Elements of the Payment Stablecoin Act may be beneficial to American consumers, but critics claim parts of it are “unconstitutional.” 📜 Republican Cynthia Lummis and Democrat Kirsten Gillibrand are leading efforts to provide regulatory clarity on digital assets in the US. Its recent legislative efforts have focused on the need for a well-defined framework to protect consumers and ensure that the dollar still remains dominant in digital payments. However, one of the key proposals of the Lummis-Gillibrand Payment Stablecoin Act is a complete ban on algorithmic stablecoins in the US. This prevents the launch of coins that are not backed by real-world assets, such as Terraform Labs' UST. This proposal has raised concerns among some advocacy groups, such as Coin Center. The think tank's executive director, Jerry Brito, argued that a ban "is not only bad policy, it's unconstitutional." Legal proposals also have the potential to impact Circle's operation. The proposals state that trust companies can only issue $10 billion worth of stablecoins, meaning Circle cannot operate in its current form without a regulated depository institution. On the other hand, it is stated that Legal proposals could open the doors to mass adoption of stablecoin payments. This could be transformative for remittances, which involve workers working abroad sending money to their families. This sector was worth an estimated $669 billion in 2023, according to World Bank data, but the typical cost of remittances is 6.2%. That's $41 billion that could benefit local economies — all consumed by transaction fees. If enacted, these proposals would introduce measures to ensure that all stablecoins are properly backed on a one-to-one basis with dollars held in reserve and would introduce FDIC deposit insurance in the event of a regulator going bankrupt.