US stablecoin bill would ban new stablecoin algos for 2 years

It has been reported that the bill definition will cover "endogenously backed stablecoins", which depend on the value of a crypto -currency attached from the same creator for this one to maintain a stable price.

A bill in the US House of Representatives would impose a two-year ban on new algorithmic stablecoins such as TerraClassicUSD (USTC) that broke away from the US dollar earlier this year, causing widespread contagion of the crypto market.

The bill would criminalize the creation or issuance of new “endogenously backed stablecoins,” according to a current bill obtained by Bloomberg.

However, the legislation provides a two-year grace period for existing algorithmic stablecoin providers to change their models and guarantee their offering differently.

The definition would cover stablecoins that depend on the value of another virtual asset from the same creator to maintain its price and are marketed as having the ability to be converted, redeemed, or otherwise exchanged for a fixed price.

The bill raises concerns as to whether stablecoins such as Synthetix USD (SUSD) would be covered by the definition, as they are currently backed by the native asset of the same protocol in the SNX token. Other algo-stablecoins with a similar structure include BitUSD which is backed by BitShares (BTS).

Those well-educated in crypto understand that Terra does not represent all stablecoins, Celsius was not DeFi, 3AC had nothing to do with technology, etc.< /p>

But as with all things, addressing these nuances is much more difficult than simply saying “crypto bad, regulate it to death”.

The bill also directs the U.S. Treasury to undertake a study of