US senators Cynthia Lummis and Kirsten Gillibrand have introduced bipartisan legislation to establish clear regulations for payment stablecoins, known as the Lummis-Gillibrand Payments Stablecoin Act.

The aim is to safeguard consumers, foster innovation, and uphold the dominance of the US dollar while maintaining the dual banking system. Senator Lummis emphasized that the bill maintains the existing banking system while implementing safeguards to protect consumers and prevent illicit financial activities, all while fostering innovation.

This proposed law addresses the operational framework for stablecoins within the US, focusing on reserve requirements for issuers and operational guidelines. It mandates that issuers must be registered non-depository trust institutions or authorized depository institutions. Additionally, it requires stablecoin issuers to maintain full dollar backing, limits stablecoin issuance by non-depository trust companies to $10 billion, and establishes a receivership regime with the FDIC to ensure customer fund security.

Senator Gillibrand highlighted that these measures ensure consumer protection, prohibit algorithmic stablecoins, and enforce compliance with US anti-money laundering and sanctions regulations.