Stablecoin legislation accused of infringing upon freedom of speech by crypto advocacy organization

Coin Center, a cryptocurrency advocacy organization based in the United States, has raised concerns about a bill introduced in the Senate to regulate payment stablecoins. In a notice issued on April 19, Coin Center criticized the Lummis-Gillibrand Payment Stablecoin Act, proposed by Senators Kirsten Gillibrand and Cynthia Lummis, stating that it would be “bad policy” and unconstitutional due to its ban on algorithmic stablecoins. The group argued that prohibiting these stablecoins would essentially target the underlying code, which could be considered a violation of the First Amendment’s protections. Coin Center emphasized that while it may be reasonable to require issuers of products like Terra to register with the Securities and Exchange Commission (SEC) and provide appropriate disclosures, an outright ban on a specific business model is unnecessary and stifles innovation. Coin Center Executive Director Jerry Brito supported the effort to establish a regulatory framework for stablecoins in the U.S., but highlighted that the proposed bill only permits U.S.-approved issuers to issue stablecoins backed by the U.S. dollar. Coin Center also noted that the Clarity for Payment Stablecoins Act, which is set for a full vote in the House, takes a more reasonable approach to algorithmic stablecoins by proposing a two-year moratorium instead of an outright ban. The organization highlighted that stablecoin legislation is being pursued by lawmakers in both the House of Representatives and the Senate. Coin Center’s concerns about the Lummis-Gillibrand bill align with Senator Sherrod Brown’s statement that a stablecoin bill would be a priority for him in the legislative session, as long as his concerns were addressed. At the time of publication, there were no plans to schedule the Clarity for Payment Stablecoins Act for a floor vote in the House. The article also mentions the depegging of TerraUSD (UST) from the U.S. dollar as a contributing factor to a crypto market downturn in 2022, leading to bankruptcies and legal action against individuals involved in illicit activities.