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House Stablecoin Bill to Seek Two-year Ban on Issuing New Algorithmic Stablecoins

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Bloomberg reported Wednesday that legislation to regulate stablecoins being drafted in the U.S. House of Representatives would impose a two-year ban on new algorithmic stablecoins similar to TerraUSD (UST).

The latest version of the act defines «endogenously collateralized stablecoins» and makes it illegal to issue or create such stablecoins.

The definition would apply to publicly selling stablecoins that are capable of being exchanged, redeemed, or repurchased for a fixed amount of monetary value and that maintain their fixed price solely on the value of another digital asset from the same creator.

The bill provides a two-year grace period for stablecoin operators not collateralized by cash or highly liquid assets such as U.S.

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