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Algorithmic Stablecoins Might See A Total Ban For Two Years

Written by: Qadir AK

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Qadir AK

Qadir Ak is the founder of Coinpedia. He has over a decade of experience writing about technology and has been covering the blockchain and cryptocurrency space since 2010. He has also interviewed a few prominent experts within the cryptocurrency space.

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Sep 21, 2022

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A new draft bill is under the way, proposing a complete two-year ban on algorithmic stablecoins like the TerraUSD. Next week, the House Financial Services Committee will be deciding the future of the bill, to regulate stablecoins, by voting. The regulators have been keeping a close watch on collateralized stablecoins ever since the TerraUSD stablecoin crash in May 2022 taking away more than $40 billion of investors’ money. 

The draft bill mentions that it would be illegal to create and issue new “endogenously collateralized stablecoins”. As per the draft, this would be including the stablecoins that depend entirely on other digital assets to maintain their value.

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