Connect with us
Active Currencies 14791
Market Cap $2,469,545,528,576.10
Bitcoin Share 51.84%
24h Market Cap Change $-2.13

U.S. behind in stablecoin regulation? Former CFTC execs weigh in

2min Read

Explore how growing stablecoin adoption clashes with complex US regulations, spotlighting Tether’s regulatory influence.

US Stablecoin Adoption

Share this article

  • Stablecoin adoption grows, but complex US regulations hinder progress.
  • Tether’s influence raises concerns about US regulatory and taxation disparity.

The United States economy has witnessed a sea change in sentiment regarding cryptocurrency. Starting with the approval of spot Bitcoin [BTC] ETFs, followed by the preliminary approval of Ethereum [ETH] ETFs, and now the crypto-influenced presidential election.

All these events highlight the US’s softening approach towards the industry. Amidst these dynamic changes, one question arises: How will these shifts affect stablecoins? 

In the recent ‘Unchained’ podcast, former CFTC chief innovation officer Daniel Gorfine emphasized that U.S.-backed stablecoins offer a key opportunity for the U.S. to strengthen its financial dominance.

However, he noted that the U.S. has been slow to develop federal regulations for stablecoins. He said, 

“There are many global jurisdictions that are moving forward with rules and standards around stablecoins including dollar-backed stablecoins and that will happen before the US does anything at the federal level.” 

Additionally, defying the risks cryptocurrencies bring to the financial system, Gorfine underlined that it’s Bitcoin that initiated discussions about new financial infrastructures, including stablecoins and CBDCs.

The need for stablecoins

In fact, since cryptocurrencies like Bitcoin are highly volatile, it’s stablecoins that come to the rescue. Their value remains stable as they are pegged to fiat currencies like the U.S. dollar, making them dependable digital assets. 

Needless to say, the growing adoption of these coins is evident as big industry players like Stripe and PayPal have started accepting stablecoins, such as USDC, for mainstream payment functions. 

Adding to the fray, Former CFTC chairman Chris Giancarlo in the same conversation noted, 

“I find stablecoins to be potentially a great way to satisfy an unmet global demand for dollar exposure.” 

These discussions emphasize stablecoins’ capacity to shake up traditional payments and protect the US dollar’s global standing.

However, if we look at the flip side of the story, the complex US regulatory landscape presents hurdles for stablecoin expansion. 

US’s regulatory framework in question

Thus, by proposing the use of the dual banking system model, which involves both state and federal regulatory oversight, Gorfine added, 

“This shouldn’t be as complicated as we’re making it…I think we could create coherent oversight of stable coin issuers quite readily.” 

While countries like Singapore efficiently license US dollar-based stablecoin issuers, the US still struggles with establishing a coherent regulatory framework for its own currency.

Share

Ishika is a graduate of Political Science from the University of Delhi. From writing content as a hobby to now pursuing it as a professional career, she has been living and breathing content all her life. Her interests lie in making sure articles are very digestible to a common reader, despite all its technicalities and jargons.
Read the best crypto stories of the day in less than 5 minutes
Subscribe to get it daily in your inbox.
Please check the format of your first name and/or email address.

Thank you for subscribing to Unhashed.