overseeing banks and coinage is asking stablecoin issuers for information about how they conduct business.
The chair of the Senate Banking Committee wants to know how stablecoin issuers and the exchanges are protecting consumers and investors.
Stable coins are tied to government-issued money like the US dollar, and they make up a portion of the larger market for cryptocurrencies.
Brown wrote a letter to Circle, which is behind digital asset trading platforms, expressing his concerns about the non-standardized terms of redemption of stable coins.
The committee sent information-request letters to the issuers of stablecoins on Tuesday.
Brown wants to know if the companies will respond by December 3. He wrote a letter to Tether.
1. Please describe the basic purchase, exchange, or minting process by which customers can acquire Tether for U.S. dollars. Explain any limitations or qualifications that are relevant to completing that process.
Brown spoke about the coin established by Paxos.
7. "If you have conducted any internal reviews or studies about how specific levels of redemptions would affect BUSD, please let me know."
Brown said in his letters that complex terms and conditions can make it difficult for investors and consumers to fully understand how stable coins function and what their potential risks are.
Stablecoins are typicallyinted in exchange for U.S. dollars, or other conventional currency, but the purchase of stablecoins through a trading platform may not provide customers with the same rights and entitlements as a direct purchase from an issuer.
The Biden administration said in a report at the start of November that stable coins could become widely adopted, noting that a regulatory framework would build confidence in using the digital assets for payment purposes.
Congress should impose certain laws, such as only allowing banks to issue stable coins, that are needed for the sake of rules.
Thank you for the letter inquiring about the topic of how stablecoin issuers protect consumers. Jeremy Allaire, Circle's co-founder and CEO, wrote on his account that he would be responding and working with you to make sure consumers are protected.
Business Insider has an original article.
