Report: Stablecoin bill proposed by US lawmakers is beneficial to issuers

According to a report from investment bank TD Cowen, a bill proposed by US Senators Kirsten Gillibrand and Cynthia Lummis will benefit stablecoin issuers. The "Lummis-Gillibrand Payment Stablecoin Act" introduced last week will establish "clear behavioral rules" for stablecoin issuers, the bank said in a report on Monday.

TD Cowen's Washington research group (led by Jaret Seiberg) said: "In our view, the Lummis-Gillibrand bill is positive for stablecoin issuers because it will establish clear behavioral rules. It also has symbolic importance for the overall cryptocurrency industry, as it will be the first constructive cryptocurrency legislation enacted by Congress." If the bill is passed, stablecoin issuers will be required to hold a one-to-one reserve of cash or equivalent cash to support their tokens. The bill also prohibits algorithmic stablecoins and stipulates that issuers and users cannot use stablecoins for illegal or unauthorized purposes, such as money laundering.