Proposed Legislation for Regulatory Framework on Payment Stablecoins
Senators Cynthia Lummis and Kirsten Gillibrand have revealed a new proposed legislation
Description of the Lummis-Gillibrand Payment Stablecoin Act
The bipartisan Lummis-Gillibrand Payment Stablecoin Act aims to benefit consumers and foster innovation while upholding the U.S. dollar’s prominence and protecting the dual banking system.
- Legislation helps meet the evolving financial industry’s demands by establishing a clear framework
- Ensures stablecoin issuers maintain 1:1 reserves
- Prohibits the use of unbacked, algorithmic stablecoins
- Forces dollar-backed stablecoins only
- Requires compliance with U.S. anti-money laundering and sanctions regulations
- Promotes the U.S. dollar as a primary digital medium of exchange
Stablecoin Issuers’ Obligations Under the Proposed Law
If the legislation passes, stablecoin issuers must adhere to specific regulations:
- Maintain one-to-one asset reserves to fully back issued stablecoins
- Issue dollar-backed stablecoins exclusively
- Comply with anti-money laundering and sanction laws
- Safeguard the U.S. dollar’s dominance
Support for the Regulatory Framework
Senator Gillibrand emphasizes the significance of the stablecoin regulatory framework:
- Crucial for maintaining the U.S. dollar’s dominance
- Promotes responsible innovation
- Protects consumers
- Combats money laundering and illicit finance
Hot Take: Ensuring Stability and Compliance in the Crypto Market
Two U.S. lawmakers have introduced a bipartisan legislation that aims to establish a regulatory framework for payment stablecoins, promoting consumer protection and innovation in the market.
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