Coin Center criticizes stablecoin bill as ‘unnecessary’ and ‘unconstitutional’
Crypto industry advocates are opposing legislation that could limit stablecoin offerings in the United States.
The Lummis-Gillibrand Payment Stablecoin Act has been introduced. U.S. Senators Cynthia Lummis and Kirsten Gillibrand Wednesday will require stablecoins to be collateralized by one-to-one cash or cash-equivalent reserves, effectively making algorithmic stablecoins illegal. Federal and state authorities responsible for stablecoin licensing and enforcement.
However, Coin Center, a cryptocurrency-focused non-profit organization, said A letter to lawmakers on Friday called the proposed framework an “irrational” and even “unconstitutional” measure that could stifle innovation in the U.S. cryptocurrency industry.
“While it may be reasonable to require issuers of products like Terra to register with the SEC and make appropriate disclosures, blanket bans on certain business models are unnecessary and antithetical to innovation,” Coin Center said in a statement.
The group also argued that banning algorithmic stablecoins, digital tokens backed by computer programming, is “essentially a code ban” that threatens the freedom of expression enshrined in the U.S. Constitution.
““Banning people from posting code and algorithms is a clear prior restriction on protected speech and unconstitutional unless the government can demonstrate compelling interest and narrow coordination.” Coin Center revealed.
Coin Center asked lawmakers to consider previous legislation that proposed a two-year moratorium on these types of tokens instead of a complete and permanent ban on algorithmic stablecoins. The moratorium measures that form part of the Clarity for Payment Stablecoins Act introduced last year include: CoinCenter pointed out that it only prohibits future stablecoin activity and does not affect existing projects.
The group’s recommendations follow efforts by other cryptocurrency industry advocates to amend lawmakers’ latest stablecoin bill. Last Wednesday, the Blockchain Association (BA), a US-based blockchain advocacy group, offered to guide the development of the framework.
“The Blockchain Association stands ready to provide feedback based on the expertise of our members and looks forward to continuing an open dialogue with senators and their staff,” said BA CEO Kristin Smith. said Wednesday statement.
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