US lawmaker: Stablecoins are key to strengthening dollar dominance

A U.S. congressman stressed that a well-regulated stablecoin market is essential to maintaining the dollar’s ​​global dominance, modernizing payments, and expanding financial access without involving excessive government intervention.

Lawmakers debate the role of stablecoins in safeguarding the future of the dollar.

House Financial Services Committee Chairwoman France Hill (R-AR) stressed at a March 11 congressional hearing that a well-regulated stablecoin market is essential to maintaining the dollar’s ​​global dominance. The hearing, titled “Navigating the Digital Payments Ecosystem: Examining a Federal Framework for Payment Stablecoins and the Consequences of a U.S. Central Bank Digital Currency,” explored how stablecoins can strengthen the dollar’s ​​position in international finance.

The lawmaker claimed:

A properly regulated stablecoin market can enhance the dollar’s ​​dominance, modernize our payments infrastructure, and promote financial access without involving excessive government intervention.

The committee discussed the STABLE Act, which seeks to provide clear regulatory standards for stablecoin issuers while ensuring compliance with financial regulations.

Hill stressed that stablecoins are already contributing to the dollar’s ​​impact by facilitating global transactions and reducing friction in cross-border payments. He stressed:

Billions of dollars in stablecoins are traded every day, reducing friction in cross-border payments, simplifying commercial transactions, and providing broader access to digital financial instruments for more communities.

The committee has been developing stablecoin legislation since 2022, and the updated STABLE Act reflects stakeholder input to strengthen operational standards and regulatory oversight. By ensuring that stablecoins operate within a clear legal framework, lawmakers aim to enhance their role in international finance while strengthening the dominance of the U.S. dollar as the world's primary reserve currency.

Hill also warned that central bank digital currencies (CBDCs) could undermine the competitive advantage of the dollar by concentrating financial power within the federal government. He argued: "A government-controlled digital dollar would put the Federal Reserve in direct competition with the private sector and undermine the progress made by stablecoins."

He believes that CBDCs could "suppress competition, jeopardize financial privacy, and weaken the role of the U.S. banking system." The hearing also discussed Representative Tom Emmer's Anti-CBDC Surveillance State Act, which aims to prevent excessive government intervention in the digital currency field. Hill reiterated the committee's commitment to ensuring that the United States remains a leader in financial innovation, and stablecoins play a key role in maintaining the global dominance of the U.S. dollar.