Bill Overview
Title: Stablecoin Transparency Act
Description: This bill requires a stablecoin issuer to hold all reserves associated with each fiat currency-backed stablecoin they issue in (1) certain government securities; (2) fully collateralized security repurchase agreements, and (3) U.S. dollars or other nondigital currency. A fiat currency-backed stablecoin is a digital asset backed by a nondigital currency and is redeemable on a one-to-one basis in that currency. Each stablecoin issuer must publish monthly on their website a report on the reserves held by the issuer that has been audited by a third party.
Sponsors: Rep. Hollingsworth, Trey [R-IN-9]
Target Audience
Population: People using or issuing stablecoins worldwide
Estimated Size: 50000000
- Stablecoin issuers will be directly impacted as they will need to adjust their reserve holdings to comply with the new requirements.
- Stablecoin users, often involved in cryptocurrency trading and transactions, might be impacted as the stability and trust in stablecoins may increase due to regulated transparency, potentially affecting the attractiveness of these assets.
- Investors and traders who use stablecoins as a hedge against cryptocurrency volatility or as a medium for quick transactions will be impacted.
- Companies and merchants that accept payments in stablecoins may see impacts depending on changes in stablecoin reliability and market behavior following increased transparency.
- Financial institutions might be indirectly impacted as they may need to engage with stablecoin issuers for services related to reserve holdings or auditing.
Reasoning
- The main target group for this policy includes stablecoin issuers, users, and companies that engage with stablecoin transactions.
- Many US citizens are not involved in cryptocurrencies, thus making the population affected much smaller than the general population.
- The policy's budget would limit direct governmental actions to regulating and auditing the reported reserves.
- The policy might indirectly affect financial markets and institutions by enhancing trust in stablecoins but would have a more direct impact on those using or issuing stablecoins.
Simulated Interviews
Cryptocurrency Trader (New York, NY)
Age: 32 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 5.0 years
Commonness: 3/20
Statement of Opinion:
- I think the regulation will make stablecoins more trustworthy.
- There's also a risk that increased scrutiny could impact liquidity or transaction speed.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 7 |
| Year 2 | 8 | 6 |
| Year 3 | 8 | 6 |
| Year 5 | 7 | 5 |
| Year 10 | 7 | 5 |
| Year 20 | 6 | 4 |
Tech Company CFO (San Francisco, CA)
Age: 45 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 3.0 years
Commonness: 2/20
Statement of Opinion:
- Increased transparency may reassure our clients and vendors.
- We'll need to ensure compliance, which could raise operational costs.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 5 |
| Year 3 | 6 | 5 |
| Year 5 | 5 | 5 |
| Year 10 | 5 | 4 |
| Year 20 | 5 | 4 |
Software Engineer (Austin, TX)
Age: 28 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 10.0 years
Commonness: 4/20
Statement of Opinion:
- The policy makes stablecoins more reliable; I feel more confident using them.
- I hope it doesn't add complexity or cost to transactions.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 7 | 5 |
| Year 10 | 7 | 4 |
| Year 20 | 7 | 4 |
Financial Advisory Consultant (Chicago, IL)
Age: 38 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 2.0 years
Commonness: 3/20
Statement of Opinion:
- This could be a positive change for stablecoin credibility.
- It could cause short-term disruptions as issuers adjust to compliance.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 6 | 5 |
| Year 3 | 6 | 5 |
| Year 5 | 6 | 4 |
| Year 10 | 5 | 4 |
| Year 20 | 5 | 4 |
Entrepreneur (Miami, FL)
Age: 27 | Gender: other
Wellbeing Before Policy: 8
Duration of Impact: 5.0 years
Commonness: 2/20
Statement of Opinion:
- The policy requires transparency, which is good for business trust.
- Concerned about potential increase in transactional friction.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 7 |
| Year 2 | 7 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 7 | 6 |
| Year 10 | 6 | 5 |
| Year 20 | 6 | 5 |
Banking Executive (Los Angeles, CA)
Age: 50 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 3.0 years
Commonness: 2/20
Statement of Opinion:
- While I see increased stability as positive, integration with our systems may not be straightforward.
- This act could redefine stablecoin partnerships.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 6 | 5 |
| Year 3 | 5 | 4 |
| Year 5 | 5 | 4 |
| Year 10 | 5 | 4 |
| Year 20 | 5 | 3 |
University Student (Seattle, WA)
Age: 22 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 10.0 years
Commonness: 5/20
Statement of Opinion:
- The act makes me more comfortable considering stablecoins in my investment strategies.
- I'm curious about how it will affect the crypto market overall.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 5 |
| Year 2 | 6 | 5 |
| Year 3 | 6 | 5 |
| Year 5 | 6 | 5 |
| Year 10 | 6 | 5 |
| Year 20 | 6 | 4 |
Tech Journalist (Boston, MA)
Age: 39 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 5.0 years
Commonness: 2/20
Statement of Opinion:
- Enhanced transparency is essential for the next phase of crypto.
- Need to see how quickly issuers adapt to compliance.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 7 | 6 |
| Year 5 | 6 | 5 |
| Year 10 | 6 | 5 |
| Year 20 | 6 | 5 |
Small Business Owner (Houston, TX)
Age: 34 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 2.0 years
Commonness: 4/20
Statement of Opinion:
- Stability in stablecoins might benefit my transactions.
- However, I worry about transition challenges.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 6 | 5 |
| Year 3 | 6 | 5 |
| Year 5 | 6 | 5 |
| Year 10 | 5 | 4 |
| Year 20 | 5 | 4 |
Retired Accountant (Denver, CO)
Age: 55 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 0.0 years
Commonness: 6/20
Statement of Opinion:
- The transparency act leads to secure investments, enhancing trust.
- I am not directly impacted, but my peace of mind improves.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 5 |
| Year 2 | 5 | 5 |
| Year 3 | 5 | 5 |
| Year 5 | 5 | 5 |
| Year 10 | 5 | 5 |
| Year 20 | 5 | 5 |
Cost Estimates
Year 1: $75000000 (Low: $50000000, High: $100000000)
Year 2: $55000000 (Low: $40000000, High: $80000000)
Year 3: $40000000 (Low: $30000000, High: $60000000)
Year 5: $30000000 (Low: $20000000, High: $50000000)
Year 10: $20000000 (Low: $10000000, High: $40000000)
Year 100: $0 (Low: $0, High: $0)
Key Considerations
- Stablecoin markets are dynamically evolving, and regulatory impacts may change quickly based on market adaptations.
- Interaction with existing financial regulations and oversight must be considered.
- Potential impacts on U.S. competitiveness in the global cryptocurrency market if regulations are perceived as restrictive.