Paxos CEO warns US could become ‘rust belt of finance,’ urges stablecoins

In a recent open letter, Paxos CEO Charles Cascarilla expressed concerns that the United States risks falling behind in global finance without adopting stablecoin technology. 

Addressed to current presidential candidates, Vice President Kamala Harris and former President Donald Trump, the letter warned that outdated financial systems could lead the U.S. into economic decline, describing this potential scenario as a “Rust Belt of financial services.”

Cascarilla highlighted the inefficiencies within traditional financial systems, noting that millions of Americans remain unbanked or underbanked despite rapid technology adoption worldwide.

Stablecoins as the solution to inefficiency 

Cascarilla pointed to stablecoins as a solution, describing them as digital representations of the U.S. dollar built on blockchain technology. 

Stablecoins enable faster and more accessible payments, providing a critical upgrade to the nation’s payment infrastructure. Cascarilla argues that this technology could expand financial access for underserved populations and reinforce the dollar’s role as a global currency leader.

In the third quarter of 2024, stablecoin market capitalization reached an all-time high of nearly $170 billion, driven by adoption and regulatory clarity from the EU’s new crypto rules, according to Coinbase and Glassnode.

Stablecoins have gained traction as a payment tool and are widely used in remittances and cross-border transfers.

Anthony Pompliano recently suggested that stablecoins could become the primary medium in a machine-driven economy as transaction volumes neared $20 trillion year-to-date.

While the European Union and countries like Singapore and the UAE have implemented progressive crypto regulations, Cascarilla noted that U.S. regulatory uncertainty has made it challenging for firms like Paxos to operate domestically. 

He expressed concerns that without a clear regulatory framework for digital assets, the U.S. may lose jobs, capital, and innovation to countries that are more supportive of blockchain technology.