{"id":3090,"date":"2023-09-18T21:00:26","date_gmt":"2023-09-18T21:00:26","guid":{"rendered":"https:\/\/www.allisonworldwide.com\/?p=3090"},"modified":"2023-09-20T14:45:10","modified_gmt":"2023-09-20T14:45:10","slug":"uncertainty-stablecoins-and-the-need-for-bipartisan-solutions","status":"publish","type":"post","link":"https:\/\/www.allisonworldwide.com\/uncertainty-stablecoins-and-the-need-for-bipartisan-solutions\/","title":{"rendered":"Uncertainty: Stablecoins and the Need for Bipartisan Solutions\u00a0"},"content":{"rendered":"\n
\"\"<\/figure>\n\n\n\n

By David Baum and Greg Jawski <\/p>\n\n\n\n

In early September, a top Fed Reserve regulatory official summed up the continued inaction in our nation\u2019s capital when he said<\/a>: \u201cOf course, investigation and research are very different from decision-making about next steps in terms of payments system development, and we are a long way from that.\u201d  <\/p>\n\n\n\n

Despite the Federal Reserve recently issuing recommended guidelines<\/a> for the Bank\u2019s use of stablecoins and the House Financial Services Committee in July successfully moving bipartisan legislation<\/a> out of Committee that includes a regulatory framework for stablecoins, it is still unclear if regulation will be passed and implemented in the months ahead.  <\/p>\n\n\n\n

As a monetary instrument that is both digitally native and can easily produce an on\/off ramp to fiat currency like the U.S. dollar, stablecoin adoption will likely increase. Industry leaders and stablecoin issuers, including PayPal, Coinbase, Circle and others, continue to push for regulatory frameworks in the United States.  <\/p>\n\n\n\n

While stablecoin issuers move to demonstrate greater utility, openness to regulation and greater consumer protection, there is concern the U.S. has become hostile to stablecoins.  <\/p>\n\n\n\n

One of the house members who voted against the bill, U.S. Rep. Stephen Lynch (D-Mass.), said<\/a>, \u201cThere\u2019s not uncertainty, they just don\u2019t like the certainty they\u2019ve got.\u201d <\/p>\n\n\n\n

Uncertainty is a dangerous thing in finance. There is bipartisan agreement that a new regulatory framework needs to be developed to encourage innovation while providing safeguards against risks. Careful collaboration between U.S. government agencies, financial institutions, allied nations and technology is critical to strike the right balance and create an environment where stablecoins thrive safely.  <\/p>\n\n\n\n

While the gears of reform move painstakingly slow, across the globe countries have actively taken steps to embrace stablecoins and position their economies well for the next generation of banking. Switzerland and Singapore, long at the forefront of international finance, have not surprisingly established themselves as hubs for blockchain technology, while others like China have taken steps to introduce digital currencies. Finance is interconnected, and it is a strong signal the transformative power of stablecoins will not slow down.   <\/p>\n\n\n\n

So, why Stablecoins? Benefits include enhancing financial inclusion, streamlining cross-border transactions, encouraging innovation and protecting American competitiveness. Stablecoins, a relatively new financial tool, have emerged as a widely adopted choice for inclusion in our modern economic system. As their name suggests, stablecoins maintain a stable value relative to a specific asset, making them valuable for various financial market use cases and improving the customer experience and payment efficiencies. <\/p>\n\n\n\n

During this current market downturn, the list of use cases for stablecoins has expanded and fintechs, payment companies, and intuitional and investment firms have increased their usage. Many of these marketplace participants use stablecoins in everyday finance or are designing ways to do so.  <\/p>\n\n\n\n

Digitizing stable assets will ultimately unlock the potential of global financial markets. <\/p>\n\n\n\n