Brian Brooks, former CEO of Binance.US and former U.S. Comptroller of the Currency, commented on the current discussion regarding stablecoin regulation in the United States.
In an interview with CNBC on Friday, August 11, Brooks, now a partner at Valor Capital Group, took issue with the U.S. government’s stance against stablecoins, saying that a proper regulatory framework for these assets could increase the relevance of the U.S. dollar around the world.
Brooks says dollar could benefit from high demand for stablecoins
Stablecoins are cryptocurrencies whose value is pegged to fiat currencies (primarily the U.S. dollar) or commodities such as gold and oil.
Brooks said countries with high inflation rates have strong demand for dollar-backed assets such as stablecoins as citizens look to preserve the value of their investments and income.
The former acting U.S. Comptroller of the Currency believes that if the U.S. government establishes a system to oversee the use of the dollar as a reserve currency for assets, it could further boost existing demand and even lead to greater adoption of U.S. fiat currency around the world.
Brooks explained this to CNBC, saying:
Citizens of countries with high inflation do have a strong demand for dollar-denominated products to ensure that their money is safer after it is earned. In many countries where there is no access to dollar bank accounts, stablecoins are the best solution.
If the U.S. government could create a framework that allows the dollar to back stablecoins in a regulated way, then this demand would flourish. This would be good for the global adoption of the dollar, but as long as we allow governments to suppress stablecoins, there will be a push and pull, and this is what causes problems.
For Brooks, the current demand for stablecoins can be used to lead the dollar’s recovery, especially as most governments are actively working to reduce the dollar’s influence on their economies.
The former Binance.US CEO said policies regarding these assets should not focus so much on cryptocurrencies but rather on the potential role the U.S. could play in the global financial system.
Stablecoin regulation continues to gain momentum in the U.S.
As mentioned earlier, actions by multiple parts of the U.S. government have recently fueled a lot of discussion regarding stablecoin regulation.
On August 8, the Federal Reserve launched the “New Activities Regulatory Program”, requiring all U.S. banks to obtain a written regulatory no-objection letter before processing “dollar tokens”.
Meanwhile, the U.S. House of Representatives will vote on the Clarity for Payments stablecoin. The bill was successfully passed by the House Financial Services Committee in July and aims to introduce regulation on the issuance and use of U.S. payment stablecoins.
