Top financial technology executives are pushing for dollar-backed stablecoins as a cheaper and faster payment alternative for US consumers and businesses. They plan to make their case at a crucial congressional hearing on Tuesday, as lawmakers move closer to regulating these digital assets.
According to Bloomberg, Paxos CEO Charles Cascarilla, in his prepared testimony, criticized the current banking system as a “regressive tax” burdening working families with high fees. He highlighted stablecoins as a cost-effective solution, allowing instant, nearly free transactions through blockchain.
According to ARK Invest, stablecoins have become highly popular because they processed more than $15 trillion worldwide in 2024. Tether and Circle operate as the largest stablecoin issuers by providing billions of dollars worth of daily transactions.
These tokens do not receive the FDIC insurance protection, which creates concerns about possible collapses that may demand taxpayer-funded bailouts. Former President Donald Trump supports stablecoin rules because he sees them as tools to enhance the power of the US dollar.
Treasury Secretary Scott Bessent echoed this sentiment at last week’s White House crypto summit. Meanwhile, Congress is debating new rules that would require stablecoin issuers to maintain sufficient reserves and comply with anti-money laundering laws.
Executives from Stripe and BNY Mellon will also testify at Tuesday’s House Financial Services Committee hearing. Meanwhile, the Senate Banking Committee is set to discuss and vote on stablecoin legislation later this week.
Key debates include whether issuers should be US-registered, a move that could impact Tether but benefit Circle. With banks fearing competition from stablecoins and lawmakers divided on regulation, the industry’s future hangs in the balance.
The introduction of central bank digital currency finds support from certain legislators, while crypto companies remain opposed because they believe it threatens their commercial operations. The upcoming weeks will influence how stablecoins will be regulated within the United States.
Also Read: Japan Moves to Ease Crypto Rules for Stablecoins and Brokerages
