Paxos CEO calls for stablecoin regulation to curb global risks

Charles Cascarilla, CEO of Paxos, has urged U.S. lawmakers to establish cross-border stablecoin regulations to address adoption challenges and prevent regulatory arbitrage.

Speaking before the House Financial Services Committee, Cascarilla emphasised the need for "cross-jurisdictional reciprocity" to ensure stablecoin issuers meet consistent global standards.

He raised concerns about Paxos’ Global Dollar (CRYPTO:USDG), issued through its Singapore affiliate and regulated by the Monetary Authority of Singapore (MAS).

Cascarilla warned that bureaucratic delays in recognising foreign regulatory regimes could hinder USDG’s adoption.

"We fear that products like Paxos’ Global Dollar (USDG) stablecoin will languish while departments and agencies make their determinations," he stated.

To address this, he proposed setting clear timelines for the U.S. Treasury Department to evaluate foreign jurisdictions.

"This timeframe would force swift action and prevent bureaucratic delays while guaranteeing thorough scrutiny of foreign regulatory regimes," he explained.

Cascarilla argued that reciprocity should raise global standards, covering reserve requirements, anti-money laundering measures, and cybersecurity protocols.

His remarks come as Paxos faces compliance issues under the European Union’s Markets in Crypto-Assets (MiCA) framework.

Since MiCA took effect in December 2024, several platforms, including Coinbase and Crypto.com, have delisted Paxos-issued stablecoins like Pax Dollar (CRYPTO:USDP) and Pax Gold (CRYPTO:PAXG).

These challenges highlight the need for cohesive global regulations to prevent issuers from exploiting lax oversight abroad.

Other industry leaders have also weighed in on stablecoin regulation.

Jeremy Allaire, co-founder of Circle, has argued that all dollar-based stablecoin issuers should register domestically in the U.S.

Circle’s USDC stablecoin was officially approved as MiCA-compliant in 2024, setting a precedent for regulated offerings.

Cascarilla’s call for action reflects growing urgency among stablecoin issuers to navigate complex regulatory landscapes while promoting innovation and adoption.

By fostering international cooperation and accelerating regulatory frameworks, lawmakers could create a more secure and equitable environment for digital assets globally.