In November 23 letters seen by The Block, Senator Sherrod Brown is calling on stablecoin operators to open up about their processes.
The letter to Circle's Jeremy Allaire reads: "Consumers’ increased use of stablecoins, and their importance in effecting transactions in digital assets, underscores the need for greater understanding of the basic operation, and limitations, of USDC."
Brown sent similar letters to Coinbase, Gemini, Paxos, TrustToken, Binance.US and Centre. According to Brown's office, "a similar letter to Tether is planned but has not been sent yet." A copy of the letter intended for Tether began circulating on social media after being discovered online.
Setting a response date of December 3, Brown asked the issuers to explain in "clear, straightforward terms" their processes for minting and redemption, as well as special arrangements that those issuers have with specific trading platforms.
The letters reference the President's Working Group's report on stablecoins. Released at the beginning of November, the report pushed legislators to restrict stablecoin issuance to insured depository institutions — effectively, banks.
Brown chairs the Senate Banking Committee, in which capacity he has been at the Senate's front lines in the legislative body's encounters with crypto.
Update: This report has been updated to reflect that an additional letter, not included in the initial press push from Senator Brown's office, was written with the intention to be sent to stablecoin operator Tether.
Update #2: Updates from an earlier version that indicated the letter had been officially sent.