Paxos CEO urges US lawmakers to set cross-border stablecoin regulation
US lawmakers are set for a heated debate on stablecoin regulation, with key industry leaders expected to outline their vision for the future of digital asset oversight.
Charles Cascarilla, co-founder and CEO of stablecoin issuer Paxos, is scheduled to testify before the House Financial Services Committee, where he will urge lawmakers to establish “cross-jurisdictional reciprocity” in stablecoin regulations.
In his prepared testimony, Cascarilla flagged concerns about the existing hurdles in the adoption of Paxos’ Global Dollar (USDG) stablecoin due to it being issued via a regulated affiliate in Singapore.
“We fear that products like Paxos’ Global Dollar (USDG) stablecoin, issued by a regulated affiliate in Singapore, will languish while departments and agencies make their determinations,” Cascarilla wrote in his speech.
US must act to prevent regulatory stablecoin arbitrage
Cascarilla recommended US lawmakers strengthen the current “international reciprocity language” to include clearly defined, accelerated timelines for the US Treasury Department to designate overseas jurisdictions for stablecoin regulation.
“This timeframe would force swift action and prevent bureaucratic delays while guaranteeing thorough scrutiny of foreign regulatory regimes,” the executive said.
Cascarilla emphasized that potential delays in applying such action would be a major hurdle in the adoption and distribution of stablecoins like USDG in the US as well as cross-border operations.
“Reciprocity is not about lowering standards — it’s about raising them globally,” Cascarilla said, adding:
“By establishing a framework to recognize jurisdictions with comparable regulatory regimes — covering reserve requirements, AML measures and cybersecurity protocols — the United States can prevent regulatory arbitrage, where issuers exploit lax oversight abroad.”
Paxos stablecoins were deemed non-compliant in the EU
Cascarilla’s remarks come amid some Paxos-issued stablecoins facing compliance issues in the European Union following the enforcement of its crypto regulation framework, Markets in Crypto-Assets (MiCA).
Since the MiCA framework went into full force in December 2024, multiple crypto asset service providers in the EU — including Crypto.com and Coinbase — have announced the delistings of Paxos stablecoins, including Pax Dollar (PAX) and Pax Gold (PAXG).
While Paxos’ Cascarilla is now calling for the US to take urgent action in forcing a global framework for stablecoin issuers that are regulated outside of the US, some industry CEOs have urged all stablecoin firms to get regulated domestically instead.
In February, Circle co-founder Jeremy Allaire argued that all dollar-based stablecoin issuers should register in the US, citing consumer protection and fair competition in the crypto market. He stated:
“Whether you are an offshore company or based in Hong Kong, if you want to offer your US dollar stablecoin in the US, you should register in the US just like we have to go register everywhere else.”
Issued and regulated in the US, Circle’s USDC (USDC) stablecoin was officially approved as the first MiCA-compliant stablecoin in 2024.
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Rachel Reeves has hinted that taxes are likely to be raised this autumn after a major U-turn on the government’s controversial welfare bill.
Sir Keir Starmer’s Universal Credit and Personal Independent Payment Bill passed through the House of Commons on Tuesday after multiple concessions and threats of a major rebellion.
MPs ended up voting for only one part of the plan: a cut to universal credit (UC) sickness benefits for new claimants from £97 a week to £50 from 2026/7.
Initially aimed at saving £5.5bn, it now leaves the government with an estimated £5.5bn black hole – close to breaching Ms Reeves’s fiscal rules set out last year.
Read more:
Yet another fiscal ‘black hole’? Here’s why this one matters
Success or failure: One year of Keir in nine charts
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Rachel Reeves’s fiscal dilemma
In an interview with The Guardian, the chancellor did not rule out tax rises later in the year, saying there were “costs” to watering down the welfare bill.
“I’m not going to [rule out tax rises], because it would be irresponsible for a chancellor to do that,” Ms Reeves told the outlet.
“We took the decisions last year to draw a line under unfunded commitments and economic mismanagement.
“So we’ll never have to do something like that again. But there are costs to what happened.”
Meanwhile, The Times reported that, ahead of the Commons vote on the welfare bill, Ms Reeves told cabinet ministers the decision to offer concessions would mean taxes would have to be raised.
The outlet reported that the chancellor said the tax rises would be smaller than those announced in the 2024 budget, but that she is expected to have to raise tens of billions more.
It comes after Ms Reeves said she was “totally” up to continuing as chancellor after appearing tearful at Prime Minister’s Questions.
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Why was the chancellor crying at PMQs?
Criticising Sir Keir for the U-turns on benefit reform during PMQs, Conservative leader Kemi Badenoch said the chancellor looked “absolutely miserable”, and questioned whether she would remain in post until the next election.
Sir Keir did not explicitly say that she would, and Ms Badenoch interjected to say: “How awful for the chancellor that he couldn’t confirm that she would stay in place.”
In her first comments after the incident, Ms Reeves said she was having a “tough day” before adding: “People saw I was upset, but that was yesterday.
“Today’s a new day and I’m just cracking on with the job.”
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Reeves is ‘totally’ up for the job
Sir Keir also told Sky News’ political editor Beth Rigby on Thursday that he “didn’t appreciate” that Ms Reeves was crying in the Commons.
“In PMQs, it is bang, bang, bang,” he said. “That’s what it was yesterday.
“And therefore, I was probably the last to appreciate anything else going on in the chamber, and that’s just a straightforward human explanation, common sense explanation.”
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