- Wyoming Republican Sen. Cynthia Lummis mentioned Wednesday that stablecoins needs to be absolutely backed by money.
- She mentioned that any regulatory framework for stablecoins would require full cash-backing, much like a cash market mutual fund.
- The bitcoin holder and outspoken crypto proponent added that stablecoins ought to observe anti-money laundering and sanctions legal guidelines.
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Wyoming Republican Sen. Cynthia Lummis, a vocal crypto supporter, mentioned Wednesday that stablecoins needs to be absolutely backed by money.
Citing “novel dangers” to the US financial system, she mentioned on the Senate floor that any regulatory framework for stablecoins might want to require full cash-backing, much like a cash market mutual fund.
“Stablecoins have to be 100% backed by money and money equivalents, and this needs to be audited recurrently,” she mentioned. “It might be the case that stablecoins ought to solely be issued by depository establishments or by cash market funds or related automobiles.”
Some stablecoins like tether and USD coin have generated controversy over whether or not their money reserves are protected sufficient for a cryptocurrency supposedly equal to a greenback.
Lummis, a bitcoin holder who has been one of the vital outspoken crypto proponents within the Senate, added that stablecoins ought to observe all related anti-money laundering and sanctions legal guidelines.
However so long as these regulatory points will be sorted out, Lummis expressed bullishness on the position of stablecoins within the US financial system.
“Correctly supervised, stablecoins usually are not tantamount to the so-called wildcat banks of the nineteenth century,” she mentioned. “Stablecoins have an necessary position to play shifting ahead.”
Final month, Lummis delighted crypto watchers when she helped propose a critical amendment to an infrastructure bill that fixed what critics referred to as a very broad definition of crypto “brokers.” Although the modification was finally scuppered, she received plaudits from crypto insiders.
“With out [Lummis’s] modification, the US will spend tons of of hundreds of thousands amassing info on transactions that might by no means generate precise tax income,” Marco Santori, Kraken’s chief authorized officer, advised Insider beforehand.