A US cryptocurrency advocacy group, Coin Center, has voiced worries over a new Senate bill aimed at creating regulations and safety measures for payment stablecoins.
According to a statement made by Coin Center on April 19th, they believe that the Payment Stablecoin Act proposed by Senators Kirsten Gillibrand and Cynthia Lummis is flawed and potentially unconstitutional. The reason being, the act aims to prohibit algorithmic stablecoins, which Coin Center argues is an infringement on code, a form of expression protected under the First Amendment.
“Coin Center argues that while it might be logical for issuers of coins like Terra to register with the SEC and disclose information (effectively making it difficult for them to function as stablecoins), an outright prohibition on specific business models is excessive and stifles innovation. If a business can adhere to securities regulations, they should be allowed to introduce their product in the market.”
It’s commendable that Jerry Brito, Executive Director of Coin Center, supports the initiative to establish regulations for stablecoins in the US. The suggested legislation restricts the issuance of dollar-backed stablecoins to those approved by American authorities.
US lawmakers are currently developing legislative plans to address the issue of stablecoins. One proposed solution, known as the Clarity for Payment Stablecoins Act, was suggested by Coin Center and is scheduled for a vote in the House of Representatives. This bill offers a more moderate approach to regulating algorithmic stablecoins, suggesting a two-year ban instead of an outright prohibition.
In 2022, the decoupling of TerraUSD (UST) from the US dollar was a key factor that led to a crypto market crash. Consequently, multiple companies went bankrupt, and there were ongoing investigations by American authorities and regulators into criminal and civil wrongdoings among individuals in the illicit crypto sector.
Senator Sherrod Brown, heading the Senate Banking Committee, expressed his intention to pursue a bill on stablecoins during the legislative session, as long as his apprehensions were addressed. No scheduled votes on the Clarity for Payment Stablecoins Act were reported in the House at that moment.
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2024-04-19 21:58