Stablecoin

Reserve

Bitcoin

U.S. Senators Kirsten Gillibrand and Cynthia Lummis introduced a bill to regulate stablecoins.
According to a <a href="https://www.gillibrand.senate.gov/news/press/release/lummis-gillibrand-introduce-bipartisan-landmark-legislation-to-create-regulatory-framework-for-stablecoins/" target="_blank" rel="noopener noreferrer nofollow">press release</a>, the bill was developed jointly with the Federal Reserve and the New York State Department of Financial Services. Stablecoin issuers must have reserves of cash or cash equivalents at a 1:1 ratio to back their tokens.
In addition, the bill introduces a ban on unbacked algorithmic <a href="https://crypto.news/tag/stablecoin/" target="_blank" rel="noopener noreferrer nofollow">stablecoins</a>. The bill’s authors argue that neither the issuer nor the users can use stablecoins for illegal or unauthorized purposes, such as money laundering.
<blockquote class="wp-block-quote">
 “To meet the growing demand for our ever-evolving financial industry, we need to craft legislation that strikes the careful balance of establishing a clear and workable framework for stablecoins while protecting consumers.” <cite>Senator Cynthia Lummis (R-Wyo.)</cite>
</blockquote>
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The explanatory note states that the bill aims to create a framework that encourages “responsible” innovation. The piece of legislation envisions using stablecoins for faster cross-border transactions, lower fees, and unlocking the potential of the digital asset industry.
The preparation of an alternative bill on stablecoins <a href="https://crypto.news/stablecoin-regulation-senators/" target="_blank" rel="noopener noreferrer nofollow">became</a> known in early April 2024. It became a response to the bill presented in the spring of 2023. The latter provides for the subordination of issuing companies to the Fed and a temporary ban on algorithmic stablecoins.
Gillibrand called her bill a reasonable compromise since it puts oversight responsibilities in the hands of state regulators. After publication, the head of the U.S. Senate Banking Committee, Sherrod Brown, <a href="https://www.bloomberg.com/news/articles/2024-04-16/stablecoin-law-push-gets-surprise-boost-from-crypto-skeptic-sherrod-brown" target="_blank" rel="noopener noreferrer nofollow">stated</a> that he was ready to vote for the bill’s passage under certain conditions.
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US senators reveal new stablecoin bill

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