US congressman stresses well-regulated stablecoin market is essential for maintaining the dollar's global dominance

House Financial Services Committee Chairman French Hill (R-AR) stressed that a well-regulated stablecoin market is essential for maintaining the U.S. dollar's global dominance

The chairman of the House Financial Services Committee, Representative French Hill (R-AR), highlighted the crucial role of a well-regulated stablecoin market in maintaining the U.S. dollar's global dominance and advancing financial innovation, as lawmakers continue to debate the role of stablecoins and a potential central bank digital currency (CBDC).

During a hearing titled "Navigating the Digital Payments Ecosystem: Examining a Federal Framework for Payment Stablecoins and Consequences of a U.S. Central Bank Digital Currency," the Committee discussed how stablecoins can be leveraged to strengthen the dollar's position in international finance.

"A properly regulated stablecoin market can strengthen the U.S. dollar's dominance, modernize our payments infrastructure, and promote financial access without government overreach," Representative Hill stated.

The Committee's deliberations focused on the STABLE Act, which aims to provide clear regulatory standards for stablecoin issuers and ensure compliance with financial regulations such as the Bank Secrecy Act and anti-money laundering laws.

Stablecoins are already contributing to the dollar's influence by facilitating global transactions and reducing friction in cross-border payments. Every day, billions of dollars in stablecoin transactions are reducing friction in cross-border payments, streamlining commercial transactions, and giving more communities broader access to digital financial tools.

Since last year, the Committee has been working on legislation to create a stablecoin regime with the goal of providing a clear legal framework for stablecoins to operate.

The updated STABLE Act reflects input from stakeholders to strengthen operational standards, such as capital requirements and liquidity management, and enhance the role of regulators in overseeing stablecoins.

The goal is to ensure that stablecoins operate within a neutral and efficient legal framework, maximizing their contribution to international finance and the broader economy.

This effort is also part of a broader initiative to sustain the dollar's dominance as the world's primary reserve currency and support the U.S. financial system's competitiveness in the global arena.

Congressman Hill expressed concerns about a CBDC, arguing that it could undermine the dollar's competitive advantage by centralizing financial power within the federal government.

"A government-controlled digital dollar would put the Federal Reserve in direct competition with the private sector and undermine the very progress that stablecoins are making," he added.

Instead of strengthening the dollar, a CBDC could suppress competition, jeopardize financial privacy, and weaken the role of the U.S. banking system, he contended.

The hearing also addressed Representative Tom Emmer's (R-MN) Anti-CBDC Surveillance State Act, which aims to prevent government overreach in digital currencies.

Representative Hill concluded by emphasizing the Committee's commitment to ensuring that the U.S. remains the leader in financial innovation, with stablecoins playing a key role in sustaining the dollar's global dominance and advancing the broader economic interests of the American people.