Brief Overview:
• Stablecoin regulatory bills face both support and opposition;
• The bill wants to ban algorithmic stablecoins;
• According to an American law professor, this bill could harm the US financial system.
The new stablecoin regulation bill, co-sponsored by Senators Lummis and Gillibrand, could significantly inhibit innovation in the United States.
The current stablecoin regulatory bill that has attracted much attention
The 179-page bill, filed last week by Lummis and Gillibrand, seeks to provide a clear legal status for stablecoins pegged to fiat currencies and provide clear legal regulations for their operation.
In addition, the proposal has a zero-tolerance attitude towards algorithmic stablecoins that are not backed by sufficient fiat currency reserves, which will have far-reaching implications for software developers and the entire technology community.
Among all the other focuses of the bill, it supports the use of a mechanism whereby the Federal Deposit Insurance Corporation (FDIC) regulates and resolves the issuer if it goes bankrupt. Congressional stablecoin legislation has sparked excitement within the crypto space, but not so much for the traditional financial ecosystem.
Among the bill’s many focal points, it advocates for a mechanism to bring the Federal Deposit Insurance Corporation (FDIC) under its purview and resolve the issue if a stablecoin issuer becomes insolvent. This congressional stablecoin legislation has generated a lot of excitement within the cryptocurrency industry, but not so much for the traditional financial system.
Hilary Allen, an associate professor at American University Washington College of Law, seemed concerned about the content of the bill. Notably, Allen is someone who has written and spoken extensively about how various crypto products can undermine the stability of the financial system.
Hilary Allen, an associate professor of law at American University Washington College of Law, expressed concerns about the content of the bill. Professor Allen is a scholar who has conducted in-depth research and extensive writing on how various cryptocurrency products may undermine the stability of the financial system.
With the new stablecoin bill waiting to be passed, he sees this as a case of a “huge disaster” waiting to happen.
Controversy and support for the stablecoin bill
Allen does not believe that stablecoins qualify as a form of payment. Specifically, he made it clear that the blockchains that support these stablecoins are neither reliable nor have sufficient throughput.
The professor was quick to point out that provisions of the Lummis-backed stablecoin bill regarding an FDIC takeover could lead to significant increases in banking fees for all U.S. consumers.
In addition to the subtle hostility to the bill, there has been some supportive discussion that the bill violates First Amendment rights, particularly its provision prohibiting algorithmic stablecoins. Cryptocurrency advocacy group Coin Center challenged the Lummis-Gillibrand bill because the bill’s regulations on stablecoins raised concerns that it would conflict with the free speech rights guaranteed by the First Amendment.
Jerry Brito, CEO of the crypto advocacy group, praised the government’s commitment to regulating stablecoins in the region. Overall, since the collapse of Terraform Labs in 2022, multiple efforts in the cryptocurrency industry have become more focused and intensified. #稳定币监管 #监管提案
