Report: US lawmakers' proposed stablecoin bill benefits issuers

A bill introduced by US senators Kirsten Gillibrand and Cynthia Lummis would benefit stablecoin issuers, according to a report by investment bank TD Cowen. The Lummis-Gillibrand Payment Stablecoin Act, introduced last week, would establish "clear rules of conduct" for stablecoin issuers, the bank said in a report on Monday.
TD Cowen Washington Research Group (led by Jaret Seiberg) said: "In our view, the Lummis-Gillibrand Act will be positive for stablecoin issuers, as it will establish clear rules of conduct. It is also of symbolic importance to the cryptocurrency industry as a whole, as it will be the first constructive cryptocurrency legislation introduced by Congress." If passed, the bill would require stablecoin issuers to hold one-to-one cash or equivalent cash reserves to back their tokens. The bill also bans algorithmic stablecoins and stipulates that issuers and users cannot use stablecoins for illegal or unauthorized purposes, such as money laundering.