How the United States could present itself as a crypto leader?

 How the United States could present itself as a crypto leader?

The week of the TerraUSD (UST) crash was one of the most disappointing in crypto history - we'll be watching for a long time to come. This disrupted the cryptocurrency market, resulting in billions of dollars in losses. As we discuss the next steps in Washington, an intelligent and thoughtful discussion of potential legislation is essential.

Stabilcoins are an important innovation, offering consumers many advantages and perks compared to the United States. Stablecoins increase the efficiency of payments and transfers, reduce costs, and accelerate the population of businesses and consumers. They make the financial system more inclusive by providing transparency to anyone, anywhere, regardless of social or economic status. They can also advance US geopolitical interests, strengthening the global hegemony of the dollar in the face of attempts by our adversaries, such as China and Russia, to weaken US leadership. Financial system.

Jake Chervinsky is the Political Director of the Blockchain Association.

So how should politicians react after these monthly events?

As the name suggests, stablecoins are designed to be stable and reliable. In general, there are two broad classes of sedentary queens: dominant and decentralized.

Portfolio status is issued every two weeks by the central authority and is officially kept in a bank or other institution. It's usually fully guaranteed: the issuer keeps $1 for every $1 in the bank, which is a consistent problem. Wallet coins make up a large portion of the total stablecoin volume and are very stable and reliable as long as the issuer is trustworthy and transparent.

Decentralized stability coins are used to decide whether all issuers are trustworthy or transparent. Their goal - like the universal blockchain that enables them - is to eliminate dependence on trusted intermediaries in the financial system, which often does more harm than good. They achieve this goal by issuing a stablecoin that prefers holding dollars using an open token rather than relying on a central issuer. Instead of backing dollars in banks, decentralized stable loans are usually backed by other digital assets that are programmatically placed on the blockchain.

Importantly, although concentrated and non-standard stabilizers use different models, they are not considered basic, better, or worse. Each has its own characteristics - benefits and risks - that make it a strong and competitive market, determined by consumer choice. We need to support responsible innovation in both categories.

Unfortunately, floor cabinets are a class that relies entirely on algorithmic methods to maintain price stability without any guarantee, and the dangerous model predicted by many may fail. ۔

First, as US Treasury Secretary Janet Yellen testified in Congress on May 12, politicians must follow the path taken by Biden (EO) earlier this year. The EO, which directs federal agencies to investigate and report on digital currencies, preferences, and solutions, provides clear guidelines for complying with StableCoin rules. This is important and ongoing work. According to business groups such as employers, industry stakeholders, and the China Blocks Association, politicians need to fully understand the key differences between the StableCoin space and the various StableQueen designs. This is a prerequisite for effective regulation.

Secondly, bilateral cooperation with Congress is required. After the tanks fell, Congress became aggressive on both sides of the aisle. But as my colleague Kirsten Smith recently wrote, there is a lot of secrecy in party politics. We need leaders on both sides to determine the best legal framework for digital currencies. As the President's Working Group on Financial Markets (PWG) recommended in a StableQueen report last year, the regulatory decision should come from Congress, not the regulators.

Third, new relevant laws are needed. These policies need to be balanced and take into account the key features of tightly defined currencies that will dominate the dollar for decades to protect US finances. We need a regulatory framework designed to address the specific benefits and risks of stack coins. To protect the stables, Senator Pat Tommy (R-Pen) and Rep. Josh Gottheimer (D-NJ) proposed separate frameworks - the best examples of careful surveillance practices on both sides of the aisle in the Senate and House of Representatives. Over time, we can create well-designed frames that look like decentralized stable coins.

Sustainable coins give us the best opportunity to destroy them as a matter of policy. The United States is embarking on an internationally competitive race to become the home of Web3. It's time to dump her and move on. As a hub for global digital currency innovation, the future of the United States is in balance.