The United States and the greenback will suffer if stablecoin regulations are not rolled out this year, Stellar Development Foundation’s chief has claimed.
United States financial regulators are tightening their grip on the crypto industry and the U.S. dollar has also been under pressure with countries distancing themselves from dollar hegemony, but the chief of Stellar says stablecoin regulation may solve that.
In an April 11 Bloomberg interview, Denelle Dixon, the CEO and executive director of the Stellar Development Foundation, spoke about the prospects of regulating dollar-pegged digital assets in the United States.
Dixon said she was very optimistic that there would be some form of stablecoin regulation in the U.S. by the end of the year because “they want to set the standard.”
“If we want a strong U.S. dollar globally, a USD stablecoin is the way to see that happen.”
President Joe Biden’s administration has already highlighted the need for a stablecoin regulatory framework, but Dixon said that needs to be pushed through Congress.
“If we don’t do something in the U.S., we’re going to be in this bifurcated world where we have legislation outside the U.S. that’s friendlier to crypto,” Dixon said, adding:
“There will be companies outside the U.S. and there will still be the issue that U.S. consumers will want to leverage this technology.”
Dixon was optimistic about stablecoin regulation “only because we don’t have a choice,” saying the focus should be more on the utility and value to users than on the tech stack.
“Stop talking about the technology and start demonstrating the utility,” she added.
“Stop talking about the technology and start demonstrating the utility.” – @DenelleDixon on @BloombergLive
— Stellar (@StellarOrg) April 11, 2023
Stellar is a decentralized cross-border payments network powered by the Lumens (XLM) token. It was created as a modified fork from Ripple’s codebase in 2014.
Related: Stablecoins are solution to crypto’s banking problem, exec says
Stablecoins currently represent around 10.5% of the entire crypto market capitalization with $133 billion in circulation. Dixon hinted that it was paramount that stablecoins are regulated and accepted in America as the vast majority of them are pegged to the U.S. dollar.
Market leader Tether (USDT) has issued $14 billion in USDT so far this year, strengthening its market share to 60% with its circulation of $80 billion.
The gains come at the expense of Circle’s USD Coin (USDC) and Binance’s Binance USD (BUSD) stablecoins, both of which have seen considerable declines in supply this year.
Magazine: Unstablecoins: Depegging, bank runs and other risks loom