Timothy Massad – former Chairman of the Commodity Futures Trading Commission (CFTC) – believes the US government should stop ignoring stablecoins as they could potentially advance the local payment system.
Other nations, such as the United Kingdom, have already taken steps to implement comprehensive regulations on such financial products.
The US Should Shift its Strategy
In a recent interview for CNBC, Massad noted that the American authorities are making a mistake by keeping stablecoins out of their regulatory scope instead of putting them under their radar.
He thinks these monetary products could bring vital competition as long as the government addresses the risks surrounding their usage. The former CFTC Chairman went further, describing stablecoins as a potential bridge between “the crypto world and the real world.”
“My concern is we’re not addressing the risks. I think our regulators often take the view that, well, it’s better just to try to keep them out of the regulatory perimeter, but I don’t think that really works, and I think, you know, the competition from stablecoins could be useful, again, if we address the risks, and they are significant,” he stated.
Massad also claimed stablecoins should be treated as a payment mechanism, not an “investment vehicle.” He thinks they could provide America with certain benefits, such as improving its payment network:
“Most of us think of the payment system and say it seems to be fine: I’ve got credit cards, I’ve got mobile banking, what do we need anything else for? The truth is the US system is slower and more expensive than what other countries have developed all over the world.”
Subsequently, he maintained that government officials who are against stablecoins should first spend some time to understand their use cases instead of lambasting them:
“I’m sympathetic to a lot of people in government saying… we’re not convinced of the use case here, we don’t really see what the value is in the real world. But, you know, sometimes it takes time to really discover that.”
If the US Jumps, the Rest Will Follow
Massad also argued that if the US authorities were to establish stablecoin regulations, the rest of the world would most likely follow suit.
It is worth mentioning that different regions of the strongest economy have already introduced potential legislation focused on those financial products. New York’s lawmakers, for example, proposed certain amendments in May this year that could enable residents to pay bail bonds in stablecoins instead of dollars. Nonetheless, they did not specify which assets will get included in the probable bill.
Jerome Powell (Chairman of the Federal Reserve) recently claimed that stablecoins are a “form of money” over which the central bank should have some jurisdiction.
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