The House Committee’s move to regulate stablecoins while rejecting a central bank digital currency (CBDC) shows a strategic effort to encourage private-sector innovation while imposing plans of accelerating the U.S. dollar’s dominance. Clear, risk-proportionate regulation—focused on issuer transparency and reserve requirements—could legitimize stablecoins, attracting institutional capital and accelerating adoption. However, overregulation risks driving innovation offshore, as seen in jurisdictions like Dubai, the UK, and Europe, which prioritize stablecoin integration within structured frameworks.
By favoring private-sector stablecoins over a government-issued CBDC, the U.S. mirrors Switzerland’s approach, promoting a competitive ecosystem but potentially ceding ground to regions advancing state-backed digital currencies like China’s digital yuan and the EU’s digital euro. Regulatory clarity could strengthen stablecoins as liquidity hubs between traditional finance and DeFi, much like the EU’s MiCA framework, which balances utility with risk mitigation.
This stance may influence global regulators to adopt similar strategies, focusing on stablecoins over CBDCs and advancing interoperability. Stablecoins already underpin 70% of crypto trading pairs and serve as critical infrastructure for 24/7 settlements and cross-border transactions, strengthening their role in the financial system. The U.S.’s decision will shape the regulatory landscape, determining whether stablecoins enhance global finance or remain a fragmented alternative to state-controlled digital currencies.
Hon NG, Chief Legal Officer at Bitget
