US senators introduce new stablecoin bill

Turner Wright7 hours agoUS senators introduce new stablecoin billFor months, Senators Kirsten Gillibrand and Cynthia Lummis had hinted that they were preparing legislation to establish guardrails for stablecoin issuers and users.7056 Total views27 Total sharesListen to article 0:00NewsOwn this piece of crypto historyCollect this article as NFTJoin us on social networksUnited States Senators Kirsten Gillibrand and Cynthia Lummis have introduced legislation establishing a regulatory framework for payment stablecoins.

In an April 17 announcement, the two U.S. Senators said they had introduced the Lummis-Gillibrand Payment Stablecoin Act, a bill the lawmakers had been drafting for months and expected to make public in 2024. According to Gillibrand and Lummis, the legislation prohibited “unbacked, algorithmic stablecoins” — likely a nod at TerraUSD (UST) depegging from the U.S. dollar in 2022 — required one-to-one reserves for issuers, created state and federal regulatory regimes for firms and prevented illicit uses of stablecoins.

“Passing a regulatory framework for stablecoins is absolutely critical to maintaining the U.S. dollar’s dominance, promoting responsible innovation, protecting consumers and cracking down on money laundering and illicit finance,” said Senator Gillibrand. “To draft the strongest bill possible, our offices worked closely with the relevant federal and state agencies and I’m confident this legislation can earn the necessary support in the Senate and the House.”Source: Senator Kirsten Gillibrand

According to the text of the 179-page bill, state non-depository trust companies would be allowed to issue up to $10 billion in payment stablecoins, with authorized institutions able to issue stablecoins “up to any amount” under a limited-purpose state charter. The legislation also aimed to uphold the current system of state and federal charters and established rules on custody for non-depository trust companies.

“Proper custody practices for issuers are essential, especially in light of FTX,” said a one-page document explaining the bill.

In October 2023, Senator Lummis called for the Justice Department to take action against stablecoin issuer Tether for allegedly facilitating funds Hamas used following the terrorist group’s attack on Israel. She has previously worked with Senator Gillibrand to introduce crypto-focused legislation, including one bill to establish a comprehensive framework clarifying the roles of the Securities and Exchange Commission and Commodity Futures Trading Commission in regulating digital assets.

Related:Is a US stablecoin bill just around the corner? Law Decoded

Lummis and Gillibrand had been teasing the legislation amid concerns from many lawmakers and industry leaders about establishing guardrails for stablecoin issuers in the United States. The House of Representatives took one such bill, the Clarity for Payment Stablecoins Act, out of committee in July 2023. Though the legislation appears to be ready for a full floor vote, it has seen little if any, movement in months.

Senator Sherrod Brown, who chairs the Senate Banking Committee, reportedly said on April 16 that a stablecoin bill would be one of his goals in the legislative session, provided his concerns were addressed. He did not specifically mention Lummis’ or Gillibrand’s efforts at the time.

Magazine:Lawmakers’ fear and doubt drives proposed crypto regulations in US# Law# Congress# Senate# United States# Stablecoin# RegulationAdd reaction