A new bipartisan stablecoin bill has been introduced in the US by Sens. Kirsten Gillibrand and Cynthia Lummis, allowing banks and nonbank trust companies to issue stablecoins via dedicated subsidiaries. The bill would also require monthly disclosures of the assets backing the stablecoin and their value, with state financial regulators being allowed to supervise and authorize stablecoin-issuing companies if the volume does not exceed $10 billion. In response, the DC-based Crypto Council for Innovation welcomed the legislation and expressed readiness to continue dialogue with lawmakers. Additionally, the legislation would make it unlawful for any person to be involved in the business of "issuing, creating, or originating" algorithmic stablecoins.
Key Takeaways
- Sens. Kirsten Gillibrand and Cynthia Lummis introduce a bipartisan stablecoin bill in the US Congress.
- The bill allows banks and nonbank trust companies to issue stablecoins via dedicated subsidiaries.
- Stablecoin issuers would be required to disclose assets backing the stablecoin and the value of the assets on a monthly basis.
- State financial regulators would supervise and authorize stablecoin-issuing companies, with enforcement actions from the Federal Reserve for bigger firms.
- The legislation aims to make it unlawful to be involved in the business of "issuing, creating, or originating" algorithmic stablecoins.
Analysis
The bipartisan stablecoin bill introduced by Sens. Kirsten Gillibrand and Cynthia Lummis in the US Congress could have significant implications for the cryptocurrency industry. The bill's requirement for monthly disclosures of stablecoin assets and state regulatory supervision could affect stablecoin issuers and banking institutions. Additionally, the legislation's focus on algorithmic stablecoins could impact companies involved in their creation. In the short-term, this may lead to increased transparency and oversight in the stablecoin market, while in the long-term, it could spur innovation and regulation within the cryptocurrency space. The DC-based Crypto Council for Innovation's support indicates potential industry collaboration with lawmakers, signaling possible future developments.
Did You Know?
- Bipartisan Stablecoin Bill: Sens. Kirsten Gillibrand and Cynthia Lummis introduced a bill in the US Congress to regulate the issuance of stablecoins, a type of cryptocurrency tied to a stable asset or a basket of assets.
- Monthly Disclosures of Assets: The bill requires stablecoin issuers to disclose the assets backing the stablecoin and their value on a monthly basis. This transparency measure aims to provide clarity regarding the stability and security of stablecoins in the market.
- Algorithmic Stablecoins: The legislation aims to make it unlawful to be involved in the business of "issuing, creating, or originating" algorithmic stablecoins, which are a type of stablecoin managed by algorithms.