Coin Center Warns Stablecoin Bill Risks Free Speech

Coin Center opposes the Lummis-Gillibrand Payment Stablecoin Act, arguing it infringes on constitutional rights by targeting stablecoins.

Coin Center, an organization that advocates for digital currencies, has voiced its vehement opposition to the Lummis-Gillibrand Payment Stablecoin Act, stating that it “would impermissibly infringe upon constitutional rights.”

Senators Kirsten Gillibrand and Cynthia Lummis support the bill, which aims to regulate the payment of stablecoins. The bill is a nonpartisan effort.

Coin Center, a lobbying organization asserts that the bill’s prohibition on algorithmic stablecoins would constitute a breach of the First Amendment because it would target the code that makes up digital assets for prohibition.

The move to regulate stablecoins was met with approval by Jerry Brito, who serves as the director of the Coin Center. Noting that there is potential for the development of innovation within a defined legislative framework, he made the observation that there are opportunities.

Specifically, the measure mandates that only institutions that have been adopted in the United States are permitted to issue a dollar stablecoin. According to Coin Center, the law is not a prohibition but rather an opportunity for issuers of stablecoins to register with the Securities and Exchange Commission (SEC).

Coin Center Critiques Senate’s Stablecoin Regulation Approach

Recent legislative efforts to establish specific guidelines for their implementation have focused on stablecoins. TerraUSD’s inability to maintain a constant exchange rate with the dollar throughout the entire process led to this decision.

The market for cryptocurrencies had a substantial depression in 2022 as a direct result of this incident. Furthermore, it resulted in the filing of bankruptcy petitions and additional investigations by a regulatory agency in the United States, as well as some local law enforcement agencies.

Coin Center clarified the differences between the Senate reform proposal and other proposals presented in the House. Another strategy is presented by the Stablecoins Act, which is currently being voted on by the House.

Instead of a complete prohibition, it would be preferable to consider imposing a moratorium on algorithmic stablecoins for a period of two years. Coin Center is of the opinion that this strategy encompasses a more feasible objective and shows an aspiration for advancement.

This step directly contradicts the Senate’s more stringent measures, indicating ongoing discussions about crypto oversight in this location. Coin Center has recommended the flexible registration of cryptocurrencies to ensure development while also preserving compliance with legislation.

From this perspective, the existing securities regulatory system is sufficient to address the potential risks posed by stablecoins. Coin Center advocates for the inclusion of new products within the existing regulations.

Through this method, innovation will flourish while the protection of consumers and the integrity of the market will be preserved. Additionally, Senator Sherrod Brown, who serves as the Chair of the Senate Banking Committee, has indicated that he is interested in pursuing a law on stablecoins.

He expressed that addressing his fears would be essential in order to proceed with the process. On the other hand, the House of Representatives has not scheduled the Clarity for Payment Stablecoins Act for a vote on the floor yet.

This uncertainty complicates the process of developing a consistent regulatory framework for stablecoins in the United States.