Paul Ryan Urges America To Embrace Stablecoins To Maintain Dollar Dominance

Former Speaker of the U.S. House of Representatives Paul Ryan on Friday emphasized the potential of stablecoins in safeguarding America’s financial future amidst mounting national debt concerns.

Stablecoins as a Solution to Debt Crisis

In an opinion piece in The Wall Street Journal, Ryan highlighted the escalating trajectory of national debt and the impending economic risks if left unaddressed.

He warned, “The U.S. is headed toward a predictable yet avoidable debt crisis,” pointing out that entitlement programs are significantly driving the debt.

Ryan proposed taking stablecoins seriously, noting their increasing role as net purchasers of U.S. government debt.

According to Ryan, “If fiat-backed dollar stablecoin issuers were a country, it would sit just outside the top 10 in countries holding Treasurys.”

The Strategic Importance Of Stablecoins

Ryan elaborated on the strategic timing of stablecoins’ emergence, asserting that their rise as a mechanism for promoting the dollar is crucial.

He mentioned that “The U.S. benefits from the dollar's status as the primary international reserve currency,” which provides cheap, reliable financing for fiscal spending and substantial influence over the global financial system.

However, he cautioned that the dollar’s dominance is under threat as the global economy becomes more digital and multipolar.

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China’s Digital Currency Advancements

Drawing attention to international competition, Ryan pointed out China’s strategic advancements in digital currency.

“Financial authorities in Beijing have made digital currency a pillar of the country's international-development strategy and foreign policy,” he noted.

Ryan emphasized that the U.S. cannot afford to remain passive as its largest international competitor strengthens its influence through digital financial infrastructure.

The Role Of Dollar-Backed Stablecoins

Ryan illustrated the importance of dollar-backed stablecoins in maintaining U.S. financial stability, especially as traditional large buyers of U.S. debt, like China and Saudi Arabia, retreat from the market.

He suggested that stablecoins could become a reliable source of new demand for U.S. government debt.

“Promoting dollar-backed stablecoins would follow a well-trodden path and offer clear near-term benefits,” Ryan wrote, comparing stablecoins to eurodollars that boosted dollar pre-eminence during the Cold War.

Ryan advocated for a sound regulatory framework for stablecoins, highlighting its bipartisan support in Congress. He stressed that such a framework could dramatically expand the use of digital dollars at a critical time.

“In an election year, given all the ugly politics to come, we sure could use a win,” he concluded.

Looking Ahead: Benzinga’s Future Of Digital Assets Event

As the financial landscape evolves, insights from experts like Ryan will be pivotal in shaping future strategies.

These topics and more will be explored at Benzinga’s Future of Digital Assets event on Nov. 19.

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