At a hearing convened by the U.S. House Financial Services Committee on March 11, lawmakers and industry experts discussed the importance of stubcoins in US dollar support in the financial system and the urgency of the regulatory framework for these assets.
Titled “Navigating the Digital Payments Ecosystem: A Study of the Federal Framework on Payment Stability and the US Central Bank’s Digital Currency Outcomes,” the hearing also discussed potential concerns about the US Central Bank Digital Currency (CBDC).
Stablecoins vs. CBDCS
The hearing addressed the potential benefits caused by stubcoins and criticised the detrimental properties of CBDCs. French Hill, chairman of the House Financial Services Committee, argued that Stablecoins offer more advantages than CBDC by promoting competition and innovation.
According to Hill:
“Unlike Stablecoins, which operate in highly competitive markets, CBDC will concentrate its financial strength within the federal government, limit consumer choices, and undermine the innovations that have made our financial markets the world’s strongest.”
Hill further emphasized that if properly regulated, stubcoin can strengthen control of the US dollar and modernize payment systems without overly controlling government control.
Representative Bill Huizenga reiterated the possibility of Stablecoins and said it could simplify the US payment system. Additionally, Rep. Andy Burr added that Stablecoins will help maintain the US dollar status against competitors, including foreign CBDCs, such as the digital original.
Paxos CEO Charles Cascarilla has dismissed the notion that CBDC offers benefits beyond what Stablecoins has to offer. He said:
“Historically, US innovation in both technology and financial systems has come from the private sector, and that is what we should continue to accept.”
Rep. Tom Emmer has supported the US ban on CBDC and signed an executive order banning them by saying, “I am grateful to President Donald Trump for understanding this.”
EMMER refers to the order Trump signed on January 23 to establish a framework to drive stubcoin growth while banning federal agencies from pursuing CBDC plans.
Regulatory Considerations
The hearing strengthened growth in which Stubcoin needed a clear legal framework to ensure stability and recruitment while preventing government overreach.
Rep. William Timmons stressed that regulatory clarity is a priority, noting that digital assets remain vulnerable to enforcement measures that could promote innovation abroad without clear law.
Stable laws aimed at regulating digital payment methods, such as Stablecoins, have been central to the debate. The bill proposes allowing banks and non-banks to carry out different surveillance based on the amount issued.
It also requires that US dollars or approved assets fully support the steady-state coin and ensure that public redemption policies and subject issuers ensure bank-like supervision.
Caroline Butler, global head of digital assets at BNY Mellon, stressed the importance of a stable legislative asset separation framework, saying that client assets should never be entrusted to corporate assets.
Cascarilla strengthened this stance, arguing that legal protection for reserve holdings is important to maintain Stablecoin’s value.
Randall Guynn, chairman of Davis Polk & Wardwell’s Financial Institutions Group, also highlights the requirements for stable legislation that ensures that Stablecoins’ safe assistance will make these assets the “no question” type.
Carroll House, a senior fellow at the Geo Economic Centre at the Atlantic Council, recognized the cybersecurity provisions of stable laws and emphasized their importance in protecting digital financial infrastructure.
Stubcoins and financial inclusion
Beyond regulatory considerations, the hearing pointed to the role of stubcoins in financial inclusion.
Cascarilla noted that Stablecoins provides a way for unbanked individuals to access digital dollars via smartphone wallets, allowing financial participation of billions around the world who lack traditional bank access.
Banks are also seeing their role in the Stablecoin ecosystem. Butler said financial institutions can provide trust and confidence and ensure that the ridiculous payment mechanism evolves with traditional payment railroads.
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