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, or (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: Sen. Hagerty, Bill [R-TN]
Target Audience
Population: Individuals using stablecoins or investing in stablecoin projects
Estimated Size: 15000000
- The bill targets stablecoin issuers, which are companies or entities that create digital currencies backed by fiat currencies.
- Individuals who use stablecoins, especially those who use them for transactions, investments, or savings, will be impacted as the transparency requirement may affect their trust and reliance on stablecoins.
- Investors in stablecoin-related projects will be impacted as the reporting and reserve requirements could influence the financial stability and attractiveness of stablecoin investments.
- The cryptocurrency market as a whole, including exchanges that offer stablecoins, could also be impacted due to shifts in how stablecoins are perceived and regulated.
Reasoning
- The policy primarily targets stablecoin issuers and aims to establish transparency that influences users who engage in transactions or hold investments in stablecoins.
- The target population comprises individuals involved in cryptocurrency, either through usage or investment, representing a substantial demographic in the U.S.
- Considering cost limits, we illustrate a range of potential impacts based on varying degrees of engagement with stablecoins.
- Stablecoin transparency can potentially stabilize the market, offering reassurance to users which might improve investor confidence.
- Not all users will be directly affected; some might not interact with stablecoins frequently enough for the policy to alter their economic activities or wellbeing.
Simulated Interviews
Cryptocurrency Trader (New York City, NY)
Age: 30 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 20.0 years
Commonness: 5/20
Statement of Opinion:
- I rely on stablecoins for trading due to their supposed stability. I am skeptical if this policy will really secure stablecoins or just complicate my trading activities with more bureaucracy.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 6 |
| Year 2 | 8 | 5 |
| Year 3 | 7 | 6 |
| Year 5 | 8 | 5 |
| Year 10 | 9 | 5 |
| Year 20 | 7 | 4 |
Tech Entrepreneur (San Francisco, CA)
Age: 45 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 10.0 years
Commonness: 4/20
Statement of Opinion:
- If transparency is truly enforced, this can make stablecoins a more reliable tool for business operations, benefiting my international transactions.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 6 |
| Year 3 | 8 | 5 |
| Year 5 | 8 | 5 |
| Year 10 | 8 | 5 |
| Year 20 | 6 | 5 |
Freelance Graphic Designer (Austin, TX)
Age: 28 | Gender: other
Wellbeing Before Policy: 6
Duration of Impact: 5.0 years
Commonness: 7/20
Statement of Opinion:
- I prefer being paid in stablecoins since it's fast, but I'm worried about the real value if they aren't properly backed.
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 | 6 | 5 |
| Year 10 | 7 | 5 |
| Year 20 | 6 | 4 |
Financial Analyst (Chicago, IL)
Age: 52 | Gender: female
Wellbeing Before Policy: 5
Duration of Impact: 0.0 years
Commonness: 10/20
Statement of Opinion:
- I have always doubted the backing of stablecoins, but this policy could make them more credible, though I still lean towards traditional investments.
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 |
Real Estate Investor (Miami, FL)
Age: 40 | Gender: male
Wellbeing Before Policy: 6
Duration of Impact: 0.0 years
Commonness: 12/20
Statement of Opinion:
- It's interesting that stablecoins are getting more official oversight, but my real estate dealings don't rely on them much, so it doesn't affect me directly.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 6 | 6 |
| Year 3 | 6 | 6 |
| Year 5 | 6 | 6 |
| Year 10 | 6 | 6 |
| Year 20 | 6 | 6 |
Digital Artist (Seattle, WA)
Age: 26 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 5.0 years
Commonness: 8/20
Statement of Opinion:
- If stablecoins become better regulated, I might feel more secure in accepting them as payment.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 7 | 5 |
| Year 3 | 7 | 5 |
| Year 5 | 6 | 5 |
| Year 10 | 6 | 5 |
| Year 20 | 5 | 4 |
Retired Banker (Boston, MA)
Age: 63 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 0.0 years
Commonness: 10/20
Statement of Opinion:
- This policy could be a step towards stablecoins being a viable investment like other assets, but for now, it doesn't change my current position.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 7 | 7 |
| Year 5 | 7 | 7 |
| Year 10 | 7 | 7 |
| Year 20 | 7 | 7 |
Cryptocurrency Exchange Employee (Austin, TX)
Age: 35 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 10.0 years
Commonness: 3/20
Statement of Opinion:
- Stablecoin regulation affects my work environment and tasks; clarity will help, but implementation takes time.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 6 |
| Year 2 | 8 | 5 |
| Year 3 | 8 | 5 |
| Year 5 | 8 | 5 |
| Year 10 | 7 | 5 |
| Year 20 | 6 | 5 |
App Developer (Los Angeles, CA)
Age: 29 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 10.0 years
Commonness: 6/20
Statement of Opinion:
- As someone working in tech, stablecoin transparency could help integrate them better in financial apps, ensuring user trust.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 7 |
| Year 2 | 8 | 6 |
| Year 3 | 9 | 5 |
| Year 5 | 9 | 5 |
| Year 10 | 9 | 5 |
| Year 20 | 7 | 5 |
Economist (Denver, CO)
Age: 50 | Gender: other
Wellbeing Before Policy: 8
Duration of Impact: 0.0 years
Commonness: 4/20
Statement of Opinion:
- This act might signal greater regulation in cryptocurrencies, making them safer for the economy overall, although it doesn't affect my personal wellbeing significantly.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 8 |
| Year 2 | 8 | 8 |
| Year 3 | 8 | 8 |
| Year 5 | 8 | 8 |
| Year 10 | 8 | 8 |
| Year 20 | 8 | 8 |
Cost Estimates
Year 1: $100000000 (Low: $75000000, High: $150000000)
Year 2: $105000000 (Low: $78750000, High: $157500000)
Year 3: $110250000 (Low: $82687500, High: $165375000)
Year 5: $121550000 (Low: $91162500, High: $182325000)
Year 10: $148920775 (Low: $111690581, High: $223381163)
Year 100: $1158929495 (Low: $869197122, High: $1738394241)
Key Considerations
- The success of the bill heavily relies on the integrity and capacity of third-party auditors to provide accurate and unbiased reports.
- Ongoing technological advancements in digital currencies may alter the assumptions underlying these estimates.
- The global nature of cryptocurrencies means that actions taken by other countries can influence the effectiveness and efficiency of U.S.-based regulations.