The CEO of Paxos believes stablecoins can make financial transactions more efficient, lower costs, and expand access to banking services, particularly for unbanked and underbanked populations.
Charles Cascarilla, co-founder and CEO of Paxos, has called for the U.S. to embrace stablecoins as a way to modernize its financial system and maintain the dollar’s global dominance.
Speaking at Congress, Cascarilla argues that stablecoins are not new forms of money but a better way to distribute existing U.S. dollars worldwide.
By using blockchain technology, stablecoins can eliminate high fees, such as overdraft charges and wire transfer costs, making financial services more affordable for everyday consumers and businesses.
Cascarilla added that stablecoins are a major advantage for American businesses as they offer instant settlement and lower transaction costs.
Traditional bank transfers, like those from Bank of America, can be expensive, with domestic wire fees around $30 and international ones reaching $45 plus exchange rate markups. Credit card transactions also come with up to 3% merchant fees, making them costly for businesses.
Stablecoins, however, offer significantly lower fees, which makes stablecoins a cost-effective alternative, especially for high-volume transactions.
US standards for stablecoins
While stablecoins offer considerable advantage, there is a need for the U.S. to set global standards for stablecoins according to Cascarilla. Many countries, including Japan, Singapore, the European Union, and the United Arab Emirates, have already established clear regulations for digital assets.
If the U.S. fails to act, Cascarilla warns that it could lose its financial leadership, as companies and investors may move to regions with more favorable regulatory frameworks. To prevent this, he urged lawmakers to pass balanced and clear legislation that promotes stablecoin adoption while maintaining financial stability.
Cascarilla expressed support for the STABLE Act, a proposed law to regulate stablecoins. However, he believes it requires improvements, suggesting the law should include clearer timelines for recognizing international regulatory standards to ensure the U.S. remains competitive.
The CEO also recommended that stablecoin issuers be allowed to choose between state or federal regulation, similar to the dual banking system, as long as state regulations meet or exceed federal standards.
Why stablecoins are better than CBDCs
Cascarilla highlighted the crucial role of the private sector in driving financial innovation, noting that private enterprises have historically led technological advancements, such as ATMs and electronic payments.
Ex-CFTC Chair Slams STABLE Act, Calls for Stronger Federal Grip on Stablecoins
He questioned the necessity of a central bank digital currency (CBDC) in the U.S., arguing that stablecoins from private companies can deliver similar advantages without requiring government involvement.
Stablecoins can also help people in developing countries who lack access to traditional banking. Cascarilla noted that nearly 40% of people in these regions do not have adequate banking services. However, because 70% of the global population owns smartphones, blockchain-based stablecoins can provide them with a secure and accessible way to store and transfer money.
From a broader economic perspective, U.S. dollar-backed stablecoins can help strengthen the country’s financial position. As demand for U.S. Treasuries declines, stablecoins can play a role in maintaining the dollar’s dominance by increasing global access to the currency. In countries struggling with inflation or weak banking systems, stablecoins offer a stable alternative, reinforcing demand for U.S. dollars and improving domestic liquidity.
Cascarilla stressed that Congress must act quickly to secure the U.S.’s leadership in digital finance. He warned that if lawmakers delay, other nations will take control of the future of digital money, shaping it in ways that may not align with U.S. interests. He urged policymakers to refine the STABLE Act, ensure strong but fair regulations, and embrace financial innovation.
Clear legislation is important, and Congress has the opportunity to act decisively, Cascarilla said. With enhancements, the STABLE Act secures the dollar, lowers costs, boosts innovation, and strengthens economic leadership, while inaction will let other nations shape digital money on their terms.
