Payment stablecoins and digital assets offer immense technological potential, providing faster, cheaper, safer, and more accessible means of financial value exchange while ensuring that the digital economy is rooted in democratic principles that promote a safe and competitive marketplace. The United States has a unique opportunity to shape the development of a safer, more accessible, global digital economy. Circle applauds the leadership of the White House Office of Science and Technology Policy (OSTP) for establishing a groundbreaking, whole-of-government National Digital Assets Research and Development (R&D) Agenda to identify priorities for this important sector of the economy.
Circle welcomed the opportunity to respond to the White House request for public input to help shape this important initiative. This R&D agenda serves as an important first step towards harnessing the multidisciplinary benefits of cryptography and blockchain in a way that supports economic growth and development, protects consumers, fosters responsible innovation, and promotes American competitiveness.
As a global financial technology firm providing internet-native payments on open blockchains, Circle is focused on developing digital assets that solve real-world solutions, spur responsible innovation, and create a more open, accessible, and inclusive financial system. As a part of this effort, we recognize the distinct role that regulators and government play in establishing the policy priorities, safeguards, standards, and infrastructure to enhance the benefits and reach of the underlying digital assets technology for the benefit of all.
CIRCLE’S KEY RECOMMENDATIONS
Circle supports capitalizing on the technological potential of digital assets, in particular payment stablecoins, to ensure that the digital economy is rooted in democratic principles and a focus on U.S. competitiveness.
Payment stablecoins simplify transactions by serving as both a financial instrument and parallel transaction details, reducing complexity and costs for a function currently performed by a combination of many systems and institutions. This reduces settlement and credit risk; is inherently traceable; and can facilitate real-time market information.
Payment stablecoins and decentralized finance protocols have the proven ability to drastically reduce consumer payment costs, such as for remittances, by 80% — helping to enhance cross-border transfers and support a more inclusive payment landscape.
Circle found that reductions in transaction costs for beneficiary institutions and charities using payment stablecoins could amount to between 1.92% and 2.70% per donation compared with a traditional payment processor.
The near-instantaneous nature of payment stablecoins, combined with the ability to make payment versus payment transactions facilitated by distributed ledger technology, have the capability to eliminate settlement risk for foreign exchange transactions.
Regulated USD-denominated and -backed stablecoins import robust compliance measures and the rule-of-law to the digital asset space, while ensuring that the United States maintains its competitive advantage in the digital economy.
Circle believes that rigorously examining the cross-functional benefits, potential limitations, and enabling technologies and standards of the digital asset ecosystem will make the industry safer, and lead to scientific discoveries that could benefit many different fields.
Circle encourages the OSTP – and the broader Administration – to focus on three key areas to support development of the digital assets ecosystem:
Circle recommends:
Circle’s full responses are available here.