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In an interview on Monday, U.S. Representative French Hill emphasized legislative efforts to enable the private sector to lead the development of a dollar-backed payment stablecoin and predicted quicker market entry for spot Ethereum ETFs compared to Bitcoin ETFs.
U.S. Representative French Hill, chair of the subcommittee on digital assets, discussed future stablecoin-related policy in the United States during a CNBC “Squawkbox” interview.
“We are still working on a payments stablecoin bill that will let the private sector here lead… on a dollar-backed payment stablecoin,” Hill said.
Hill mentioned that efforts are ongoing to develop the bill, which would empower the private sector to take the lead in creating a dollar-backed payment stablecoin. This initiative highlights the focus on leveraging private industry capabilities to advance stablecoin technology in the financial sector.
In August 2023, PayPal introduced its new cryptocurrency, PayPal USD (PYUSD), as a stablecoin backed by secure and highly liquid assets.
“I think that concept of a tokenized payment through a payment stable coin makes sense inside certain applications on a blockchain,” Hill said.
Hill said last week’s most recent legislative push comes as an effort to ensure stablecoin regulatory clarity and consumer protection in the stablecoin market.
Stablecoin benefits and risks
In the past, an answer to crypto volatility was through stablecoins, which are cryptocurrencies that aim to keep a stable value relative to a specified asset or a pool of assets, like the US dollar.
A stablecoin held in bank accounts would safely expand and enhance the money supply of any currency. A stablecoin pegged to the U.S. dollar can boost economic growth by enabling more efficient use of the dollar, leading to quicker and cheaper transactions.
Potential economic risks associated with stablecoins include legal issues, governance concerns, operational resilience, money laundering, terrorist financing, consumer protection, and impact on monetary policy and financial stability.
Spot ethereum ETF
Representative Hill also predicted that spot Ethereum ETFs would reach the market faster than Bitcoin (BTC) ETFs did earlier in 2024.
Hill expressed that the cash and futures market correlation “enhances the assessment of Ether and puts it on a slightly shorter timeframe than we saw in the Bitcoin process.”