October 29, 2024

Dear Vice President Harris and Former President Trump,

The next presidential administration will determine whether America continues to lead the global financial industry—or forfeits that leadership. We are at risk of becoming the Rust Belt of financial services, and American prosperity and jobs are at stake.

The global financial system is closed, outdated and inefficient. This industry is vital to the U.S., yet it operates at the speed of the post office while the rest of the economy has rapidly innovated by successfully using technology and the internet. Bank accounts have existed for hundreds of years, yet 20% of the US population¹ and 40% of the global population² is unbanked or underbanked. Meanwhile, in only 15 years, 95% of Americans and 70% of the global population have adopted smartphone technology. In other words, more people in the world have smartphones than bank accounts³. Now is the opportunity to rethink how innovation can unravel the layers of financial opacity, complexity and risk that are holding back our economy.

Blockchain and digital assets are replatforming the financial system to operate on the internet in a safe, secure and transparent way. Stablecoins or digital dollars—U.S. dollars digitized via blockchain technology—are the crucial upgrade for the payment system that will revolutionize money movement, allow greater participation in the global economy and ensure the supremacy of the U.S. dollar for years to come. This is not a far off and hypothetical future. It is happening right now.

As CEO and Co-Founder of Paxos, one of the leading firms in tokenization and blockchain infrastructure, I urge you to implement a more welcoming and clearly defined regulatory environment for digital assets. That is how we will ensure that America remains the world’s largest and most innovative economy.

One of the hallmarks of Paxos is that we have always built within established regulatory frameworks. We offer blockchain and tokenization infrastructure to the world’s leading financial services companies to facilitate broad adoption of this transformative technology. Paxos was the first digital asset company in the country approved for a limited purpose trust charter from the New York Department of Financial Services in 2015. We have led the tokenization industry by being the first issuer of prudentially-regulated, U.S. dollar-backed stablecoins.

Despite our regulatory-first approach, the U.S. has become an inhospitable place for financial innovation. In the last four years, Paxos and its U.S.-based peers have faced countless examples of regulatory overreach⁴, questionable banking policies⁵ and onerous and needless legal actions, resulting in enormous costs in wasted time and money⁶. This hostility has stifled the industry’s growth and forced Paxos and its peers to seek regulatory clarity outside the U.S.

International jurisdictions such as Singapore, the UAE and even the European Union have quickly capitalized on U.S. missteps and created productive, regulated regimes that support safe innovation. In the absence of American leadership, international destinations will continue to emerge as stronger and more reliable partners for the blockchain and digital asset industry. They will also capture the economic benefits.

If U.S. regulators, policymakers, Congress and the next administration fail to support blockchain and digital asset adoption, the future of our financial industry is at risk. Undoubtedly more capital, jobs and expertise will migrate to geographies with clear and constructive policies. Unless Washington changes course, digital dollars will continue to move offshore, outside the purview of U.S. regulators and our banking system. This is a threat to our economic competitiveness and national security.

Thankfully, there is bipartisan interest in fixing this broken status quo. We look forward to collaborating with the next administration and lawmakers of both parties to craft and implement a stablecoin framework that drives innovation and demonstrates U.S. leadership on digital assets. Such reforms are essential if America hopes to shape the future of global finance and maintain our economic vitality.

Sincerely,

Charles Cascarilla

CEO and Co-Founder, Paxos