Earlier this week we saw the long-awaited release of the Report on Stablecoins from the President’s Working Group (PWG) on Financial Markets which provided the industry with insight into how federal regulators view the future of stablecoin arrangements. At Centre, our deep belief is that stablecoins will increasingly become an integral part of the financial system, and we see the transformation stablecoins will bring to our payments landscape as creating a more inclusive financial system for all participants.
We also recognize that this is just the next step in a lengthy process to clarify a federal, state, and international framework for potential further regulation of stablecoins. We support changes that focus on critical matters, such as operational resiliency and consumer protection. The recommendations set forth in the PWG report are an important contribution to the conversations, collaboration, and deep study that will inform our financial future.
As acknowledged in the report, stablecoins have the ability to “support faster, more efficient and more inclusive payments options.” Our mission is to make those capabilities available to everyone, everywhere through a network of interoperable stablecoins built on public, permissionless blockchain technology. USD Coin (USDC) is already the fastest growing dollar digital currency in the market, and much of its tremendous growth over the past year has been driven by confidence created by Centre’s standards.
The reality of the asymmetric timelines between technological innovation and thoughtful regulation means that Centre will continue to play an important role in providing industry-wide standards and guidance that will encourage all participants to act responsibly and responsively. Missing from the report is any discussion of ways in which stablecoins, including USDC, operate within existing state regulatory frameworks. Centre looks forward to contributing to discussions about how stablecoin regulation will evolve at both the state and international levels.
The path for stablecoins to drive improvements in the payments landscape and address broad financial inclusion is not without its challenges. There is work to be done on issues such as legal finality and operational resiliency, especially as market-leading stablecoins begin to comprise greater proportions of global value transfer. The reward for this work, however, will be transformational. The growth of international remittance corridors using stablecoins will reduce fees and frictions for those that can afford them least. Programmable money and real time payment and settlement will create economic advancement by improving existing infrastructure and creating opportunities for financial inclusion. Our goal, as we continue to engage with stakeholders in the coming months, is the preservation of innovation and an open financial system in pursuit of our mission to connect every person, every merchant, every financial service, every currency. Everywhere.