In the crypto regulation sector in the USA, senators Kirsten Gillibrand and Cynthia Lummis have introduced a new bill that prohibits unsecured algorithmic stablecoins.
Summary
Regulation of Crypto in the USA and the Lummis-Gillibrand Payment Stablecoin Act
For the crypto regulation sector in the USA, senators Kirsten Gillibrand and Cynthia Lummis have introduced a new bill that bans unbacked algorithmic stablecoins.
Specifically, the Lummis-Gillibrand Payment Stablecoin Act requires issuers to back their tokens one-to-one and implements an anti-money laundering framework.
Basically, what the bill requires is that issuers of algorithmic stablecoins guarantee their tokens by holding liquidity or equivalent reserves to support them.
On this subject, Gillibrand stated the following:
“The approval of a regulatory framework for stablecoins is absolutely essential to maintain the dominance of the US dollar, promote responsible innovation, protect consumers, and combat money laundering and illicit finance”
This proposal seems to want to “responsabilize innovation”. In fact, favorable use cases of stablecoins for fast international transactions, lower fees, and digital native advantage for new programs and apps are highlighted.
Crypto Regulation in the USA: Proposal on Stablecoins to Protect Consumers
The ban on unsecured algorithmic stablecoins, proposed by the Lummis-Gillibrand Payment Stablecoin Act aims to protect consumers from the potential insolvency of the issuer.
Basically, this bill provides protection and resolution for the Federal Deposit Insurance Corporation (FDIC).
This FDIC establishes a detailed regime of controlled administration for all payment stablecoin issuers. Among other things, it includes priority order, validity of credits, and classification of payment stablecoins as customer assets and not issuer assets.
Not only, another peculiarity of the new crypto regulation proposal in the USA signed by Lummis and Gillibrand, is to preserve the dual banking system.
In this case, the bill would give federal and state entities the authority to manage and enforce regulations on stablecoins.
The senator who publicly supports Bitcoin
Always in the USA, the senator of the State of Tennessee, Marsha Blackburn, has publicly spoken in support of Bitcoin.
Basically, at the second annual Bitcoin Policy Summit, the senator used the event to emphasize the increasingly central role of crypto within modern society.
Not only that, Blackburn also highlighted the need to correct US regulation on Bitcoin and crypto.
