Senate Banking Committee chair seeks answers on stablecoins from Centre, Paxos and more

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. Notably, he did not write to Tether, which issues the largest fiat-backed stablecoin by market cap and sets the *ahem* gold standard in opacity. 

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.