The Week In Crypto Policy: Lummis-Gillibrand Stablecoin Bill; HFSC Markup

Key Insights

• Senators Cynthia Lummis (R-WY) and Kirsten Gillibrand (D-NY) introduced a comprehensive stablecoin bill that would establish a framework for banks and trust companies to issue stablecoins, set reserve and disclosure requirements, and outline roles for state and federal regulators.
• The House Financial Services Committee advanced several bills out of committee by a party-line vote, including the Financial Services Innovation Act, which would allow companies offering innovative financial products or services to operate under tailored regulatory frameworks.
• Senator Elizabeth Warren (D-MA) fired off another letter raising illicit finance concerns, this time urging Secretary Yellen to oppose any stablecoin legislation unless it applies AML/CFT requirements "to the entire digital asset ecosystem, including payment intermediaries such as miners and validators."

Lummis-Gillibrand Payment Stablecoin Act

On Wednesday, Senators Cynthia Lummis (R-WY) and Kirsten Gillibrand (D-NY) introduced a comprehensive, revamped stablecoin proposal.

TLDR: The bill provides a pathway for banks and trust companies to issue stablecoins, establishes reserve and disclosure requirements, outlines roles for state and federal regulators, provides a framework for the FDIC to wind down failed issuers, largely bans algorithmic stablecoins, and clarifies that issuers are subject to the Bank Secrecy Act.