Ex-U.S. House of Representatives Speaker Paul Ryan is encouraging U.S. legislators to back dollar-guaranteed stablecoins to make the U.S. debt instruments more appealing internationally. In his opinion, published in the Wall Street Journal recently, Ryan claims that introducing stablecoins could avoid a failed debt auction, which would hurt the U.S. credibility and destabilize the world markets.
Ryan, initially in the House of Representatives and retired in 2019 as the leading Republican, joined Paradigm as a member of the Policy Council and underlined the value of an effective regulation of stablecoins. He supposes that such a framework would help make debt in the United States more attractive to foreign investors as countries such as China gradually increase the use of their currencies and look for other opportunities to invest instead of purchasing debt in the form of the U.S. Treasury.
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Although HSBC China recently emerged as the first foreign bank to provide its services based on the e-yuan, the currency has not succeeded. Ryan alerted that the U.S. must act quickly while its most significant global rival, China, is considering solving external payment issues using digital currency instead of greenbacks.
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Differentiating Stablecoin from Central Bank Digital Currencies
Ryan clearly distinguished between dollar-pegged stablecoins anchored to the public, permissionless networks like Ethereum, and other blockchains from CDBC, such as the Chinese e-yuan. Uphoff also said that stablecoins have American values such as freedom and openness, but CBDCs could threaten these values in the United States. For him, stablecoins were a more desirable option, as Ryan suggested.
Similarly, Ryan noted an increased need to pass bipartisan legislation to guide the use of stablecoins, especially in the election year when the political climate becomes so polarized. During the carnival season of the high stakes ugly politics of the upcoming year, Ryan suggested a winning strategy across party lines.
While supporters of decentralized finance may question what happened to their bold dreams of revolutionizing the financial system through crypto, Paul Ryan’s call to action comes amid increased interest in crypto policy in the race for the 2024 Presidency. New administration members wish to join a policy round table spearheaded by Ro Khanna, a democrat member of Congress. Former President Trump has announced his preference to retain Crypto commerce onshore.
Moreover, Paul Ryan’s initiative in filing for stablecoin legislation intends to strengthen the U.S.’s financial stability and competitiveness. While the 2024 presidential race warms up, the centrality and necessity of a supportive and direct official U.S. policy action on stablecoins could become a big deal that shapes national policy and the international financial system in return.
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