United States Senators Kirsten Gillibrand and Cynthia Lummis have introduced legislation establishing a regulatory framework for payment stablecoins.

The legislation aims to prohibit “unbacked, algorithmic stablecoins”— likely a nod to TerraUSD (UST) depegging from the U.S. dollar in 2022 — and requires issuers to maintain one-to-one reserves.

It will also “create federal and state regulatory regimes for stablecoin issuers that preserves the dual banking system.”

According to the text of the 179-page bill, state non-depository trust companies would be allowed to issue up to $10 billion in payment stablecoins, with authorized institutions able to issue stablecoins “up to any amount” under a limited-purpose state charter.

The legislation also aimed to uphold the current system of state and federal charters and established rules on custody for non-depository trust companies.

Advocacy group Coin Center has expressed concerns about the bill, claiming it would be “bad policy” and unconstitutional for its proposed prohibition on algorithmic stablecoins.

The group argued that banning algorithmic stablecoins targets code, which could be an unconstitutional act under the protections of the First Amendment.

Coin Center suggested that the Clarity for Payment Stablecoins Act — a bill set for a full floor vote in the U.S. House of Representatives — had a “not unreasonable” approach to algorithmic stablecoins by proposing a two-year moratorium rather than an outright ban.

Canada transits to international crypto tax reporting standard

Canada expects to apply the international Crypto-Asset Reporting Framework (CARF) for taxation by 2026. The country is getting an early start on the new standard, expected to be observed by 47 countries by 2027. 

The CARF would impose new reporting requirements on crypto asset service providers (CASPs), such as cryptocurrency exchanges, crypto asset brokers and dealers and crypto-asset automated teller machine operators, whether they are individuals or business entities.

CASPs would be required to report transactions between crypto assets and fiat and crypto assets for other crypto assets to the Canada Revenue Agency. Crypto asset transfers carried out by CASPs, including payment processing where the value exceeds $50,000, would also need to be reported.

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Arkansas wants to restrict crypto mining

An Arkansas Senate committee has passed two bills that could restrict cryptocurrency mining within the state. The bills lay the groundwork for further discussions.

In a Senate hearing on April 17, lawmakers sought to address general concerns such as noise reduction, foreign ownership and the proximity of crypto mines to residential areas.

The committee will continue to discuss the issue and hear more public comments. The discussion of whether and how much crypto mines should be regulated at the state level arose from the Arkansas Data Centers Act, which limited local government’s ability to regulate crypto mines.

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Binance returns to India, gets Dubai license

Binance crypto exchange is set to return to India after a four-month ban after paying a $2 million fine for noncompliance. 

It will be the second overseas exchange after KuCoin to mark a return to the country after India’s financial regulatory body blocked access to crypto exchanges for noncompliance.

Binance reportedly accounted for more than 90% of Indian crypto trading volume before its ban in January.

The company has also received its Dubai Virtual Asset Service Provider (VASP) license after co-founder Changpeng Zhao gave up his voting power in the exchange’s local entity.

The Virtual Assets Regulatory Authority’s final requirement for granting the VASP license was for Zhao to give up his voting power in Binance FZE, the Dubai-based unit of the exchange, according to unnamed people familiar with the matter.

While Binance’s current CEO, Richard Teng, confirmed receiving the license, he said that Zhao giving up his voting power was “pure speculation.”

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