US Senators Introduce Bill to Ban Unbacked Algorithmic Stablecoins

US Senators Kirsten Gillibrand (Democrat from New York) and Cynthia Lummis (Republican from Wyoming) introduced a stablecoin bill on Wednesday. The bill would require stablecoin issuers to hold a one-to-one reserve of cash or cash equivalents to support their tokens. According to an official press release shared with The Block, it prohibits unsupported algorithmic stablecoins and claims that issuers and users cannot use stablecoins for illegal or unauthorized purposes such as money laundering. The statement said, "Maintaining the US's position through a stablecoin regulatory framework is absolutely critical. The dominant position of the US dollar promotes responsible innovation, protects consumers, and combats money laundering and illegal finance."