Key takeaways:
- US Senator Cynthia Lummis is drafting legislation on stablecoins, a kind of cryptocurrency whose value is based on real-world assets to maintain price stability.
- Lummis and Gillibrand have experience developing legislation pertaining to cryptocurrencies, so this effort on stablecoin regulation won’t be their first.
US Senator Cynthia Lummis is drafting legislation on stablecoins, a kind of cryptocurrency whose value is based on real-world assets to maintain price stability.
According to a March 7 report from US-based news source Axios, Lummis and Senator Kirsten Gillibrand have been collaborating on a measure for several months to protect investors and clarify the legislative process for stablecoins.
The report, which quotes several representatives from Lummis and Gillibrand’s offices, states that the senators intend to make the announcement formally after receiving positive feedback from various stakeholders.
The study noted that technical support for the Senate bill came from the Federal Reserve, the New York Department of Financial Services, the Treasury Department, and the National Economic Council.
Lummis and Gillibrand are not new to creating legislation related to cryptocurrencies; this is not their first attempt at regulating stablecoins. In July 2013, the senators said that they would collaborate to draft legislation aimed at establishing an all-encompassing regulatory structure for digital assets.
Senator Lummis is well-known in the US for being a proponent of Bitcoin due to his frequent arguments in favor of the digital currency.
In October 2021, Lummis requested that the US government “thank God for Bitcoin” in response to US President Joe Biden’s approval of a further debt ceiling increase. Lummis urged the US government to utilize Bitcoin’s decentralized nature, which eschews government control.
Additionally, Lummis, well-known for accumulating big Bitcoin holdings, bought Bitcoin in 2021 in amounts ranging from $50,000 to $100,000.
Though Lummis remains optimistic about Bitcoin, she has recently begun to have questions about a number of noteworthy stablecoins, including Tether, the most traded cryptocurrency and largest stablecoin in terms of market capitalization.
In response to some claims that the stablecoin company was involved in illegal financial activities, Lummis supported a significant campaign against Tether in October 2023 and requested that the US Justice Department (DOJ) examine filing criminal charges against it. After that, Tether responded to lawmakers’ requests for DOJ action by saying it wished to work with US regulators as a “world-class partner.”
Lummis has also been vehemently criticizing digital currencies issued by central banks lately, claiming that they are a tool of financial censorship and anti-democratic.
