The digital payments landscape is undergoing a major shift, which is being driven by blockchain technology and the rise of stablecoins.
In a testimony before the U.S. House Committee on Financial Services, Charles Cascarilla, CEO and Co-Founder of Paxos, underscored the urgent need for the United States to embrace this transformation.
Representing Paxos—a regulated financial institution founded in 2012 to modernize finance using blockchain—Cascarilla highlighted stablecoins as a national imperative to maintain the U.S. dollar’s global dominance while modernizing an outdated financial system.
Stablecoins, digital dollars operating on blockchain networks, are redefining the money movement.
Unlike volatile cryptocurrencies like Bitcoin, stablecoins such as Paxos-issued PayPal USD (PYUSD) are pegged 1:1 to the U.S. dollar, backed by cash and cash equivalents in a bankruptcy-remote trust.
This structure ensures stability and trust, blending traditional finance’s security with blockchain’s efficiency.
Cascarilla emphasized that stablecoins are not speculative assets but a practical evolution of existing dollars—akin to cash, bank deposits, or PayPal balances—offering instant, low-cost, 24/7 transactions accessible via smartphone and internet.
Domestically, stablecoins promise to bridge financial inclusion gaps.
With 20% of Americans unbanked or underbanked, per FDIC data, and smartphones outnumbering bank accounts globally, blockchain-based dollars could eliminate high fees like ATM charges and wire costs that burden working families.
Internationally, stablecoins reinforce dollar dominance by delivering U.S. currency to regions with unstable economies, countering the rise of alternative assets like gold or foreign central bank digital currencies (CBDCs).
Cascarilla argued that private-sector innovation, not a U.S. CBDC, is the key to this future, citing historical precedents like ATMs and electronic payments.
The global stakes are high. Jurisdictions like Japan, Singapore, and the EU have already implemented clear digital asset frameworks, attracting innovation while the U.S. lags.
Major players like PayPal and Stripe have now adopted Paxos’ stablecoin infrastructure, with Bank of America eyeing its own stablecoin.
Citi predicts that by the year 2030, $5 trillion in global assets could shift to stablecoins, up from $200 billion today.
Without proper action, Cascarilla warned, the U.S. risks becoming the “rust belt” of finance, losing jobs and influence to offshore systems.
The STABLE Act, a legislative proposal praised by Cascarilla, aims to secure U.S. leadership by regulating stablecoin issuers under the Office of the Comptroller of the Currency (OCC).
It mandates 1:1 reserves, anti-money laundering (AML) compliance, as well as transparency—standards Paxos already meets globally.
However, Cascarilla suggested enhancements: accelerated reciprocity timelines to recognize equivalent foreign regulations, ensuring seamless cross-border use of stablecoins like Paxos’ Global Dollar (USDG), and parity between state and federal oversight to preserve innovation-friendly dual regulation.
The message is clear: the U.S. must act swiftly and decisively in order to set global standards for digital payments.
The STABLE Act, with refinements, could substantially reduce costs, boost financial inclusion, and cement the dollar’s reserve status.
As Cascarilla concluded, failure to lead may potentially risk ceding control to others, threatening America’s economic future.
The digital payments ecosystem is no longer a niche segment—it’s entering the mainstream, and the US must decide how it aims to take advantage of its growth potential.