America can still save the US dollar and make it a total world hegemon.
There is only a slight difference in the opinion of the crypto community about regulators. They believe that if a legislator is able to appreciate the value of bitcoin and other cryptocurrencies, and if he can understand and accept the prospects of blockchain technology in improving the financial system, then the economy of a given country can gain a lot in the near future. This is the US economy envisioned by Randal Quarles, the Federal Reserve's vice chairman for Oversight, who recently spoke very favorably about cryptocurrencies.
His speech shocked the community. The Federal Reserve Vice Chairman of Oversight is appreciated by cryptocurrency experts, and his speech is referred to as a manifesto that shows how the US government can control the power of cryptocurrency innovation for personal gain such as serving international interests while focusing on establishing an even broader role for the dollar's soft power in the global economy. What caught their attention most was Quarles' argument about stablecoins. According to him, the introduction of stablecoins for general use "could further increase the international use of the dollar by making cross-border payments faster and cheaper, and this could potentially be implemented much faster and with fewer flaws," he said.
All of these were wise words for many. Additionally, stablecoin supporters believe in the lenient regulatory stance of the US against private issuers of dollar-linked tokens using open source platforms such as Ethereum. Such platforms enable better digital dollar innovation compared to the stablecoin issued by the Central Bank. According to Castle Island Ventures partner Nica Carter and Dante Disparte, director of strategy, Quarles' remarks will be remembered as a groundbreaking speech. It is not certain, however, whether Quarles' views are held in high esteem by the Fed. Everyone remembers when Fed chairman Boson Eric Rosengren issued a warning and described stablecoins as "new disruptors" and said they posed a threat to financial stability.
So if the US were to plan to follow Quarles' words and advice, it could mean, in the eyes of many experts, some salvation for the US dollar, which could expand its influence through such actions. The cryptocurrency community cautions that failure to comply with these guidelines could result in the loss of the global dollar standard as the reserve currency.
The issuance of the digital dollar [CBCD] by the central bank would help the dollar to move beyond its current status as a unit of account in world trade and a key reserve asset for capital markets, and to spread beyond the United States in day-to-day transactions. Therefore, if cryptocurrency supporters get along with the US administration, it will show that lifting the restriction in the form of hard surveillance and Wall Street protection will ultimately help in increasing monetary innovation as well as improving financial integration.
One of the most important facts about Quarles' speech was allowing private stablecoin issuers to fuel the development of the digital dollar. He believes that America's centuries-long enthusiasm for "novelty", which he believes has made America home to many scientific and practical innovations, will continue to serve the country. Open blockchain platforms will provide space for more innovation than the closed doors of CBDC, which are being developed by central banks that are rarely known as a breeding ground for novelty. There is a reason why there is breakneck innovation in decentralized finance (DeFi) because it is a permit-free environment. Which basically means developers don't have to wait for permission from the corporate board to build solutions on a particular platform. In addition, they are free to move resources within the DeFi ecosystem.
Recently, in December, a bill was presented to the US House of Representatives that would require stablecoin issuers to apply for banking licenses. In the meantime, all of this could deliver a price worth paying if the regulation is genuinely trying to help protect financial stability. However, keep in mind that too many rules would likely prevent ordinary people from making quick and easy dollar payments anywhere in the world. Stablecoins can be known because of their nature as a bearer instrument. These are known as the digital version of cash, the value of which is intrinsic and can be automatically transferred peer to peer. However, there are currently some specific limiting rules that say that KYC and AML are required for larger deals. Therefore, the bank "must" control them for "our" welfare and safety. So stablecoins will most likely follow the current banking system where cross-border payments remain expensive and very slow compared to new technological opportunities.
