Coin Center Opposes “Unconsititutional” Stablecoin Bill

Cryptocurrency advocacy group Coin Center is opposing new legislation aimed at regulating the use and operation of stablecoins.in public statement A US-based advocacy group released on Friday harshly criticized the Lummis Gillibrand Payments Stablecoin Act, calling it “unconstitutional” and anti-innovation.

The latest stablecoin bill is bad policy: Coin Center

Wednesday, Sen. Kirsten Gillibrand and Sen. Cynthia Lummis. introduced Invoice for stablecoin payments. This bipartisan bill aims to protect investors’ interests as stablecoins have grown in popularity and adoption in recent years as a “comfortable” alternative to the US dollar.

The Lummis-Gillibrand Payment Stablecoin Act contains a number of important provisions, including strict compliance by stablecoin operators with existing U.S. anti-money laundering and sanctions regulations. Additionally, the bill also proposes the creation of a federal and state regulatory framework that would maintain the seamless existence of a dual banking system.

Importantly, the bipartisan bill would require all stablecoin issuers to maintain 1-to-1 reserves, making algorithmic stablecoins dependent on computer programs that adjust supply in response to changes in demand. , which effectively outlaws the use of stablecoins. This particular provision has sparked a lot of reaction from the digital asset community, with many viewing such legislation as anti-cryptocurrency.

In particular, Coin Center called the proposed regulation bad policy. Cryptocurrency advocacy groups said the ban on the use of algorithmic stablecoins could be interpreted as a ban on publishing code that would be unconstitutional under First Amendment rights provisions.

However, Coin Center also acknowledges concerns about algorithmic stablecoins following the collapse of the Terra-Luna ecosystem in 2022. They are proposing that the U.S. Senate, rather than implementing a blanket ban on algorithmic stablecoins, require issuers of these tokens to register with the SEC. They consider it “anti-innovation.”

US crypto advocacy groups have also highlighted another solution in the Payments Clarity Stablecoin Act, introduced in 2021, which would require all newly issued algorithmic stablecoins to have a two-year period. The purpose is to enforce a grace period. Although Coin Center does not agree with the proposed moratorium, it does not propose an outright ban or threaten developers’ “free speech,” so such laws remain reasonable. I believe that.

Stablecoin supply will increase by 22% in 2024

In other news, the global stablecoin market continues to expand throughout 2024. Data from DeFiLlama, The market capitalization of stablecoins increased by 21.95% from $139.342 billion on January 1, 2024 to a current value of $158.957 billion.

Among these values, Tether USD (USDT) shows an overwhelming dominance of 69.10%, with a market capitalization of $109.84 billion. The only other stablecoin with a reasonably large market share (20.90%) is USD Coin (USDC) with a market capitalization of $33.223 billion. Other notable stablecoins include Dai (DAI), First Digital USD (FUSD), and Athena USDe (USDe).

Total crypto market cap valued at $2.266 trillion on daily chart | Source: TOTAL chart on Tradingview.com

Featured image from Britannica, chart from Tradingview

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