The U.S. Risks Its Position as a Stablecoin Leader

Far too often, regulators, policy makers, and commentators have looked at potential stablecoin regulation and assessed the risks relative those presented by the institutions facilitating these traditional forms of payments. I believe that stablecoins do not present more or less risk, but rather different risks. In one sense, the fully-backed nature of stablecoins can help mitigate against systemic risk and make supervision of their holdings far simpler for regulators than traditional banks. On the other hand, stablecoins present unique operational risks based on their underlying technology and use in new forms of payment activity that may not have been previously considered by regulators.