- The company said the future of payments includes stablecoins.
- The legal and regulatory framework should allow payment stablecoins to function and thrive, Paradigm wrote.
Venture investment firm Paradigm has urged the U.S. Congress to pass legislation on stablecoins. The paper says traditional bank and securities laws are a poor model for regulating stable coins.
“If policymakers are going to seize the opportunity to develop regulation that is appropriate for the times, they should do so by encouraging openness and competition more so than current banking or securities,” it said.
Paradim believes the regulatory framework should support the operation and development of payment stablecoins. The paper wrote that regulatory mechanisms will help maintain confidence in stablecoins as a form of money and prevent the power to dictate the monetary system from falling into the hands of a few market participants.
The company also said that stablecoins carry fewer risks compared to banks. Issuers of stablecoins pegged to the dollar may have a reserve of assets to support their redemption promises, the statement said.
In addition, Paradigm wrote in a statement about the U.S. Securities and Exchange Commission’s (SEC) attitude toward stablecoins:
“SEC officials express the view that some stable coins are similar to money market funds (MMFs), especially when they hold a variety of assets, such as government securities, cash and other investments, to maintain stable value. Accordingly, the agency is proposing to regulate them as MMFs. But our position is different. We believe that such regulation is inconsistent with the actual use of stablecoins in the marketplace.”
Reminder, Paradigm previously filed an amicus brief in the SEC’s case against Bittrex, in which it accused the SEC of attempting to illegally expand its jurisdiction to secondary cryptocurrency markets.
At the time, Paradigm filed a brief in the SEC’s case against Bittrex in which it accused the SEC of attempting to illegally expand its jurisdiction to secondary cryptocurrency markets.