Former Binance.US chief says US would gain from regulating stablecoins

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Regulation of stablecoins in the United States would once again render the dollar relevant across the globe. This view was voiced by the former CEO of Binance.US, Brian Brooks, in an interview with CNBC.

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From May 2020 to January 2021, Brooks acted as financial controller under the Trump administration. In the crypto industry, he was Coinbase’s chief legal officer from 2018 to 2020, led the mining firm Bitfury, and sat on the board of directors of the broker Voyager Digital.

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Now a partner at Valor Capital Group, Brooks expressed disagreement with concerns about a potential threat to financial stability from stablecoins and the slowing pace of regulatory rulemaking.

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According to him, in countries with high inflation there is a strong need for dollar-denominated products to preserve savings. However, in many such jurisdictions it is difficult to open a foreign currency account. In this context, stablecoins could be \”the best solution\”, Brooks noted.

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\u201cIf the United States government created a framework that allowed dollars to be maintained in stablecoins in a regulated manner, this demand would thrive. It would foster adoption of the American national currency worldwide,\u201d he said.\

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On August 7, the payments giant PayPal launched a dollar-backed stablecoin. Congresswoman Maxine Waters expressed deep concern regarding the asset, pointing to the lack of a regulatory framework.

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Since 2022, the House of Representatives has been considering a bill to regulate stablecoins. Its co-authors are Democratic representative Waters and Republican Patrick McHenry. In October, the latter stated that discussions on the bipartisan measure had hit a dead end. At the first hearings in 2023, the rule proposal again came under criticism.

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In June, the Republican faction put forward its version of the bill. Waters called it \”poisonous and problematic\”. She believes the measure has little chance of securing Democratic support.

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Owing to the need for regulation of stablecoins has been voiced by both industry representatives and the head of ФРС Jerome Powell.

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\u201cDemand for stablecoins is a way for us to make the dollar relevant again at a time when governments around the world are trying to shield themselves from it. This is truly a very important political issue. It is not about cryptocurrency, but about the role the United States plays in the financial system,\u201d Brooks concluded.

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Analysts at Bernstein forecast a rise in the capitalization of the stablecoins segment from the current $125 billion to $2.8 trillion over five years.

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