Paxos CEO warns US could become ‘rust belt of finance,’ urges stablecoins

In a recently published open letter, Paxos CEO Charles Cascarilla expressed concerns that the United States risks being left behind in global finance unless it embraces stablecoin technology.

Addressed to current presidential candidates Vice President Kamala Harris and former President Donald Trump, the letter warned that outdated financial systems could plunge the United States into economic decline, describing that potential scenario as the “Rust Belt of financial services.”

Cascarilla pointed out inefficiencies in traditional financial systems, stating that despite the rapid adoption of technology around the world, millions of Americans are unbanked or underbanked.

Stablecoins as a solution to inefficiency

Cascarilla pointed to stablecoins as a solution, describing them as digital representations of the US dollar built on blockchain technology.

Stablecoins provide a critical upgrade to the country’s payment infrastructure, making payments faster and more accessible. Cascarilla argues that this technology could expand financial access for underserved populations and strengthen the dollar’s role as the global currency leader.

According to Coinbase and Glassnode, stablecoin market capitalization in the third quarter of 2024 reached an all-time high of approximately $170 billion, thanks to the adoption of the EU’s new crypto rules and regulatory clarity.

Stablecoins are gaining traction as a means of payment and are widely used in remittances and cross-border transfers.

Anthony Pompliano recently suggested that stablecoins could become the primary tool in a machine-driven economy, with transaction volumes approaching $20 trillion to date.

While the European Union and countries such as Singapore and the UAE are implementing progressive crypto regulations, Cascarilla noted that regulatory uncertainty in the US is making it difficult for companies like Paxos to operate domestically.

He expressed concern that without a clear regulatory framework for digital assets, the United States could lose jobs, capital and innovation to countries that are more supportive of blockchain technology.