As a researcher with a background in both finance and technology, I find myself deeply intrigued by the open letter penned by Paxos CEO Charles Cascarilla to the leading U.S. presidential candidates. His call for the adoption of stablecoins and blockchain technology to modernize the financial system resonates strongly with my personal beliefs and professional experiences.
A letter penned by Charles Cascarilla, CEO of Paxos, is addressed to the leading presidential candidates in the United States. In this correspondence, he advocates for the adoption of stablecoins as a means to preserve the US dollar‘s global supremacy and address inefficiencies within the conventional banking system.
In a public letter published on October 29th, Cascarilla expressed that the incoming U.S. presidency has the power to shape America’s role as a leader in the international financial sector.
According to Cascarilla’s words, blockchain technology and stablecoins are “reshaping the financial system in a way that harmonizes it with the internet.
“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.”
In approximately a week, a letter arrives that has attracted considerable attention from cryptocurrency investors due to its potential impact on shaping the regulatory environment of the industry for the upcoming four-year period, given its proximity to the US presidential election.
Previously elected President Donald Trump is perceived as being more favorable towards cryptocurrencies and technological advancements, potentially advocating for lighter regulations compared to his competitor, Vice President Kamala Harris.
The global financial system is “closed, outdated and inefficient”
In simpler terms, Cascarilla argues that the current financial system is like an antiquated postal service, which he believes needs improvement. He suggests that the next U.S. president should take a closer look at stablecoins and blockchain technology as potential solutions to streamline these outdated systems.
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“The global financial system is closed, outdated and inefficient.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.”
Approximately a fifth of U.S. citizens and nearly half of the world’s population lack access to conventional banking services such as loans and savings accounts, according to data from the Federal Reserve and the World Bank. In other words, they are either unbanked or underbanked.
Cascarilla posits that the blockchain technology could provide simpler avenues for financial services utilization, particularly for individuals possessing a smartphone, computer, or internet connectivity – even in regions where traditional banking systems are scarce.
Is the EU really ahead of the US in crypto and stablecoin regulation?
Concern among certain investors arises due to the impending implementation of Europe‘s Markets in Crypto-Assets Regulation (MiCA), which will establish a global first, comprehensive regulatory framework for cryptocurrencies. This has sparked concerns that the U.S. might lag behind in crypto regulation.
According to Tether’s CEO, Paolo Ardoino, while this is a significant advancement in the crypto sector, the rules proposed by MiCA could potentially bring “systemic” financial risks to stablecoins.
Ardoino shared his concerns with CryptoMoon 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.”
A key consequence of the MiCA regulations requiring banks to hold stablecoin reserves is that an increasing amount of these reserves will appear on their balance sheets. If a bank were to face financial collapse, this could potentially have substantial repercussions.
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2024-10-29 16:18