Stablecoins are at the heart of a dollar-based revolution and could be a pivotal factor in keeping the U.S. dollar the dominant global currency, according to an Aug. 9 opinion piece published in The Wall Street Journal.
The authors, Brian Brooks and Charles Calomiris, urged Congress to implement a “sound and stable regulatory framework” for stablecoins in the country. Brooks is the former CEO of Binance.US, former chief legal officer of Coinbase and served as U.S. Comptroller of the Currency. Calomiris is dean of economics, politics and history at the University of Austin and served as chief economist of the Office of the Comptroller of the Currency.
The Clarity for Payment Stablecoins Act was proposed in July by House Financial Services Committee Chairman Patrick McHenry. However, the legislation has faced obstacles due to a lack of bipartisan agreement.
#ICYMI: U.S leadership in stablecoins can cement the Dollar’s global reserve currency status.
Our bipartisan Clarity for Payment Stablecoins Act provides the necessary consumer protections to help this technology achieve its full potential.
According to Brooks and Calomiris, with emerging concerns about dedollarization — a scenario in which the dollar loses its global reserve currency status — stablecoins could revive the post-World War II arrangement when the greenback emerged as the currency of international trade.
The affirmations are backed by data from the International Monetary Fund showing that the share of U.S. dollar reserves held by foreign central banks has fallen from almost 73% in 2000 to 59% today. “Any tool that could boost the U.S. dollar should be considered,” the piece reads.
The authors issued a warning about the ongoing dollar exodus from big commodity traders such as Brazil and Argentina. Both countries entered into bilateral agreements with China to use the yuan and their local currencies — the real and peso, respectively — for trade settlements. Brooks and Calomiris also argued that stablecoins provide people living under hyperinflation with easier access to the U.S. dollar.
In a call for stablecoin regulation, the authors noted that dedollarization could damage the United States economy, as the currency’s reserve status reduces the country’s borrowing costs, which is crucial during times of record government borrowing and spending. They also noted that it could affect American consumers’ purchasing power, increasing the cost of foreign goods.
“If stablecoins flourish, citizens of other countries will increase the demand for dollars independent of (and perhaps contrary to) their governments’ political decisions,” note the authors, adding that “U.S. politicians need to agree that re-dollarizing the global economy is important.”
Canterbury MP Rosie Duffield has resigned from the Labour Party.
The 53-year-old MP is the first to jump ship since the general election and in her resignation letter criticised the prime minister for accepting thousands of pounds worth of gifts.
She told Sir Keir Starmer the reason for leaving now is “the programme of policies you seem determined to stick to”, despite their unpopularity with the electorate and MPs.
In her letter she accused the prime minister and his top team of “sleaze, nepotism and apparent avarice” which are “off the scale”.
“I’m so ashamed of what you and your inner circle have done to tarnish and humiliate our once proud party,” she said.
Since December 2019, the prime minister received £107,145 in gifts, benefits, and hospitality – a specific category in parliament’s register of MPs’ interests.
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Ms Duffield, who has previously clashed with the prime minister on gender issues, attacked the government for pursuing “cruel and unnecessary” policies as she resigned the Labour whip.
She criticised the decision to keep the two-child benefit cap and means-test the winter fuel payment, and accused the prime minister of “hypocrisy” over his acceptance of free gifts from donors.
“Since the change of government in July, the revelations of hypocrisy have been staggering and increasingly outrageous,” she said.
“I cannot put into words how angry I and my colleagues are at your total lack of understanding about how you have made us all appear.”
Ms Duffield also mentioned the recent “treatment of Diane Abbott”, who said she thought she had been barred from standing by Labour ahead of the general election, before Sir Keir said she would be allowed to defend her Hackney North and Stoke Newington seat for the party.
Her relationship with the Labour leadership has long been strained and her decision to quit the party comes after seven other Labour MPs were suspended for rebelling by voting for a motion calling for the two-child benefit cap to be abolished.
“Someone with far-above-average wealth choosing to keep the Conservatives’ two-child limit to benefit payments which entrenches children in poverty, while inexplicably accepting expensive personal gifts of designer suits and glasses costing more than most of those people can grasp – this is entirely undeserving of holding the title of Labour prime minister,” she said.
Ms Duffield said she will continue to represent her constituents as an independent MP, “guided by my core Labour values”.