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Haider Jamal

Jun 17, 2024

Former House Speaker Believes Stablecoins Can Help The US Compete With China

United States Dollar (USD)-pegged stablecoins could mitigate the ongoing debt crisis and bolster the national currency amid increasing international trade competition, according to former House speaker Paul D. Ryan. In a recent Wall Street Journal article, Ryan emphasized that the US faces a foreseeable debt crisis that could be addressed by dollar-backed stablecoins, which he views as a solution to maintain the appeal of the USD.

 

The Potential Of Stablecoins

Ryan, who served as the 54th speaker of the US House of Representatives, highlighted the potential of stablecoins in terms of generating significant demand for the US Treasury, going as far as to claim they could help avert failed debt auctions and associated crises. He currently works as a policy council member at Paradigm, a venture capital firm focused on crypto.

The existing $162 billion stablecoin market already plays a crucial role in supporting the dominance of the USD in global finance, Ryan noted. He argued that leveraging blockchain technology for fiscal spending could provide cost-effective financing and bolster influence worldwide.

 

Competing With China

Ryan also pointed out how China is trying to integrate the Yuan into digital infrastructure across emerging markets, urging the US to develop its own strategy promptly. He emphasized that stablecoins backed by dollars not only create demand for US public debt but also offer a way for the US to compete with Chinese initiatives in digital money.

The opinion piece has garnered support by various industry figures, with some like Emin Gün Sirer, CEO of Ava Labs, praising stablecoins. However, others, such as Adam Gladstein via the Human Rights Foundation, caution that greater reliance on stablecoins could reinforce the existing financial system that cryptocurrencies like Bitcoin (BTC) seek to challenge.

Overall, Ryan called for a robust regulatory framework for stablecoins, which enjoys bipartisan backing in Congress, to expand digital dollar usage during this critical juncture.

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