On April 19, Coin Center, one of the largest cryptocurrencycurrency lobbying groups, opposed the Senate’s stablecoin bill. The Lummis-Gillibrand Payment Stablecoin Act, introduced by Senators Kirsten Gillibrand and Cynthia Lummis, seeks to regulate stablecoins whose value is linked to established currencies like the US dollar.
However, while the necessity for regulation is accepted, Coin Center recommends a two-year embargo on algorithmic stablecoins, as outlined in a different bill in the House, rather than a drastic approach. This is consistent with views made by Coin Center Executive Director Jerry Brito, who advocates for legislation on stablecoin laws in the United States.
Coin Center believes that the discontinuation of algorithmic stablecoins is an unconstitutional proposition. The defendants say that it is not a type of expression protected under free speech and consequently undermines the balance between individual rights and state authority.
The conversation follows the 2022 cryptocurrency market crash, which was sparked, among other things, by the stablecoin UST (TerraUSD) losing its dollar peg. This event highlighted one of the potential risks associated with stablecoins. To put matters in perspective, Sherrod Brown, Chair of the US Senate Banking Committee, has begun to focus on stable coin legislation.
The Clarity for Payment Stablecoins Act is also up for a full floor vote, and the fate of the Lummis-Gillibrand Act remains questionable.
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