cryptonews.com
Paul Ryan – the 54th speaker of the United States House of Representatives – has emerged as a major proponent of stablecoins, with a bright outlook on what regulation could bring to the industry.
Paul Ryan Bullish On Stablecoins
In an interview with Bloomberg on Friday, Ryan highlighted stablecoins as a potential solution to the looming US sovereign debt crisis. Public data shows that the nation is currently $34.7 trillion in debt, and is making annual interest payments of over $1 trillion.
fmr speaker Paul Ryan's comments on stablecoins on bloomberg last friday. extremely important for a few reasons: pic.twitter.com/k2fdodTUvJ
— nic carter (@nic__carter) May 15, 2024
“I think stablecoin legislation would be a step in the right direction,” he said. “That could be done this year, but I don’t see anything other than that on the horizon.”
Stablecoins are crypto tokens that are pegged to relatively value-stable assets – mainly the U.S. dollar. Crypto traders often use them for trading, borrowing, and lending in the decentralized finance (DeFi) space, while others use them to access the stability of the dollar in countries where dollars are otherwise unobtainable.
Stablecoin issuers like Tether and Circle mainly back their tokens with short-term US Treasury bills and other dollar equivalent instruments, while profiting on the interest they provide. As such, rising demand for stablecoins directly translates to demand for US government debt, which is imperative when the government needs lenders.
At present, the stablecoin market is over $140 billion in size, but remains unregulated. According to Ryan, a bipartisan agreement on stablecoins making its way through the legislative process could help remedy that, currently being negotiated between Patrick McHenry and Maxine Waters of the House Financial Services Committee.
“I think there’s a reasonable chance they could get a deal on stablecoin legislation,” Ryan said. “That means you have a legal framework in which you can have stablecoins deployed… you’d go from a couple hundred billion dollars of stablecoins to maybe trillions.”
Another Republican Supporting Crypto
The former speaker said that stablecoins adoption could integrate the dollar into the ongoing digitization of currencies, and entrench dollar adoption overall.
“That’s one thing you can try and do on the margins to improve demand for bonds and improve dollar adoption,” he concluded.
Ryan’s comments echo a common pro-crypto sentiment among Republicans, who have taken up the mantle of supporting the industry in place of their less-than-favorable Democrat counterparts.
Former president Donald Trump, who once blasted Bitcoin as a scam, has recently flipped positions with a promise to keep crypto in America.