An open letter to leading United States presidential candidates written by Paxos CEO Charles Cascarilla urges them to adopt stablecoins to maintain the US dollar’s global dominance and improve inefficiencies in the traditional banking system.
The next presidential administration could determine the United States’ future leadership in the global financial industry, Cascarilla wrote in an open letter published on Oct. 29.
Blockchain and stablecoins are “replatforming the financial system” to make it symbiotic with the internet, Cascarilla wrote. He stated:
“Stablecoins or digital dollars—U.S. dollars digitized via blockchain technology—are the crucial upgrade for the payment system that will revolutionize money movement, allow greater participation in the global economy and ensure the supremacy of the U.S. dollar for years to come.”
The letter comes a week before the US presidential election, which is becoming a focal point for crypto investors, as it could shape the regulatory landscape of the industry for the next four years.
Former President Donald Trump is considered the more crypto- and innovation-friendly candidate, who may promote less restrictive regulations than his opponent, Vice President Kamala Harris.
Related: China’s growing debt a great Bitcoin ‘buying opportunity’ — Arthur Hayes
The global financial system is “closed, outdated and inefficient”
Cascarilla compares the traditional financial system to the outdated efficiency of the post office, citing it as a reason to urge the future US president to consider stablecoins and blockchain technology to address these inefficiencies.
He wrote in the open letter:
“The global financial system is closed, outdated and inefficient. This industry is vital to the U.S., yet it operates at the speed of the post office while the rest of the economy has rapidly innovated by successfully using technology and the internet.”
Over 20% of the US population and 40% of the global population remain unbanked or underbanked, meaning that they are unable to access traditional banking services like loans and savings accounts, data from the Federal Reserve and World Bank shows.
Cascarilla argues that blockchain technology can offer easier access to financial services for anyone with a smartphone or computer and internet access, especially in areas lacking banking infrastructure.
Related: Bhutan gov’t moves $66M of Bitcoin stash to Binance as price tops $71K
Is the EU really ahead of the US in crypto and stablecoin regulation?
Some investors worry that the US may be falling behind with crypto regulations, considering that Europe’s Markets in Crypto-Assets Regulation (MiCA) is about to go into effect as the first comprehensive regulatory crypto framework worldwide.
While this is a big development for the crypto industry, MiCA’s rules introduce “systemic” banking risks for stablecoins, according to Paolo Ardoino, the CEO of Tether, the world’s largest stablecoin issuer.
Ardoino shared his concerns with Cointelegraph during an interview at Plan B Lugano in Switzerland:
“If you have 10 billion euros under management, you have to put 6 billion euros in cash deposits. That is 60% of 10 billion euros. We know that banks can lend out 90% of their balance sheet. So of the 6 billion euros, they lend out 5.4 billion euros to people […] 600 million euros will remain in the bank balance sheet.”
[embedded content]
Tether’s Paolo Ardoino, interview with Cointelegraph’s Zoltan Vardai, clip 1. Source: YouTube
The MiCA-imposed bank reserve requirements will mean that a growing portion of stablecoin reserves will be held on bank balance sheets, raising significant implications if a bank were to go bankrupt.
Magazine: Microsoft set to vote on Bitcoin, Peter Todd hiding, and more: Hodler’s Digest, Oct. 20 – 26
Comments (No)