According to an interview with Bloomberg, the CEO of the Stellar Development Foundation, Denelle Dixon, believes that US lawmakers need to develop regulation for stablecoins tied to the US dollar.
This would help strengthen the value of the national currency, as US financial regulators are increasing their oversight of the cryptocurrency industry.
Meanwhile, countries seeking to reduce their dependence on the US state currency are also putting pressure on the dollar. Dixon thinks that developing regulation for stablecoins could solve this issue.
She is confident that the authorities will establish at least minimum requirements and standards for stable cryptocurrency issuers by the end of the year.
Dixon argues that if the US wants to maintain the strength of the dollar on the global stage, it needs to embrace dollar-backed stablecoins.
Without proper regulation, she fears that the US will be left behind as other countries create more cryptocurrency-friendly legislation.
This could result in industry companies being based outside the United States, while Americans are left using products and technologies developed elsewhere.
Earlier this year, the Biden administration released a roadmap for regulating cryptocurrencies, but Dixon believes that Congress is the only entity with enough influence to regulate crypto assets.
She argues that the focus of regulation should be on the benefits and value of stablecoins for society. Unfortunately, the US Treasury Departments are divided on crypto assets, which is delaying the development of regulation.
While the Commodity Futures Trading Commission (CFTC) considers stablecoins to be commodities, Securities and Exchange Commission (SEC) Chairman Gary Gensler insists that all digital assets, except for bitcoin, should be classified as securities.