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Timothy Massad – the former Chairman of the Commodity Futures Trading Commission (CFTC) – asserts that the US government ought to cease overlooking stablecoins, as they have the potential to enhance the domestic payment system.
Other countries, including the United Kingdom, have already initiated efforts to establish comprehensive regulations for such financial instruments.
The US Should Alter its Approach
In a recent discussion with CNBC, Massad pointed out that American regulators are making an error by excluding stablecoins from their regulatory framework rather than incorporating them into their oversight.
He believes these financial products could introduce essential competition, provided that the government addresses the associated risks. The former CFTC Chairman further characterized stablecoins as a possible link between “the crypto world and the real world.”
“My concern is we’re not addressing the risks. I think our regulators often take the view that, well, it’s better just to try to keep them out of the regulatory perimeter, but I don’t think that really works, and I think, you know, the competition from stablecoins could be useful, again, if we address the risks, and they are significant,” he stated.
Timothy Massad, Source: The Wall Street Journal
Massad also asserted that stablecoins should be regarded as a payment method rather than an “investment vehicle.” He believes they could offer the United States certain advantages, such as enhancing its payment infrastructure:
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“Most of us think of the payment system and say it seems to be fine: I’ve got credit cards, I’ve got mobile banking, what do we need anything else for? The truth is the US system is slower and more expensive than what other countries have developed all over the world.”
He subsequently emphasized that government officials who oppose stablecoins should take the time to comprehend their use cases rather than criticize them:
“I’m sympathetic to a lot of people in government saying… we’re not convinced of the use case here, we don’t really see what the value is in the real world. But, you know, sometimes it takes time to really discover that.”
If the US Acts, Others Will Follow
Massad also contended that if US regulators were to implement stablecoin regulations, it is likely that other nations would follow suit.
It is noteworthy that various regions within the leading economy have already proposed potential legislation concerning these financial products. For instance, lawmakers in New York suggested certain amendments in May of this year that could allow residents to pay bail bonds using stablecoins instead of dollars. However, they did not specify which assets would be included in the anticipated bill.
Jerome Powell (Chairman of the Federal Reserve) recently stated that stablecoins represent a “form of money” over which the central bank should exert some authority.
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