US Senators Kirsten Gillibrand and Cynthia Lummis have introduced the Lummis-Gillibrand Payment Stablecoin Act, a bipartisan legislation aimed at regulating payment stablecoins. The bill seeks to protect consumers, promote responsible innovation, and prevent money laundering and illicit finance.
Key Points:
– The bill prohibits unbacked, algorithmic stablecoins and mandates one-to-one reserves for issuers.
– It establishes state and federal regulatory regimes for stablecoin firms to prevent illicit uses of stablecoins.
– State non-depository trust companies can issue up to $10 billion in payment stablecoins under the legislation.
– Proper custody practices for stablecoin issuers are emphasized in light of recent incidents like the FTX incident.
– Senators Lummis and Gillibrand have previously collaborated on crypto-focused legislation to clarify regulatory roles.
– The bill addresses concerns from lawmakers and industry leaders about establishing guardrails for stablecoin issuers in the US.
– Senator Sherrod Brown has expressed interest in addressing stablecoin regulation in the current legislative session.
Summary:
– The Lummis-Gillibrand Payment Stablecoin Act aims to regulate payment stablecoins to protect consumers and prevent illicit finance.
– It prohibits unbacked stablecoins, mandates reserves for issuers, and establishes regulatory regimes for stablecoin firms.
– The bill allows state non-depository trust companies to issue payment stablecoins and emphasizes proper custody practices for issuers.
– Senators Lummis and Gillibrand have a history of collaborating on crypto-focused legislation to clarify regulatory roles.
– The bill addresses concerns about establishing guardrails for stablecoin issuers in the US, with support from Senator Sherrod Brown.
