Jake Chervinsky
@jchervinsky
Stablecoin legislation should be a top priority for everyone who cares about crypto policy. But the Lummis-Gillibrand Payment Stablecoin Act draft published today is deeply flawed: it appears to ban nearly everything except a narrow band of centralized, custodial stablecoins. This would be far worse than status quo.
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Taylor
@skyron.eth
I agree with your observation above. Algorithmic stablecoins would be illegal. Payment stablecoins would be allowed, but issuance by non-depository entities would require registration with the Federal Reserve and total value in circulation could not exceed $10B. USDT and USDC both exceed this.
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Taylor
@skyron.eth
To issue more that $10B, you would have to convert into a depository institution. So effectively, only banks could issue more than $10B in payment stablecoins.
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Taylor
@skyron.eth
Final observation for now. If I am reading this right, it seems like this only applies to USD-denominated stablecoins. So an overly restrictive US regime will drive demand for stablecoins denominated in other currencies.
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Jake Chervinsky
@jchervinsky
All great points. This last one is very astute. A strong argument in favor of stablecoin legislation is that regulatory clarity would help to fortify US dollar dominance worldwide (if that’s your cup of tea). But a bill as flawed as this would do exactly the opposite. All too common when it comes to regulation.
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