LUMMIS, GILLIBRAND INTRODUCE BILL PROHIBITING UNBACKED ALGORITHMIC STABLECOINS AMONG OTHER REGULATORY FRAMEWORKS

Summary from the TLDR Crypto newsletter

Senators Kirsten Gillibrand (D-NY) and pro-crypto Cynthia Lummis (R-WY) released the Lummis-Gillibrand Payment Stablecoin Act to regulate the stablecoin industry. The act would require stablecoin issuers to hold one-to-one cash or cash-equivalent assets and prohibit unbacked algorithmic stablecoins. If an issuer experiences insolvency, there would be an FDIC conservatorship and resolution. There are some concerns that the bill is too strict with its definition of cash equivalents and that it could prohibit innovation with new stablecoin designs.