Vance Spencer of Framework Ventures Critiques U.S. Stablecoin Proposal for Undermining Dollar Dominance

Vance Spencer, co-founder of the venture capital firm Framework Ventures, has expressed his opposition to the proposed U.S. stablecoin regulatory bill, contending that it could limit competition and negatively impact the nation’s economic interests.

His remarks are in reaction to the “Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act,” which Senator Bill Hagerty introduced on February 4.

The bill, supported by Senators Tim Scott, Kirsten Gillibrand, and Cynthia Lummis, is framed as part of an initiative to position the U.S. as a leader in cryptocurrency and to provide clear regulations for stablecoin issuers.

In a statement, Hagerty noted that stablecoins could stimulate demand for U.S. Treasuries and enhance transaction efficiency.

Vance Spencer Critiques Stablecoin Bill, Warns of U.S. Losing Global Advantage

However, Spencer raised concerns regarding provisions in the bill’s forthcoming markup that could restrict access to the Treasury market for internationally based centralized stablecoin issuers.

In a post on X, he described such measures as “batshit crazy” and accused U.S. financial entities of attempting to manipulate regulations to their advantage at the cost of national economic interests.

I don’t comment directly on regulation much but I want to highlight an emerging regulatory conflict that’s occurring in D.C.
The soon-to-be released stablecoin markup apparently has requirements to shut off access to the treasury market to centralized international stablecoin…

— Vance Spencer (@pythianism) February 24, 2025

“This is a blatant attempt at regulatory capture by U.S. players,” Spencer stated. “Please explain how restricting access to hundreds of billions of dollars of demand for Treasuries aids us in maintaining dollar hegemony globally, or addressing our debt issue.”

Spencer argued that the majority of stablecoin demand and growth is occurring outside the U.S. and that limiting foreign issuers would drive the industry further offshore.

He likened the situation to Europe’s approach to artificial intelligence regulation, suggesting that an overly restrictive stance could lead to the U.S. losing its standing in the global stablecoin market.

Spencer also referenced previous regulatory conflicts within the crypto sector, including resistance to regulations allegedly influenced by FTX in 2021, cautioning that the current stablecoin and market structure bills could have wider implications.

“We should not permit the largest players in crypto to dictate terms that benefit themselves at the expense of U.S. national interest and the broader industry,” he remarked.

The GENIUS Act remains in its initial stages, and discussions regarding its provisions are expected to persist as lawmakers and industry leaders consider its potential effects on the stablecoin market.

Lawmakers Advance U.S. Stablecoin Regulation as Debate Escalates

U.S. lawmakers have made a significant advancement toward stablecoin regulation with a new discussion draft released on February 7.

House Financial Services Committee Chairman French Hill and Digital Assets Subcommittee Chair Bryan Steil unveiled the 47-page proposal, seeking input from industry stakeholders.

The discussion draft provides details on establishing a clear regulatory framework for dollar-backed stablecoin payments to strengthen the USD’s status as the world’s reserve currency. #StablecoinBill #USDStablecoin #StablecoinRegulation https://t.co/jqmrndN4fE

— Cryptonews.com (@cryptonews) February 7, 2025

The draft aims to clarify stablecoin oversight at both federal and state levels while reinforcing the dollar’s role as the global reserve currency.

A significant provision includes a two-year prohibition on stablecoins solely backed by self-issued digital assets, pending further risk assessment.

The bill also requires a Treasury study on stablecoin reserves, technology, and economic impact, with a report expected within a year.

Federal Reserve Governor Christopher Waller has expressed support for stablecoins and emphasized the need for clear regulations to ensure stability and transparency, adding to the proposal’s credibility.

He underscored their potential advantages for international finance while advocating for oversight to verify reserves.

Despite the various support from key opinion leaders, the industry remains divided on its views regarding stablecoins and CBDCs, with some warning that excessive restrictions could undermine the U.S. position. As discussions progress, the next phase of stablecoin policy in the country depends on the draft bill.

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