New U.S. Draft Bill Could Potentially Ban Algorithmic Stablecoins
Key Takeaways The legislation would criminalize the creation or issuance of new “endogenously collateralized stablecoins.” The draft bill grants a grace period of two years for existing algorithmic stablecoin providers to change their models. Leaders of the House Financial Services Committee in the United States House of Representatives have now come up with draft legislation that could potentially place a two-year ban on new algorithmic stablecoins. An algorithmic stablecoin is a type of crypto asset that relies on two types of tokens: a stablecoin and another crypto asset supporting the aforementioned stablecoin. As per the bill’s current draft, the legislation…