Stablecoin Bill Spells ‘Disaster’ for Consumers, Allen Says

As Congressional stablecoin legislation designed to legitimize and clarify many aspects of the mostly fiat-backed coins moves along, it’s drawing cheers from the crypto industry — and criticism from the traditional finance world.

The 179-page bill was introduced by Senators Kirsten Gillibrand (D-NY) and Cynthia Lummis (R-WY) last week amid a renewed push to pass such legislation as soon as next month. The bill bans so-called algorithmic stablecoins, which aren’t backed by full fiat reserves. It also creates a mechanism for FDIC conservatorship and resolution if an issuer becomes insolvent.

Many of the measures introduced in this version and ...