CEOs of Crypto Industry told US Congress Stablecoins Boost Dollar

The House Committee on Financial Services held a positive and encouraging hearing in the US Congress on the topic “Digital Assets and the Future of Finance”. 

The House Committee on Financial Services held a hearing in the US Congress on the topic “Digital Assets and the Future of Finance”. The hearing, hosted by Chairwoman Maxine Waters, was attended by the most notable executives of the cryptocurrency industry. 

The executives who gave their testimonies in the congressional hearing, live-streamed on YouTube, include:

  • Circle CEO Jeremy Allaire
  • Bitfury CEO Brian Brooks
  • Paxos CEO Charles Cascarilla
  • Coinbase CFO Alesia Haas
  • FTX CEO Sam Bankman-Fried
  • Stellar CEO Denelle Dixon

The most widely discussed topic during the hearing was stablecoins or tokens that are price pegged to US Dollars or other fiat currencies. The firms that are responsible for various stablecoins include the behemoths such as Circle, Coinbase, and Paxos. While Circle and Coinbase are responsible for USDC (USD Coin), Paxos is responsible for USDP (Paxos Dollar). 

While speaking his mind, Circle CEO Jeremy Allaire emphasized that stablecoins may actually help US Dollar to dominate instead of causing harm. He went on to argue that the dominance of US Dollar pegged stablecoins will continue despite the emergence of the Chinese central bank-issued digital Yuan. While “trillions of dollars of transactions” have been carried out on US Dollar pegged stablecoins, “only $10 billion worth of transactions so far” have been carried out in the case of China’s digital yuan. 

Allaire went on to emphasize that the regulators must support US stablecoins as a “national security priority”. He underscored that the crypto industry in the United States plays a critical and strategic role. 

In his testimony, Brian Brooks (the CEO of Bitfury and ex-OCC chair) agreed with Allaire. He stressed the fact that US-Dollar pegged stablecoins can help US Dollar to become more utility-driven (especially at a time when inflation is rising) in place of “a monetary system created after World War II.” The Bitfury CEO argued that the online nature of the US Dollar pegged stablecoins will help the American fiat currency to “compete on features, not only on history.”

Paxos CEO Charles Cascarilla, in his testimony, said that “stablecoins are “backed by money sitting in FDIC-insured bank accounts or money sitting in Treasury bills”, which means that “no risk of a run” is there. While explaining further, Cascarilla said:

“It’s liquid cash, and you have tokenized a dollar. There is very good utility for such assets.”

While responding to the criticisms that stablecoins could be used for illicit activities, FTX CEO Sam Bankman-Fried responded by saying that “advanced policies are already in place” and the KYC/AML procedures of the “digital asset industry has a pretty strong standard.” Coinbase CFO Alesia Haas and Stellar CEO Denelle Dixon noted in their respective testimonies that stablecoins can immensely help the unbanked. 

Reports say that the general outcome of the Congressional discussion was positive and encouraging for the crypto industry.  The head of the Blockchain Association, Jake Chervinsky, called the discussion “the most positive, constructive, and bipartisan public event on crypto.”

While calling the crypto sector the “next generation of the internet”, a Committee ranking member Patrick McHenry opined that the US Congress should regulate the burgeoning cryptocurrency sector in a non-partisan way.