Democratic Senator Kirsten Gillibrand of New York and Republican Senator Cynthia Lummis of Wyoming have teamed up to introduce a new legislative proposal on stablecoins, which enjoys the support of members from both parties.
The legislation allows banks and non-bank trust firms to establish separate entities to produce stablecoins.
Every month, stablecoin creators must publicly reveal the assets supporting their digital currency, the worth of those assets, and the amount of outstanding payments.
If a stablecoin-issuing company’s total issued coins value is under $10 billion, financial regulators at the state level can oversee and approve their operations. For larger firms exceeding this threshold, the Federal Reserve holds the authority to enforce actions against them. For those whose volume falls below $10 billion, regulatory actions must be collaboratively carried out by both the state and federal regulatory bodies.
The proposed law additionally prohibits individuals from engaging in the production or initiation of algorithmic stablecoins, including their issuance or creation. This is a response to the significant loss of over $40 billion following the collapse of Terra – an unstable algorithmic coin – that occurred in 2022.
The DC-based Crypto Council for Innovation expressed approval of the new legislation through a social media post and indicated their readiness to carry on conversations with legislators.
The industry alliance emphasizes the importance of the US upholding its leading position, focusing on innovation, and making technology a non-partisan matter. We commend legislators for addressing this significant issue and are prepared to carry on our discussions with them.
According to U.Today’s news, Paul Grewal, Coinbase’s top lawyer, has called on Congress to approve the legislation concerning stablecoins. He believes this step will effectively tackle the minimal illegal financial transactions taking place in the cryptocurrency sphere.
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2024-04-17 19:13