Coin Center, an organization that advocates for digital currencies, has voiced strong objections to the Lummis-Gillibrand Payment Stablecoin Act. According to Coin Center, the bill unconstitutionally restricts constitutional rights if passed. The bipartisan legislation, backed by Senators Kirsten Gillibrand and Cynthia Lummis, aims to control the payment of stablecoins. However, Coin Center argues that the bill’s ban on algorithmic stablecoins could infringe upon the First Amendment by targeting the code that defines digital assets. In simpler terms, they believe the bill may limit free speech by regulating the code used in digital currencies.
Jerry Brito, Director at Coin Center, expressed his approval towards the regulation of stablecoins. He highlighted that this move opens up possibilities for advancements in technology under a defined legal structure. The proposed legislation restricts dollar-backed stablecoin issuance to entities recognized in the US. Instead of viewing it as a prohibition, Coin Center sees it as an invitation for stablecoin issuers to register with the Securities and Exchange Commission (SEC).
Coin Center Critiques Senate’s Stablecoin Regulation Approach
Lately, lawmakers have made efforts to set clear guidelines for the functionality of stablecoins through legislation. This push comes after TerraUSD’s inability to keep a consistent value with the dollar in 2022. This incident caused a major crash in the cryptocurrency market and resulted in numerous bankruptcies, as well as increased scrutiny from both U.S. regulatory bodies and local law enforcement. Coin Center explained the distinctions between the Senate’s reform proposal and another presented in the House.
An alternative approach suggested in the Stablecoins Act up for a House vote is imposing a two-year moratorium on algorithmic stablecoins instead of an outright ban. Coin Center advocates for this more flexible solution, as it appears achievable and indicative of forward motion in crypto regulation. This proposition contrasts with the stricter Senate proposals, signaling ongoing debate in the oversight of cryptocurrencies.
Uncertainty Surrounds House Stablecoin Act Vote
Coin Center suggests a flexible registration process for cryptocurrencies with the aim of fostering development while adhering to regulations. They believe that the current securities regulatory framework is adequate to address potential risks related to stablecoins. In this perspective, new products should be incorporated under existing laws instead of creating new regulations. By doing so, innovation will flourish, and consumer protection and market integrity will be preserved.
Senator Sherrod Brown, who heads the Senate Banking Committee, has indicated a desire to progress with a bill regarding stablecoins. He underlined the importance of addressing his worries before making any significant strides. Nevertheless, there are no definite arrangements to bring the House’s Clarity for Payment Stablecoins Act up for a vote at this time. This ambiguity complicates efforts to create a clear-cut regulatory framework for stablecoins within the United States.
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2024-04-20 00:23