On April 19, Coin Center, one of the leading cryptocurrency lobbying groups, found itself against the Senate’s bill concerning stablecoins. The Lummis-Gillibrand Payment Stablecoin Act, submitted by Senators Kirsten Gillibrand and Cynthia Lummis, is drafted for the purpose of regulating stablecoins whose value follows traditional currencies, such as the US dollar.
Coin Center considers that the termination of algorithmic stablecoins puts forward an unconstitutional proposition. The defendants argue that it cannot be considered a form of expression protected as part of free speech, and thus it violates the balance between individual rights and state authority.
However, even as the need for regulation is acknowledged, Coin Center advises a two-year moratorium on algorithmic stablecoins, as per a separate bill in the House, instead of a drastic approach. This is synonymous with remarks made by Coin Center Executive Director Jerry Brito, where he champions the need for legislation on stablecoin regulations in the US.
The discussion follows the 2022 crypto market crisis, which, among other things, was initiated by the stablecoin UST (TerraUSD) that lost its dollar peg. This event shed light on one of the potential hazards that are also involved in stablecoins. To put things into perspective, US Senate Banking Committee Chairperson Sherrod Brown began placing his focus on the legislation of stablecoins.
The other bill in question is the Clarity for Payment Stablecoins Act, which is pending a full floor vote, and the fate of the Lummis-Gillibrand Act is still uncertain.
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