Brian Brooks, a partner at Valor Capital Group, said he believes that well-defined regulations for stablecoins can benefit the U.S. dollar. This stands in contrast to certain U.S. legislators who argue that such regulations might have negative impacts on the financial system and economy. Speaking at a CNBC program, he further said the apparent resistance of the Biden administration toward stablecoins is less than ideal.
Brooks, formerly served as the CEO of Binance’s U.S. division and as an acting U.S. Comptroller of the Currency. In Brooks’ perspective, a more optimal scenario would involve the U.S. government establishing a structured framework that permits stablecoins to be backed by U.S. dollars in a regulated manner. This approach, according to him, would encourage the growth in demand for stablecoins.
He emphasized that this would be beneficial for the global adoption of the U.S. dollar. However, Brooks pointed out that when governments impede stablecoins, a counterproductive dynamic emerges, leading to the challenges observed in the current situation.
Stablecoins are cryptographic assets, often in the form of tokens, that are pegged to the value of a fiat currency like the U.S. dollar or another asset such as gold. Brooks cited the example of countries dealing with high inflation where obtaining a U.S. dollar-denominated bank account is difficult.
In such cases, stablecoins pegged to the U.S. dollar offer a solution to meet the demand for a stable currency. He also emphasized the importance of stablecoins as a means to uphold the significance of the U.S. dollar, particularly during a period when various governments are considering reducing their reliance on it.
