The U.S. Senate recently passed a bill to develop a regulatory framework for stablecoins and a cryptocurrency expert says clarity on the ‘rules of the road’ would be welcome by investors.
Jillian Friedman, chief operating officer at Symbiotic says stablecoins represent the first major case of blockchain technology used as payment outside of the crypto world.
“We’re seeing stablecoins being used as a means of payment and part of, like, the global financial plumbing well outside of the crypto world or crypto trading,’ Friedman told BNN Bloomberg in a Friday interview.
Stablecoins are a type of cryptocurrency pegged or tied with the U.S. dollar and are commonly used by crypto traders to move funds between tokens.
The bill marks a major step towards legitimizing a once-niche but now fast-growing area of the crypto market and it’s expected the market will continue to grow further once the U.S. legislation has passed.
“People want clarity in terms of the rules of the road,” said Friedman.
“People are really excited about the potential and up until now and relatively recently, it hasn’t been clear how they can actually build with it and what’s allowed and what’s not.”
Friedman says the move by the U.S. to develop a framework for Stablecoins could also be welcomed in Canada.
“This is a massive innovation opportunity, and it would be really great to see that kind of acknowledgement and encouragement at the Canadian federal level as well,” said Friedman.
Friedman said stablecoins are used as an efficient way to send money regardless of the underlying technology. She said she uses it to mostly to operate her own business.
“It doesn’t mean we’re trading with bitcoin,” said Friedman. “It means that when we pay suppliers, we’re sending payments, not through wires but in a manner that’s as easy as it is to send an email. I can’t tell you how refreshing that is compared to operating a business using legacy financial tools and all the friction that’s required”.
If the U.S. bill is signed into law, stablecoins would be required to be backed by liquid assets such as U.S. dollars and short-term Treasury bills, and for issuers to publicly disclose the composition of their reserves monthly.
