Former Speaker of the House Paul Ryan emphasized the importance of stablecoin regulation, advocating for it as a crucial step for the U.S. financial system.
What Happened: Ryan believes that passing stablecoin legislation this year could significantly bolster demand for U.S. Treasury securities and enhance the global standing of the U.S. dollar.
“Stablecoin legislation would be a good step in the right direction. That could be helpful. That could be done this year,” Ryan told Bloomberg in an interview on May 10.
He highlighted that stablecoins, which are digital currencies backed by the U.S. dollar, differ from cryptocurrencies due to their reliance on real-world assets like treasuries and cash for backing.
Currently, there is no legal framework governing stablecoins, which limits their deployment and potential impact. However, Ryan pointed out ongoing legislative efforts led by Chair Maxine Waters (D-Calif.) and Rep. Patrick McHenry (R-N.C.), with support from Senate Majority Leader Chuck Schumer.
“I think there’s a reasonable chance they could get a deal on stablecoin legislation,” he remarked, expressing cautious optimism about the prospects for such legislation.
Ryan elaborated on the connection between stablecoin regulation and U.S. Treasury auctions.
He explained that stablecoins need to be backed by treasuries or cash, which would increase demand for U.S. bonds.
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“Right now, stablecoins are like the 16th largest buyer of bonds, bills and notes. Among all sovereigns, if you actually regulate stablecoins, having deployed, that does two things. That gets the U.S. dollar more deeply ingrained in the oncoming digitization of currencies. That’s a good thing. And you create new consumer demand for our bonds because they have to have those to back up the stablecoins,” Ryan said.
The former Speaker underscored the benefits of integrating stablecoins into the financial system, predicting that their deployment could escalate from hundreds of billions to potentially trillions.
He emphasized that this would be a “win-win situation for America,” enhancing the demand for treasuries and embedding the digital dollar more deeply into the global financial infrastructure.
“I think it’s a no-brainer. I’m hopeful, cautiously optimistic Congress might do that this year. Still, there are good talks happening,” Ryan concluded.
What Happened: The implications of stablecoin regulation and its potential benefits for the U.S. financial system will be a key topic at Benzinga’s Future of Digital Assets event on Nov. 19.
Industry leaders and experts will discuss the evolving landscape of digital finance and the impact of regulatory developments on stablecoins and other digital assets.
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