Quick Take:

• Call to Action: Former House Speaker Paul Ryan urges U.S. lawmakers to promote dollar-backed stablecoins.
• Purpose: Enhancing the attractiveness of U.S. debt in international markets.
• Crypto in Politics: Crypto policy is increasingly influential in the 2024 Presidential race, with involvement from both Biden administration officials and former President Trump.
• Regulatory Framework: Ryan advocates for a predictable regulatory framework for stablecoins in the U.S.

In a recent opinion piece published in the Wall Street Journal, former Speaker of the House Paul Ryan has called on U.S. lawmakers to promote dollar-backed stablecoins. Ryan, who served as the top Republican in the House under Presidents Obama and Trump before retiring in 2019, now serves on the Policy Council of the crypto-focused venture capital firm Paradigm. He argues that adopting stablecoins will make U.S. debt more attractive in international markets, a critical move as the U.S. faces mounting debt challenges.

The Growing Influence of Crypto Policy

The discussion around crypto policy has become increasingly significant in the 2024 Presidential race. Biden administration officials are reportedly planning to attend a policy roundtable hosted by Representative Ro Khanna (D-CA). Additionally, former President Trump has expressed support for keeping crypto companies onshore, indicating a bipartisan interest in the future of cryptocurrency regulation in the U.S.

Paul Ryan’s entry into this debate marks a notable development. He urges lawmakers in Washington to create a “sound, predictable regulatory framework for stablecoins” in the United States. In his opinion piece, Ryan emphasizes that stablecoins could be a vital tool for making American debt more attractive to international investors, thus preventing the potential disaster of a failed debt auction. He warns that such a scenario would “roil markets and severely undermine U.S. credibility.”

The Case for Stablecoins

Ryan’s argument centers on the growing competition from other countries, particularly China, in the realm of digital currencies. He notes that China has embraced digital dollar technology through its e-yuan central bank digital currency. While the e-yuan has yet to gain significant popularity among everyday citizens, its development indicates China’s strategic move towards digital financial infrastructure.

Ryan warns that the U.S. cannot afford to remain passive while its largest international competitors leverage digital currency technology. He points out that countries like China and Saudi Arabia, historically significant purchasers of American debt, are increasingly seeking alternatives to settle payments outside the dollar system. To counter this, Ryan believes that dollar-backed stablecoins issued on public, permissionless blockchains embody American values of freedom and openness, making them a preferable alternative to a central bank digital currency.

A Call for Bipartisan Cooperation

In his closing remarks, Ryan calls for a bipartisan effort in Congress to establish a regulatory framework for stablecoins. He emphasizes the need for collaboration in an election year, suggesting that a bipartisan win on this front could be particularly beneficial amidst the expected political turmoil.

Ryan’s advocacy for stablecoins and a robust regulatory framework underscores the increasing intersection of cryptocurrency with traditional financial policy and political strategy. As the U.S. navigates its debt challenges and seeks to maintain its financial dominance on the global stage, stablecoins could play a pivotal role in shaping the future of both the cryptocurrency market and the broader economic landscape.

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