Two-Year Ban on Algorithmic Stablecoins?

Stablecoin Bill seeks Fed and State Regulatory Approval

The House Financial Services Committee to vote next week on a bill regulating stablecoins.

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More specifically, the bill proposes to completely ban algorithmic stablecoins like TerraUSD for two years.

The TerraUSD stablecoin experienced a severe crash earlier this year in May 2022, eroding investor wealth by over $40 billion.

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Since then regulators are keeping a close eye on and monitoring collateralized stablecoins.

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Non-bank issuers of fiat-backed stablecoins are also overseen by state banking regulators and the Federal Reserve.

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As reported by CoinGape, the latest version of the bill says it is illegal to create and issue new bills “endogenously collateralized stablecoins”.

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Also, issuing stablecoins without these regulatory approvals can result in up to five years in prison and a $1 million fine.

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