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United States Senators Kirsten Gillibrand and Cynthia Lummis have unveiled a new bill, known as the Lummis-Gillibrand Payment Stablecoin Act, aimed at establishing a comprehensive regulatory framework for payment stablecoins. The senators announced the introduction of the bill on April 17, stating that they had been working on its development for several months and intended to make it public in 2024.
The legislation specifically targets "unbacked, algorithmic stablecoins," potentially referencing the depegging of TerraUSD (UST) from the US dollar in 2022. The proposed bill includes provisions such as requiring issuers to maintain one-to-one reserves, implementing state and federal regulatory regimes for stablecoin firms, and preventing illicit activities involving stablecoins.
Senator Gillibrand emphasized the importance of passing a regulatory framework for stablecoins to maintain the dominance of the US dollar, foster responsible innovation, protect consumers, and combat money laundering and illicit finance. She expressed confidence that the bill, drafted in close collaboration with relevant federal and state agencies, will garner the necessary support in both the Senate and the House.
Senator Lummis previously called for action against stablecoin issuer Tether in October 2023, alleging its involvement in facilitating funds used by Hamas following the terrorist group's attack on Israel. She has collaborated with Senator Gillibrand on prior cryptocurrency-related legislation, including a bill aimed at establishing a comprehensive regulatory framework clarifying the roles of the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) in overseeing digital assets.
