Coin Center, a renowned non-profit organization that deals mostly with cryptocurrency issues, has very grave concerns about the Payment Stablecoin Act bill proposed by senators Lummis and Gillibrand. Championed by Senators Cynthia Lummis and Kirsten Gillibrand, the crypto assets would be stable, as per the bill, due to their pricing in U.S. dollars and 100 percent backing by cash equivalents only. This regulation would, therefore, be able to forbid a stablecoin algorithm that works on computational algorithms, not physical assets, thus avoiding maintaining stability.
Coin Center views the bill, which mainly focuses on stringent regulation of stablecoins, as too restrictive, creating an uncomfortable climate for the innovation of the U.S. cryptocurrency industry. During this event, the group underscored the chances of stablecoin algorithms being very unfriendly to this new financial technology, adding that stablecoins can never be separated from the unprecedented transformation of fintech. On the contrary, the nature of the reserve system of bills set at minima could put an end to the development of new and more inventive stablecoins.
Proposed stablecoin law faces free speech issues
Similar to that, in the statement issued by Coin Center on Friday, constitutional arguments against the drafting of the proposed bill were also brought up. The association condemned the prohibition as an ‘unreasonable’ and ‘unconstitutional’ way of limiting, making it equivalent to the impeding of code publication. Coin Center underlined, saying that this is a prior restraint on free speech (being protected speech) that challenges the free speech rights protected by the Constitution of the United States.
They argue that generally requiring stablecoin issuers such as Terra to register with the Securities and Exchange Commission (SEC) and comply with disclosure requirements proposed by the SEC is reasonable. Still, an outright ban on a particular business model or type of business is not.
Coin Center suggested that lawmakers look for an alternative that will not completely prohibit algorithmic stablecoins. They proposed revisiting the Clarity for Payment Stablecoins Act, which was an earlier legislative proposal that suggested a 2-year delay instead of a ban, effectively allowing for current projects to go on while pausing new ones.
Crypto advocates seek balance in stablecoin regulation
Blockchain Association (BA), another powerful supporter of Blockchain, has also joined the trail that will be followed up on in the stablecoin regulatory framework. On Wednesday, a statement from the BA Chief Executive, Kristin Smith, said that Ann Association is ready to give expert bites and meetings with its staff and senators. Through this initiative, we not only embody the sector’s effort to meet this target but also serve a broader industry purpose of ensuring that new regulations do not undermine progressive technological developments or fail to provide necessary financial safeguards.
The proposals that have been put forward by Coin Center and the Blockchain Association’s active stance to find the balance between the industry and the regulators showcase the crypto industry’s aim for a stable outlook. Through cooperation with government representatives, such institutions strive to improve the bill and reach a consensus concerning innovation as well as all the possible dangers associated with digital currencies. Their participation reaffirms the importance of dialogue and compromise in a phase of legal adaptation to financial technology.
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