U.S. Senators Cynthia Lummis (R-WY), who is on the Senate Banking Committee, and Kirsten Gillibrand (D-NY), who is on the Senate Agriculture Committee, introduced bipartisan legislation to create a regulatory framework for stablecoins. 

The legislation, named the Lummis-Gillibrand Payment Stablecoin Act, aims to protect consumers with “one-to-one reserve requirements” to ensure stablecoins are backed by cash equivalents and by limiting U.S.-approved issuers to only “issue dollar-backed stablecoins.”

The bill blocks all unauthorized use of stablecoins by users and issuers and calls for legislation to “harmonize global rules for dollar-denominated stablecoins,” preventing other countries from “writing rules for the dollar.”

The Lummis-Gillibrand Payment Stablecoin Act upholds the current dual banking system. 

“In order to meet the growing demand for our ever-evolving financial industry, we need to craft legislation that strikes the careful balance of establishing a clear and workable framework for stablecoins while protecting consumers,” said Lummis. 

“Passing a regulatory framework for stablecoins is absolutely critical to maintaining the U.S. dollar’s dominance, promoting responsible innovation, protecting consumers and cracking down on money laundering and illicit finance,” Gillibrand said.