Senators Cynthia Lummis and Kirsten Gillibrand are taking another swing at regulating digital assets – specifically with stablecoin legislation.
The bipartisan bill was revealed today and it attempts to provide a federal path to regulated privately issued stablecoins in a market that is largely overseen at the state level.
The bill is entitled the Lummis-Gillibrand Payment Stablecoin Act. A stablecoin issuer is defined as an institution approved by the Comptroller or a State bank supervisor. The stablecoin legislation focuses on the digital dollar, a digital payment asset.
Algorithmic stablecoins are explicitly banned.
Of note is the language that a non-depository trust company may issue and redeem payment stablecoins as long as the aggregate value does not exceed $10,000,000,000. Depository organizations may exceed this hurdle.
Assets backing the stablecoin must be disclosed every month and any holder of a stablecoin must be able to redeem into fiat within 24 hours. Approved reserves are outlined in the bill.
The legislation is 179 pages long and available below.
Some observers view stablecoins as the new payment rails, improving upon existing payments and transfer structures and enabling faster value transfers at a lower cost.
While the legislation is clearly needed in a market that is very active, there is no guarantee the legislation will pass the Democrat-dominated Senate.
