According to Coin Center, the proposed stablecoin legislation by Senators Cynthia Lummis and Kirsten Gillibrand could potentially be deemed unconstitutional because it forbids the use of algorithmic stablecoins.
In a recent blog post, Coin Center, a non-profit organization promoting cryptocurrency, expressed concern over a proposed stablecoin regulatory bill. They argued that instead of fostering innovation, the bill would actually hinder it by forbidding all algorithmic model designs. Effectively, this could infringe upon First Amendment rights in the United States.
The crypto research organization based in Washington raised warnings about a proposed law, expressing worries over its possible effects on technological advancements and free speech. They pointed out that banning algorithmic models outright could impede the growth of the cryptocurrency sector. Furthermore, they argued that such a move would not only be detrimental to good governance but also unconstitutional.
Prohibiting individuals from sharing code and algorithms amounts to an unwarranted restriction on protected speech. It’s unconstitutional unless the government presents a strong justification and carefully limits its application.
Coin Center
In response to Senators Cynthia Lummis and Kirsten Gillibrand’s bill proposing regulations for stablecoins, Coin Center issued a statement. The legislation has been commended for bringing clarity to the stablecoin industry but criticized for its restrictive measures towards certain models.
The New York State Department of Financial Services and the Federal Reserve collaborated to create the legislation for this bill. As mentioned in its content, those who issue stablecoins are required to maintain an equal value of cash or its equivalents as collateral. Furthermore, the bill puts a stop to unsupported algorithmic stablecoins from being released within the U.S. market. Instead, only dollar-backed stablecoins will be approved by the regulatory bodies.
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2024-04-22 12:03