Unconstitutional or Protection? Debating the Lummis-Gillibrand Stablecoin Act

Stablecoin Regulation Controversy

Coin Center, a US-based advocacy group, recently criticized the newly introduced Lummis-Gillibrand Payment Stablecoin Act. This bipartisan legislation, aimed at regulating stablecoin use, was labeled as 'unconstitutional' and 'anti-innovation' by the group due to its strict prohibitions, particularly against algorithmic stablecoins.

Legislation Details

The bill requires stablecoin issuers to maintain one-to-one reserves and comply with anti-money laundering and sanctions regulations. Coin Center suggests that instead of outright banning algorithmic stablecoins, setting a registration requirement with the SEC would be more effective and less inhibitory to innovation.

Market Growth Amidst Regulation

Despite regulatory challenges, the global market cap for stablecoins rose by 21.95% in 2024. Tether (USDT) leads with a dominant market share, while USD Coin (USDC) also holds a significant presence. Coin Center emphasizes the need for reasonable regulations that do not hinder technology advancement or free speech.