A new legislation to regulate stablecoins filed in the US Senate may benefit the issuers as reported by investment banking firm TD Cowen.Â
The Lummis-Gillibrand Payment Stablecoin Act introduced by Senators Kirsten Gillibrand and Cynthia Lummis has clear regulations such as requiring the stablecoin issuers to maintain 1:1 ratio reserves and preventing algorithmic stablecoins.
According to TD Cowen, the bill is a major progress on crypto regulation in Congress, which is important for this sector. The bill’s possible passage may pave the way for the joining of banks and stablecoin issuers. Yet, the statute is likely to encounter obstacles, including the urge to work to get Congress on board.
In the House, negotiations for a stablecoin regulatory framework continue between Chair Patrick McHenry and Rep. Maxine Waters. TD Cowen suggests a compromise similar to the Senate bill.
However, advocacy groups like Coin Center express concerns, particularly regarding the proposed ban on algorithmic stablecoins, which they argue may be unconstitutional.
Also Read: Senator Cynthia Lummis and Gillibrand Craft Bill for Stablecoin Regulation
