Coin Center, a non-profit organization advocating for cryptocurrency, has raised concerns about a stablecoin bill proposed by Senators Cynthia Lummis and Kirsten Gillibrand. According to Coin Center, the bill’s prohibition on algorithmic payment stablecoins may be unconstitutional and could hinder innovation in the crypto industry. The Washington-based crypto think tank argues that banning algorithmic models not only stifles innovation but also violates First Amendment rights by restricting freedom of expression. The proposed legislation, developed in collaboration with the Federal Reserve and the New York State Department of Financial Services, aims to regulate stablecoins by requiring issuers to maintain reserves of cash or cash equivalents at a 1:1 ratio. Additionally, the bill prohibits the issuance of unbacked algorithmic stablecoins, limiting approved issuers to dollar-backed stablecoins only. While the bill aims to bring clarity to the stablecoin market, critics argue that its restrictive measures targeting specific models could impede technological progress in the crypto space.
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