During the last century, the United States reigned like the economic superpower of the world. The key to this sustained economic power is a regulatory environment that encourages and allows technological innovation. From semiconductors to personal computers via Internet 1.0 and 2.0, American companies have led to developing advanced technologies because our country empowers its manufacturers and creators. Unfortunately, with regard to web3 – the next generation of the Internet built on the blockchain, digital assets and cryptocurrencies – we are lagging behind and risks late.
In 2023, the European Union adopted complete regulation of cryptocurrencies [americanbar.org]And many significant provisions have entered into force last summer. The Chinese Central Bank has promoted its digital yuan [forbes.com]which threatens the role of the US dollar as a global reserve currency. The United States is just watching, while our opponents move parts on the champion.
It is absolutely essential in the future of our country that the United States adopts clear and sensitive cryptocurrency regulations that promote innovation and maintain web3 jobs within our borders, protect consumers and maintain the domination of the US dollar.
We should start with stablecoins.
For newcomers, stablecoins are cryptocurrencies whose values are set for national currencies or high quality financial assets. This gives them stability and allows them to play a crucial role in the digital economy, where they combine the speed of transaction and the low cost of digital assets with the price stability of traditional reserve currencies. The United States is already playing a major role in this space. According to a report, more than 95% of stablecoins are “linked to the US dollar”.
The many cases of use of stablecoins have earned them the support of political decision -makers through the ideological spectrum. Conservatives appreciate their low -cost payment capacities, without friction and instantaneous, which can reduce costs on traders and consumers and stimulate startups and economic activity. Progressives appreciate their use to reduce the cost of funding from funds and reach the sub-bauries and the poorly served, and their ability to increase access to basic financial services.
It must be recognized that, as for any new technology, stablecoins have challenges. Some stablecoins, supported by complex algorithms instead of a stable reserve currency, collapsed due to design defects. In addition, unlike bank deposits, stablecoins are not provided by the FDIC, creating risks if the transmitter is bankrupt. Although the concerns have been raised about money laundering, stablecoins are not more badly used for this purpose than traditional money. But for the public to have confidence in the stablecoins, and so that companies adopt them, we need clear regulations to provide consumer protection, govern issuers and protect themselves against money laundering.
The Bipartite Guidance and Establishment of National Innovation for American Stables (Engineering),, that I presented on February 4 alongside the Senators Bill Hagerty, Cynthia Lummis and Tim Scott, will fall under these challenges and create a clear regulatory environment which allows the cryptocurrency environment to thrive.
It protects consumers by holding stable transmitters to strict reserve requirements, forcing them to maintain individual cash and cash reserves. The bill prohibits the issuance of non -sustained algorithmic stables, the collapse of which has led to substantial losses. To respond to their use for illicit purposes, it forces stable-orable issuers to comply with the rules for whitening and American sanctions. Finally, the bill clarifies the rules concerning the supervision and the procedure if a stablecoin transmitter experiences insolvency.
Although this bill is undoubtedly modified as it crosses the congress, it has already received the comments of a large band of stakeholders, in particular participants in industry, university experts and federal regulators. It is a real bipartite effort that will allow innovators and manufacturers while simultaneously eliminating bad players.
Putting the foundations for the next century American exceptionalism is a mission that should unite us all, and positioning the United States at the forefront of the next internet iteration is the key to this objective. Stablecoins are already playing an important role, and it is essential that we act now to maintain our position as a leader in global economic competitiveness.
