Paxos CEO emphasized the importance of stablecoins in enhancing banking efficiency and preserving the global dominance of the US dollar in an open letter to Donald Trump and Kamala Harris.
Charles Cascarilla, Paxos CEO, has written an open letter to the top presidential candidates in the United States. The letter encourages them to adopt stablecoins to enhance the efficiency of the traditional banking system and preserve the global dominance of the US dollar.
Paxos CEO pushes open letter to presidential candidates on US dollar
In an open letter published on Oct. 29, Paxos CEO wrote that the next presidential administration could determine the United States’ future leadership in the global financial industry.
Paxos CEO wrote that blockchain and stablecoins are “re-platforming the financial system” to ensure it is symbiotic with the internet. He declared:
“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 is being sent one week before the US presidential election, which is becoming a significant event for crypto investors due to the potential impact it could have on the industry’s regulatory landscape over the next four years.
Former President Donald Trump is regarded as the more crypto- and innovation-friendly candidate, and he may advocate for less restrictive regulations than his opponent, Kamala Harris, the Vice President.
The global financial system is “inefficient, outdated, and closed.”
Paxos CEO equates the traditional financial system to the antiquated efficiency of the post office, using this as a justification to encourage the upcoming US president to embrace stablecoins and blockchain technology to address these inefficiencies.
In the open letter, he composed the following:
“The global financial system is closed, outdated and inefficient.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.”
According to data from the Federal Reserve and World Bank, more than 20% of the US population and 40% of the global population are either unbanked or underbanked, which implies that they cannot access conventional banking services such as savings accounts and loans.
Paxos CEO contends that blockchain technology can facilitate more convenient access to financial services for individuals who possess a smartphone or computer and have internet access, particularly in regions that lack a banking infrastructure.
Is EU truly ahead of the United States in regulating stablecoins and crypto?
Some investors are concerned that the United States may lag in crypto regulations, as Europe’s Markets in Crypto-Assets Regulation (MiCA) is set to become the first comprehensive regulatory framework for crypto worldwide.
According to Paolo Ardoino, the CEO of Tether, the world’s largest stablecoin issuer, MiCA’s regulations introduce “systemic” banking risks for stablecoins even though this is a significant development for the crypto industry.
During an interview at Plan B Lugano in Switzerland, Ardoino expressed his issues to Cointelegraph:
“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.”
The MiCA-imposed bank reserve requirements will significantly increase the amount of stablecoin reserves held on bank balance sheets, which could have significant consequences if a bank were insolvent.
