For months, Senators Kirsten Gillibrand and Cynthia Lummis had hinted that they were preparing legislation to establish guardrails for stablecoin issuers and users.
United States Senators Kirsten Gillibrand and Cynthia Lummis have introduced legislation establishing a regulatory framework for payment stablecoins.
In an April 17 announcement, the two U.S. Senators said they had introduced the Lummis-Gillibrand Payment Stablecoin Act, a bill the lawmakers had been drafting for months and expected to make public in 2024. According to Gillibrand and Lummis, the legislation prohibited “unbacked, algorithmic stablecoins” — likely a nod at TerraUSD (UST) depegging from the U.S. dollar in 2022 — required one-to-one reserves for issuers, created state and federal regulatory regimes for firms and prevented illicit uses of stablecoins.
“Passing a regulatory framework for stablecoins is absolutely critical to maintaining the U.S. dollar’s dominance, promoting responsible innovation, protecting consumers and cracking down on money laundering and illicit finance,” said Senator Gillibrand. “To draft the strongest bill possible, our offices worked closely with the relevant federal and state agencies and I’m confident this legislation can earn the necessary support in the Senate and the House.”
