Bitwise CIO Matt Hogan said the US introducing comprehensive stablecoin legislation could signal the long-awaited “mainstreaming of cryptocurrencies.”
In a note to clients, Hogan theorized that stablecoin regulation could have an even bigger impact than the wildly successful Spot Bitcoin (BTC) ETF.
“While the launch of a Bitcoin ETF in the US is emblematic of this transition, it is not the only signpost. Elsewhere, BlackRock launches a tokenized Treasury fund on the Ethereum blockchain. Europe passed a comprehensive cryptocurrency bill, and Ray Dalio called on investors to own “debt-free money” like Bitcoin.
Matt Hogan, Bitwise CIO
Stars align for US stablecoins
Hogan pointed to several indicators that suggest the U.S. Congress is close to announcing a framework to oversee fiat-pegged cryptocurrencies.
The Lummis Gillibrand Payments Stablecoin Act was recently introduced in the Senate and garnered support from members from across the political spectrum. However, some in the cryptocurrency industry remain skeptical about the bill's impact on free speech due to the ban on algorithmic stablecoins.
Last week, Democratic Rep. Maxine Waters of the House Financial Services Committee announced an agreement with Committee Chair Patrick McHenry on stablecoin rules.
Waters told Bloomberg that several members of his committee, including Senate Majority Leader Chuck Schumer and Senate Banking Chairman Sherrod Brown, who is known for his anti-crypto sentiment, have been informed. He said he is leaning towards policy.
Federal Reserve President Chris Waller, Federal Research Chairman Jerome Powell, and US Treasury Secretary Janet Yellen have publicly expressed support for stablecoins, reflecting Washington's approach to this particular crypto sector. This is a sign that the trend may have reversed.
Three Catalysts Promote Bipartisan Interest
According to Bitwise CIO, there are three main reasons for the change in narrative. First, a coin pegged to the US dollar would allow more investors to access the popular US dollar currency, potentially cementing the US dollar's dominance globally.
The bill, if passed, would also increase demand for U.S. Treasuries. The stablecoin issuer already ranks 16th among the world's largest independent holders of U.S. debt.
Once integrated into the traditional financial system, existing players such as banks will be able to challenge Tether's dominance. The USDT provider has 125 employees and had profits of $6.2 billion last year. By comparison, Goldman Sachs, which has more than 45,000 employees, achieved profits of $8.5 billion. According to crypto.news, S&P researchers agree with this sentiment.
“This will be the first comprehensive crypto bill passed by Congress. It will allow large banks like JPMorgan Chase to enter the space, and it will allow large banks like JPMorgan Chase and Millions of people and businesses will benefit from the speed, low cost, and ease of use that crypto wallets, stablecoins, and blockchain-based payment rails offer. You will know.”
Matt Hogan, Bitwise CIO
