3 Minutes
Former World Bank chief: stablecoins are a strategic priority
David Malpass, the former president of the World Bank, told industry leaders at ACI’s Payments Unleashed Summit on Oct. 22 that stablecoins are reshaping payments and cross-border trade. He argued the United States must adopt clear, innovation-friendly crypto regulation to maintain the dollar’s role and support fintech growth. Malpass emphasized that without strong U.S. policy, Europe and China could win market share in digital payments and stablecoin services.
Why stablecoins matter globally
Stablecoins can lower transaction costs, enable near-instant settlement, and expand access to digital payments for consumers and businesses worldwide. These tokens—pegged to fiat or baskets of assets—are increasingly used for cross-border remittances, decentralized finance (DeFi) activity, and onchain commerce. When issuers follow transparent reserve practices and regulatory safeguards, stablecoins can reduce friction in international trade and help integrate underserved markets.
Regulation and trust are essential
Malpass stressed that trust in stablecoin issuers is critical. Clear rules on reserve backing, auditing, consumer protections, and anti-money-laundering compliance will determine whether stablecoins scale responsibly. Policymakers must balance innovation with safeguards so consumers and institutional partners can rely on stablecoin platforms.
Fed access to payment rails: a potential game-changer
Malpass welcomed Federal Reserve Governor Christopher Waller’s idea of limited access to Fed payment rails for regulated stablecoin firms and fintechs via so-called “skinny master accounts.” He said such access could reduce reliance on correspondent banks and accelerate U.S. leadership in digital payments by improving liquidity and settlement efficiency.
Competition from Europe and China
According to Malpass, Europe and China are accelerating their stablecoin and digital currency programs, including exploration of CBDCs and supportive regulatory frameworks. The U.S. faces a strategic decision: foster an innovation ecosystem that defends the dollar’s purchasing power, or cede ground in fast-moving global markets.
Policy implications and closing thoughts
For Malpass, the path is clear: adopt consistent crypto regulations, enable responsible access to central bank infrastructure, and promote transparent reserve standards for stablecoin issuers. His comments underscore a broader debate about monetary leadership, financial stability, and the role of digital assets in the global economy. Malpass, who became World Bank president in 2019 after a nomination from then-President Donald Trump, remains a prominent voice in international finance and U.S. policy discussions.
Source: crypto
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