US Senator Cynthia Lummis, a vocal crypto supporter, said on Wednesday that stablecoins should be backed entirely by cash.
Referring to “new risks” to the US economy, Lummis said any regulatory framework for stablecoins should be established and these assets should be backed by 100 percent cash assets, similar to a money market mutual fund. “Stablecoins should be backed by 100% cash and cash equivalents, and this should be audited regularly,” he said.
“Stablecoins can only be used by depository institutions or money market funds etc. may need to be removed by means of tools”
Bitcoin owner Lummis, one of the most outspoken crypto advocates in the Senate, added that stablecoins must comply with all relevant money laundering and sanctions laws. Only as long as these regulatory issues can be resolved, Lummis said, can he be optimistic about the role of stablecoins in the US economy.
“Stablecoins have an important role to play in progress.”
In fact, stablecoins have been a topic of discussion in the US for a while. The US Treasury Department is expected to release a stablecoin report in the coming weeks. It is curious what kind of statements will be made about these digital assets in this report.
Last month, Lummis delighted the crypto community when he helped propose a critical change to a controversial infrastructure bill. While the change was ultimately blocked, it received applause from the crypto community.