US Crypto Maneuvering could turn it into a Digital Currency Leader
May 31, 2022In the realm of digital currencies, the national borders and countries themselves should not play a huge role. That was the key idea behind the notion of the bitcoin network and the core whitepaper that it provided basically outlined how the same system should provide an alternative to any fiat currency. However, the reality of the economic and financial systems means that nothing is truly independent of anything else. In the case of digital currencies, their relevance and widespread use slowly make them something no country can easily dismiss or ignore. The same goes for the biggest economy in the world, the United States of America.
Here, the role and application of digital currencies is a very dynamic domain and one that keeps evolving year by year. But, even in this ever-shifting setup, there are patterns that many experts from the same domain are slowly recognizing as an establishment of the future leaders in the same cryptosphere. That future is not set or fully defined, but the prospects are still very clear and becoming more so with every passing fiscal quarter. If the same trend continues, the role of the US as the informal leader of the crypto market movement might grow into something much larger.
Stablecoin Issue
The collapse of the Terra blockchain and its UST stablecoin has been among the worst developments in the history of cryptocurrencies. It brought about total chaos in the markets and resulted in many billions of USD lost from the market capitalization. It also once more ignited a very harsh debate taking place in Washington D.C. that wants to see digital currency regulated on a much higher level than it is now.
Of course, everyone who follows the cryptosphere, no matter if they are an esports player or a BTC whale, fully understands that the stablecoin phenomenon is a crucial one for the whole digital currency domain. But, with Luna and UST taking such a drastic plunge, it is hard to argue that there should not be many more drastic mechanisms of regulation, especially when a sudden collapse can take down the whole market with it.
Important Innovation
While stablecoins rarely take the front and center of any crypto discussion, they are still an invaluable element of the markets. In essence, they are a crucial innovation that offers a range of benefits to its users, and that goes for the US residents in particular. Overall stablecoins can improve any payment system and transfer process, covering both efficiency and effectiveness. They are able to reduce costs and speed up the process of settlement for both consumers and businesses. At the same time, they do this by offering access to their benefits to anyone and anywhere.
The economic status or background of the stablecoin users makes no difference to these systems. That is a big means of enforcing the interests of the US across the globe. That goes even for the competitive domains of finance where the US is taking on its political adversaries like Russia and China. So, stablecoins that are pegged to the USD enforce the leadership status of the US in terms of their influence on the global economic and financial system. That means that in a way, stablecoins are one of the most important elements of the crypto domain for the US as a country that is exerting its influence across the globe.
Regulatory Demands
The usefulness of stablecoins inside and outside of the US is indisputable. However, on the other hand, the very public and very painful Terra implosion is not something that the regulators or policymakers can simply ignore. So, they must act and do something in the eyes of the wider public that makes a similar event like this less likely or ideally impossible to happen again. That is why the US Treasury Secretary stated in congressional testimony that the executive order of President Joe Biden that came about earlier in 2022 is still active.
The same order guides the federal agencies to take on comprehensive studies of cryptocurrencies and their ecosystems. The studies will report on the current regulatory policies and offer future solutions. Those solutions should guide future regulatory priorities and changes that are necessary for the same market. However, that will certainly take time and the process has to go through a very divided US political system. Here, it is impossible to expect all manner of issues and hurdles. That is why, in a lopsided way, the crypto industry can know that there is no immediate risk of shortsighted regulation that could jeopardize the development of further blockchain and digital currency solutions, including those related to stablecoin technology.
Crypto Liberties
Aside from the ongoing issue of stablecoin regulation, the key element of the crypto markets in the US is the fact that they are set in a very liberal and crypto-friendly environment. This might not seem like it is the case at the first glance, but in reality, all of the rules and regulations in the US actually offer a comparatively great environment for the development of digital currencies, blockchain systems, and associated technologies. Unlike in other major nations, developers of blockchain tech know what the rules of the game are and what they can expect from the regulators inside of the US. That goes for stablecoins as much as it does for things like BTC tokens.
That is a huge boon for any development company, no matter if they are working on things like the Lightning network or developing brand new systems for the metaverse and Web 3.0 services. The aim of the US government should be to support these developers and also find ways to protect users. If it manages to do just that, the playing field that it now operates could envelop the entire world. That would basically give rise to the dominance of US stable coins that are pegged to the USD and thus remain a digital version of the present balance of powers. In the currently insatiable geopolitical arena, most politicians in the US could easily stand behind that notion.
Source: Coindesk