Terra catastrophe fuels Work in Congress on stablecoin legislation
Legislators are being dragged into the crypto orbit as Terra and Luna swirl around each other.
Stablecoins have been a top legislative objective in the United States since November of last year. Congress is now confronted with the problem of algorithmic stablecoins as a result of TerraUSD’s recent fall.
That algorithmic stablecoins are by far the most dangerous is shown here “the law professor and crypto-legislator Rohan Grey, told The Block that he has written multiple pieces of crypto legislation.
Chair of the House Financial Services Committee, Maxine Waters (D-CA), is rumoured to be working on crypto legislation that might be released before the conclusion of the current Congress.
Stephen Lynch (D-MA) confirmed to The Block that his ECash bill would be included in the bundle of legislation. In response to a question on algorithmic stablecoins, he stated: “It’s going to have to, right? ” That’s where we’re having the most difficulty.” Terra, he added, “hurts the rest of the business.” “That has eroded trust in stablecoins as a whole.”
Lynch noted that the details were still up for debate. In his remarks, he alluded to a prospective legislative framework proposed by Rep. Josh Gottheimer (D-NJ). With Josh Gottheimer’s Stablecoin Innovation and Protection Act, the President’s Working Group’s recommendation to restrict stablecoin issuance to insured depository institutions — primarily banks — has been codified into legislation. Nevertheless, algorithmic stablecoins were purposefully omitted by the PWG and Gottheimer.
The STABLE Act, introduced at the close of the previous legislature, did not include such a carve-out and had little chance of becoming law. He disagrees with PWG’s division between algorithmic and non-algorithmic stable currencies, which Grey is one of the writers of the bill.
Grey: “It establishes a misleading separation between algorithmic stablecoins and others.” They’re all expressing the same thing, but they’re all stating it in various ways. “