In a significant turning point for America’s financial future, digital currencies are poised to revolutionize the country’s age-old financial infrastructure, offering the potential to bolster the U.S. dollar and make financial transactions faster, easier, and more affordable for both families and businesses. To achieve this vision, Washington must unite behind legislation governing payment stablecoins, prioritizing financial stability and consumer safety.

Payment stablecoins, far from being a niche novelty, have emerged as a critical foundation for modern-day payments, remittances, commerce, and even humanitarian aid. Their rapid growth is a testament to their real-world utility, as digital dollars traverse the globe at the speed and scale of the internet.

The far-reaching benefits of digital dollars are particularly significant for working-class American families, who often bear the brunt of high fees associated with sending and spending their hard-earned money. Picture the contrast between wiring funds and sending a simple text message across the country – have you ever paid a hefty $6 fee and waited for three days to exchange words with a loved one?

The frictionless nature of stablecoins is helping to extend financial security and inclusion to vulnerable populations, both within the United States and abroad, who face barriers to accessing traditional brick-and-mortar banking services. A notable example is the United Nations, which has started using stablecoins to provide humanitarian assistance to Ukrainian refugees.

Congress is beginning to grasp the significance of this financial transformation. During the summer, several congressional committees advanced bills aimed at better regulating the digital asset economy. Among these, the Clarity for Payment Stablecoins Act, approved on a bipartisan basis by the House Financial Services Committee, stands as a cornerstone for the other proposed bills.

Congress should move forward and enact this bill or another bipartisan alternative, ensuring the following:

1. Strong Supervision and Risk Management: Establish robust oversight and risk management protocols for stablecoin issuers to ensure financial stability.
2. Asset Backing Requirements: Impose strict rules on the types of assets that can support digital dollars, guaranteeing their stability and value.
3. Consumer Protection: Enforce redemption and custody requirements that safeguard consumers’ interests, offering them peace of mind.
4. Transparency and Accountability: Implement comprehensive transparency, audit, and reporting requirements to ensure financial integrity.
5. Level Playing Field: Create a level playing field for both traditional banks and non-bank institutions, ensuring fair competition in the digital dollar arena.
6. Regulatory Collaboration: Define the roles of federal and state regulators in chartering and supervising stablecoin issuers, promoting cooperation and compliance.
7. Counterfeit Prevention: Prohibit the creation of “counterfeit” digital dollars by entities operating outside U.S. laws, safeguarding the nation’s financial integrity.

Both Republicans and Democrats share a common goal: for the United States to be a rule-maker, not a rule-follower. Therefore, it’s imperative for the Senate and the White House to collaborate with the House in advancing this legislation on a broad, bipartisan basis.

Former regulatory agency heads from both the Obama and Trump administrations, including Heath Tarbert, former Chairman of the Commodity Futures Trading Commission, are calling for urgent digital asset legislation. They assert that this is not just a matter of economic urgency but also one of national security and competitiveness.

The current financial system in the United States is laden with inefficiencies and friction. Whether it’s the burden of 3% credit card fees shouldered by small businesses, the scourge of overdraft charges, the interminable two-day delays for check clearance, or the anxiety of waiting for a paycheck to arrive, many of these costs could be eliminated by a well-regulated system where payments are settled digitally and instantaneously.

Digital dollars, or payment stablecoins, can pave the way for a modernized financial ecosystem. These cryptocurrencies offer a vision of a future where financial transactions are swift, efficient, and cost-effective. The benefits extend beyond mere convenience – they hold the promise of reducing financial inequality, promoting economic growth, and strengthening the country’s position on the global financial stage.

The ability of payment stablecoins to facilitate frictionless, instantaneous transactions can alleviate the financial hardships faced by countless Americans. From inner-city communities to rural areas, people who lack access to traditional banking services can now participate in the digital economy, conduct transactions with ease, and escape the burden of exorbitant fees.

Consider the case of an immigrant worker who regularly sends money back home to support family members. With payment stablecoins, the transfer can happen almost instantly, without the need for expensive intermediaries. This translates to more money in the hands of the recipient and a more efficient financial system overall.

Furthermore, as exemplified by the United Nations, payment stablecoins have the potential to revolutionize humanitarian aid efforts. They can be used to quickly and transparently deliver funds to those in need, circumventing the logistical challenges of traditional aid distribution.

At the heart of this financial revolution lies the potential to redefine the role of traditional banking institutions. While banks have long held a central place in financial transactions, the rise of payment stablecoins challenges the status quo. This shift encourages greater competition, efficiency, and innovation, ultimately benefiting consumers.

The advantages of embracing payment stablecoins extend well beyond the realm of individual financial transactions. By reducing the time and cost associated with payments, businesses, especially small enterprises, can operate more efficiently. This, in turn, fuels economic growth, as resources previously wasted on transaction fees can be redirected toward expansion and job creation.

In addition to streamlining domestic transactions, payment stablecoins can also enhance the international competitiveness of the United States. In an increasingly interconnected world, the ability to send and receive payments quickly and cost-effectively is a strategic advantage. By embracing this technology, the U.S. can solidify its standing as a global financial leader.

However, this transformative potential can only be fully realized with the support of effective legislation. Without proper regulation, there is the risk of instability, fraud, and misuse of digital dollars. The bipartisan legislation being considered by Congress aims to address these concerns by establishing a comprehensive framework for oversight and consumer protection.

In conclusion, the adoption of payment stablecoins, or digital dollars, has the potential to revolutionize the U.S. financial landscape. This transformation promises not only greater convenience but also enhanced financial security, economic growth, and global competitiveness. By uniting behind bipartisan legislation that prioritizes financial stability and consumer safety, the United States can lead the way in modernizing its financial system, ensuring that all Americans, regardless of their background or location, can enjoy the benefits of a faster, more affordable, and inclusive financial future.