A panel of experts said at a House hearing on Tuesday,The U.S. needs to regulate the existing stablecoin market or create its own, Fed-backed digital currency to maintain the dollar’s dominance.The U.S. Treasury Department reiterated in a report last week that the U.S. needs to build guardrails for privately-issued stablecoins to protect the financial system and consumers. The report also called for further research into a digital dollar, or central bank digital currency, in case “needs of the national interest”.
The report is one of those required in the March Digital Assets Executive Order.
At a House Financial Services Committee hearing on Tuesday, experts including researchers and executives from blockchain analysis firms agreed,The U.S. needs to make progress in regulating stablecoins or issuing its own central bank digital currency to maintain the dollar’s dominance and keep sanctions on other countries effective.
However, there is debate as to which option would best help the United States maintain its position in the global financial system.
Blockchain analytics firm TRM Labs Inc. Fiat-backed stablecoins are 99 percent pegged to the U.S. dollar, said Ari Redbord, director of legal and government affairs, which “gives us a unique opportunity to export our values and principles abroad through folk technology.” He called for regulation policies to promote the growth and stability of this market.
The leaders of the House Financial Services Committee have been working with the Biden administration to draft legislation to regulate stablecoins.
Further research and development of a central bank digital currency could take years, the Treasury said. But Redbord said private stablecoins already exist and thrive globally.
Others, such as Carla Norrlöf, a visiting senior fellow at the Atlantic Council’s Center for Geoeconomics, emphasized the importance of making progress on a U.S. central bank digital currency.