‘Hyper-partisanship’ on CBDCs hinders crypto lawmaking: Circle exec
Sensible crypto legislation in the US remains “a live issue” but has hurdles to overcome, USDC issuer’s policy head says
Lightspring/Shutterstock modified by Blockworks
Partisan bickering around CBDCs is a distraction to passing sensible crypto legislation in the US, an executive at stablecoin issuer Circle says.
Central bank digital currencies (CBDCs) discussion has evoked a “hyper-partisanship” that has even bled into presidential campaign talking points, Dante Disparte, Circle chief strategy officer and head of global policy, said during a virtual press conference Tuesday.
Florida Gov. Ron DeSantis and fellow Republican presidential candidate Vivek Ramaswamy have expressed opposition to a CBDC in recent months, citing concerns around privacy.
US Rep. Tom Emmer, R-Minn., re-introduced a bill earlier this month that aims to block the Federal Reserve from directly offering a CBDC to individuals and using it to implement monetary policy.
Ohio Congressman Warren Davidson, also a Republican, said during a Sept. 15 hearing that a wrongly-structured system of money is “perhaps the biggest existential threat to Western civilization.” Meanwhile Rep. Stephen Lynch, D-Mass., argued during the session that a government-issued digital dollar could be designed to protect privacy while streamlining payments.
“If you care about the role of the dollar, if you care about dollar competitiveness, then […] bright lines on which parties can innovate and use the dollar as a basic settlement currency should not be drawn,” Disparte said. “And those lines are being drawn pretty much in a partisan matter in the United States.”
Congress members Maxine Waters, D-Calif., and Patrick McHenry, R-N.C., introduced a stablecoin-focused bill last year — proposed legislation that Disparte said is “the architecture that anyone will have to pick up moving forward.”
“As goes stablecoins in some ways, so goes the rest of the digital assets agenda in the United States,” the Circle executive added.
The Senate would likely look to reconcile parts of that bill with anti-money laundering, Bank Secrecy Act and counter-terrorism financing issues in mind, Disparte noted.
Still, he added, debate and engagement around digital dollar- and broader crypto-related regulations is keeping it “a live issue.”
Sens. Cynthia Lummis, R-Wyo., and Kristen Gillibrand, D-N.Y., introduced a revamped Responsible Financial Innovation Act bill in July. It would create a law enforcement working group in an effort to tackle stablecoin regulation. This could include new reporting and registration requirements, among other actions.
“That’s the most credible existing piece of legislation on the Senate side that can be attached to the [McHenry-Waters] framework,” Disparte said. “But the question is, in a world where impeachments are back on the docket and a government shutdown looms, will people be able to overcome the partisan environment and do something sensible for digital assets?”
The comments come as a 2022 Bank of International Settlements survey found 93% of central banks are exploring CBDCs.
European Central Bank President Christine Lagarde told the EU Parliament’s Economic and Monetary Affairs Committee on Monday that while a digital euro pilot could be greenlit later this year, it would likely take at least two years.
“If it can be user friendly, if it can be free, if it can be a universal digital mode of payment throughout the entire euro system, I think it will have checked many of the boxes which I believe would characterize it as success,” Lagarde noted.
Disparte told Blockworks he believes dollar digital currencies like USDC can co-exist with CBDCs — a stance expressed by Federal Reserve Chair Jerome Powell last year. USDC’s market capitalization stood at roughly $25.6 billion on Tuesday.
“Policymaking should ensure an even playing field, robust competition and scalability, with careful consideration of technological and operational risk, while preserving the two-tier banking and payment system,” Disparte said.
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