US legislation would temporarily ban algorithmic stablecoins like Terra

Bloomberg, which obtained a copy of the proposed stablecoin bill, reported that stablecoin legislation being drafted in the House would place a two-year ban on crypto coins similar to TerraUSD, the algorithmic stablecoin that collapsed earlier this year.

It would be illegal to issue or create ‘endogenously collateralized stablecoins’ that rely solely on the value of another digital asset from the same creator to maintain their fixed price.