30s Summary

Paxos CEO Charles Cascarilla has written an open letter to US presidential candidates, calling on them to embrace stablecoins and blockchain to boost the global status of the US dollar. Cascarilla describes the current financial system as outdated and inefficient. He suggests that stablecoins, or digital dollars, created via blockchain technology, are critical to modernising the financial system. He highlighted that more than 20% of Americans and 40% of people worldwide are underbanked or unbanked and HE suggests blockchain technology could offer them easier access to financial services.

Full Article

The CEO of Paxos, Charles Cascarilla, has penned an open letter to top presidential candidates in the US, suggesting that they embrace stablecoins. He reckons this will help the US dollar in keeping its clout worldwide, and also deal with issues in the banking system.

Cascarilla thinks that the upcoming presidential administration has a key role to play in the future direction of US leadership in global finance. He shared these thoughts in a letter he brought out on October 29th.

He strongly believes that stablecoins and blockchain are shifting the financial system and aligning it with the internet. As he puts it:

“Stablecoins, or digital dollars—U.S. dollars turned into digital assets by way of blockchain technology—are the critical update our payment system needs. It’ll totally change how money moves, increase involvement in the worldwide economy, and keep the US dollar on top for the foreseeable future.”

His letter was released a week before the US presidential election. That’s a key event for crypto investors, as the next administration’s policies on crypto that could stick around for four years.

Ex-President Donald Trump is seen as the most crypto-friendly and innovative candidate. It’s hoped he’d impose fewer restrictions than his competition, Kamala Harris, the Vice President.

Cascarilla’s not a fan of the current financial system, which he compares to the post office’s old-school efficiency. This has led him to hustle the potential future US president to give stablecoins and blockchain technology a shot.

He goes on to say:

“The global financial system is closed, outdated and inefficient. This industry is vital to the U.S., yet it operates at the speed of the post office while the rest of the economy has rapidly innovated by successfully using technology and the internet.”

Shockingly, more than 20% of Americans and around 40% of people across the globe are either unbanked or underbanked. This means they can’t get traditional banking services like loans and savings accounts, according to data from the World Bank and the Federal Reserve.

Cascarilla believes that blockchain technology can help by offering easier access to financial services for anyone with a smart device or computer and internet access. This is particularly true in areas where traditional banking structures are lacking.

Meanwhile, some investors are worried that the US is falling behind Europe concerning crypto and stablecoin legislation. Europe’s Markets in Crypto-Assets Regulation (MiCA) is about to be the first broad regulatory crypto framework in the world.

However, despite MiCA being a major step for the crypto industry, Paolo Ardoino, CEO of Tether sees it introducing potential “systemic” banking risks for stablecoins.

Ardoino explains his anxieties:

“If you have 10 billion euros under management, you have to put 6 billion euros in cash deposits. That is 60% of 10 billion euros. We know that banks can lend out 90% of their balance sheet. So of the 6 billion euros, they lend out 5.4 billion euros to people […] 600 million euros will remain in the bank balance sheet.”

In a nutshell, MiCA requirements mean that an increasing chunk of stablecoin reserves will have to stay in bank balance sheets. That raises important issues in case a bank goes under.

Source: Cointelegraph