The US Senators Lummis and Gillibrand lead a new legislation on Stablecoin


On a typical Wednesday in Washington, US Senators Cynthia Lummis and Kirsten Gillibrand took a significant step forward in the regulation of cryptocurrencies, introducing a new law focused on stablecoins. 

The law aims to establish clear guidelines for the issuance of digital assets with a nominal value in dollars, filling a critical gap in the rapidly evolving cryptocurrency market regulatory framework.

The essence of the US senators’ Stablecoin law

Stablecoins are digital currencies designed to maintain a stable value by being pegged to traditional assets, typically the US dollar. The main appeal of stablecoins, such as USDC and Tether, lies in their ability to provide stability in the volatile cryptocurrency market, making them an ideal tool for transactions and storing value. However, the lack of specific guidelines is a long-standing issue, posing risks for users and the financial system as a whole.

The bill proposed by Senators Lummis (R-Wyo.) and Gillibrand (D-N.Y.) aims to define who can issue these stablecoins and under what conditions. Focusing on payment stablecoins, the bill specifies that issuers must be non-depository trust companies registered with the Board of Governors of the Federal Reserve or authorized deposit institutions as national issuers of payment stablecoins.

One of the main features of the bill are the operational and reserve requirements it establishes for stablecoin issuers. These entities will have to ensure that their tokens are fully backed by reserves, a crucial measure to maintain trust and stability in the use of these digital assets. Furthermore, the bill imposes transparency, requiring issuers to disclose to the public the nature of their reserve activities.

In order to protect consumers and the financial system, the bill explicitly prohibits algorithmic stablecoins, which are typically undercollateralized and maintain their value through complex algorithms rather than physical assets. This type of stablecoin has been controversial due to their potential high volatility and systemic risks, highlighted by the collapse of projects like TerraUSD.

Strategic implications for the financial dominance of the United States

Senator Gillibrand emphasized the strategic importance of the law, noting that a well-regulated stablecoin market is crucial to maintain the dominance of the US dollar in the global economy. The law aims to preserve the current dual banking system and ensure compliance with strict anti-money laundering regulations and sanctions.

The bill also addresses the evolving needs of the financial sector by setting a limit of 10 billion dollars for the issuance of payment stablecoins by non-depository trust companies, after which they must be authorized as national issuers of payment stablecoins. This provision aims to balance innovation with the need to mitigate systemic risks, particularly from larger financial entities.

The path of this bill on stablecoins is crucial, as it represents one of the specific legislative texts for cryptocurrencies that are most likely to be enacted into law. Previous attempts by the Senate and the House to regulate stablecoins have encountered various obstacles, but the ongoing dialogue among legislators indicates a growing recognition of the need for legislative action.

Furthermore, debates on attaching regulations on stablecoins to broader legislation, which must be approved, such as the bill for the reauthorization of the Federal Aviation Administration, suggest that strategic legislative maneuvers may be employed to ensure the approval of these essential regulatory measures.


While Senators Lummis and Gillibrand push forward with their bill on stablecoins, the broader implications for the cryptocurrency market and the US financial system are significant. By establishing clear rules and protections, the bill aims to strengthen the credibility of digital currencies and ensure the stability and integrity of the US financial system. The coming months will be crucial in determining whether this legislative effort will finally align the innovative spirit of cryptocurrencies with the rigorous requirements of federal oversight.