US lawmakers are set to engage in critical discussions on the regulatory future of digital assets, with stablecoins and central bank digital currencies (CBDCs) at the center of the debate. Representative Tom Emmer is pushing for legislation to prevent the introduction of a US CBDC, citing concerns over financial surveillance, while Paxos CEO Charles Cascarilla is urging Congress to establish clear guidelines for stablecoin regulation to ensure international consistency and prevent regulatory arbitrage. As policymakers navigate these complex issues, the outcome could shape the role of digital currencies in the US financial system for years to come.
Tom Emmer Advocates for Stablecoin Legislation While Denouncing CBDCs as a Threat to American Values
In a charged congressional hearing on March 11, US Representative Tom Emmer reinforced his stance against central bank digital currencies (CBDCs) while advocating for stablecoin-friendly legislation. Speaking before the House Financial Services Committee, Emmer labeled CBDCs as a potential instrument of financial surveillance and urged lawmakers to prioritize regulatory frameworks that support stablecoins instead.
The hearing followed Emmer’s March 6 reintroduction of the CBDC Anti-Surveillance State Act in the House of Representatives. The proposed bill aims to prevent any future administration from issuing a CBDC without explicit congressional approval, blocking what Emmer views as an existential threat to financial privacy and individual freedom.
During his remarks, Emmer did not hold back in his criticisms of CBDCs, emphasizing that their implementation could “upend the American way of life.” He argued that allowing unelected officials to oversee such a financial system would centralize monetary power in dangerous ways.
“CBDC technology is inherently un-American,” Emmer asserted, warning that a government-controlled digital currency would grant excessive authority to federal agencies, enabling potential financial surveillance over citizens. His concerns echo broader libertarian fears of state-controlled money and its implications for personal freedom.
Emmer’s opposition to CBDCs is bolstered by former President Donald Trump’s stance. On Jan. 23, Trump signed an executive order prohibiting the establishment, issuance, and circulation of CBDCs within the United States. However, Emmer argued that legislative backing is still necessary to ensure that future administrations do not reverse Trump’s order.
If signed into law, Emmer said his legislation would “prevent a future administration from creating such an obvious tool for financial surveillance against its own citizens,” making a case for the long-term necessity of the Anti-Surveillance State Act.
Emmer’s skepticism about CBDCs is shared by a significant portion of the US crypto community and policymakers who argue that state-backed digital currencies could erode financial autonomy and privacy. Unlike decentralized cryptocurrencies such as Bitcoin, CBDCs would be controlled by the Federal Reserve, allowing the government to track, freeze, or even restrict transactions based on policy decisions.
Stablecoins, which are pegged to fiat currencies like the US dollar, have become a critical component of the crypto economy, enabling seamless digital transactions without the volatility associated with assets like Bitcoin or Ethereum. Given their increasing role in decentralized finance (DeFi) and global payments, industry leaders argue that pro-stablecoin legislation is crucial for maintaining US leadership in digital asset innovation.
Emmer believes that stablecoins offer a viable alternative to CBDCs by bringing traditional finance on-chain while preserving user privacy. He contends that the US should actively promote private sector-led stablecoin solutions instead of introducing a state-controlled digital dollar.
Political Influence of Crypto Firms Raises Concerns
The growing push for crypto-friendly legislation comes against the backdrop of increasing political spending by digital asset firms. A March 7 report from the Center for Political Accountability (CPA) highlighted concerns over the influence of cryptocurrency companies in US politics, particularly regarding unchecked political donations that could sway regulatory policies.
According to the CPA report, crypto companies have spent a staggering $134 million on the 2024 US elections in an attempt to shape legislative decisions. While this level of political engagement signals the sector’s expanding influence, it also raises questions about regulatory stability and the risk of policy capture.
Critics argue that large-scale political contributions could pressure lawmakers into drafting favorable regulations for the industry—potentially at the expense of broader financial stability and investor protection. On the other hand, crypto advocates see such lobbying efforts as a necessary counterbalance to traditional banking and financial institutions that have historically dictated monetary policy.
US Lawmakers Prepare for Heated Debate on Stablecoin Regulation as Paxos CEO Pushes for Global Reciprocity
In related news, industry leaders are pressing lawmakers to adopt clear and enforceable guidelines for digital asset oversight. Charles Cascarilla, co-founder and CEO of Paxos, is set to testify before the House Financial Services Committee, advocating for cross-jurisdictional reciprocity in stablecoin regulations to prevent regulatory arbitrage and ensure the US remains competitive in the evolving financial landscape.
As the stablecoin market continues to expand, Cascarilla is expected to emphasize the urgent need for cohesive international standards to regulate digital dollars and combat fragmentation in global financial markets.
In his prepared testimony, Cascarilla warns that the lack of standardized regulations in the US is stifling the adoption and distribution of stablecoins, particularly Paxos’ own Global Dollar (USDG), which is issued by a regulated affiliate in Singapore.
“We fear that products like Paxos’ Global Dollar (USDG) stablecoin, issued by a regulated affiliate in Singapore, will languish while departments and agencies make their determinations,” Cascarilla wrote, highlighting the bureaucratic delays that could hinder US leadership in digital financial markets.
To address this, Cascarilla is urging lawmakers to strengthen “international reciprocity language” within US regulatory frameworks. His proposal includes defined and accelerated timelines for the US Treasury Department to designate foreign jurisdictions that meet US regulatory standards for stablecoins.
His message is clear: the US must act quickly to avoid a scenario in which offshore jurisdictions with lax oversight become havens for stablecoin issuers, potentially undermining US financial stability and security.
By creating a regulatory framework that acknowledges and recognizes equivalent regulatory regimes abroad, the US can set a higher global standard rather than allowing stablecoin issuers to exploit inconsistent regulatory environments.
“Reciprocity is not about lowering standards — it’s about raising them globally,” Cascarilla said, adding, “By establishing a framework to recognize jurisdictions with comparable regulatory regimes — covering reserve requirements, AML measures, and cybersecurity protocols — the United States can prevent regulatory arbitrage, where issuers exploit lax oversight abroad.”
Cascarilla’s testimony comes at a critical time for Paxos, which has faced compliance issues in the European Union following the implementation of the Markets in Crypto-Assets (MiCA) framework in December 2024.
MiCA—designed to regulate stablecoins, crypto asset service providers (CASPs), and other digital financial products in the EU—has already led to significant regulatory fallout for Paxos’ stablecoins.
Following MiCA’s enforcement, major crypto platforms like Crypto.com and Coinbase announced the delisting of Paxos-issued stablecoins, including Pax Dollar (PAX) and Pax Gold (PAXG), from their European operations.
Industry Divide: Should Stablecoin Issuers Register in the U.S.?
While Paxos is pushing for international regulatory recognition, some industry leaders argue that stablecoin issuers should register directly in the US to avoid such compliance issues altogether.
In February 2024, Circle co-founder Jeremy Allaire argued that all dollar-based stablecoin issuers should be required to register in the US, ensuring equal competition and stronger consumer protections.
“Whether you are an offshore company or based in Hong Kong, if you want to offer your U.S. dollar stablecoin in the US, you should register in the US just like we have to go register everywhere else,” Allaire stated.
Circle’s USDC stablecoin has taken the opposite approach of Paxos, being issued and regulated directly in the US. As a result, USDC was officially approved as the first MiCA-compliant stablecoin in 2024, allowing it to continue operations in the European Union without facing the regulatory roadblocks currently challenging Paxos.
The stablecoin industry is at a critical inflection point. Regulatory clarity and international coordination will determine the US’s role in the future of digital finance—either as a leader setting the global standard or as an inconsistent regulatory environment that pushes innovation offshore.
As Congress weighs its options, the stakes couldn’t be higher. The decision on whether to adopt an internationally reciprocal stablecoin framework or require all issuers to be registered domestically will have far-reaching implications for the digital asset economy, financial stability, and global competitiveness.
