New Stablecoin Legislation Proposed by US Senators Gillibrand and Lummis
United States Senators Kirsten Gillibrand and Cynthia Lummis have presented a new bill aimed at establishing comprehensive regulations for stablecoin issuers and fiat-backed digital assets. The Lummis-Gillibrand Payment Stablecoin Act, expected to be formally introduced in 2024, includes measures to prevent the use of unbacked algorithmic stablecoins, enforce one-to-one reserves, and combat illicit activities related to stablecoins. The legislation aims to preserve the dominance of the US dollar, promote responsible innovation, protect consumers, and mitigate the risks of money laundering and illicit finance. Key provisions of the bill grant state non-depository trust companies the authority to issue payment stablecoins up to $10 billion and impose stringent rules on custody practices for such companies. Senator Lummis’ previous advocacy for regulatory action against Tether, coupled with Senator Gillibrand’s commitment to clarifying regulatory roles in the digital asset space, highlights their dedication to ensuring the integrity of stablecoin operations. These efforts come at a time when lawmakers and industry stakeholders are increasingly concerned about the need for robust regulatory safeguards for stablecoin issuers in the United States. Senator Sherrod Brown, Chair of the Senate Banking Committee, has expressed his intent to prioritize stablecoin legislation, showing the significance of ongoing discussions surrounding stablecoin regulation within the US legislative landscape.