Paxos CEO urges Harris and Trump to create pro-crypto regulations ahead of US election

A week before the election, Paxos CEO Charles Cascarilla pressed U.S. presidential candidates Kamala Harris and Donald Trump to establish a friendlier regulatory atmosphere for digital assets and a regulatory framework for stablecoins. 

"As CEO and Co-Founder of Paxos, one of the leading firms in tokenization and blockchain infrastructure, I urge you to implement a more welcoming and clearly defined regulatory environment for digital assets," Cascarilla said in a letter sent to both candidates on Tuesday.

The blockchain and tokenization infrastructure platform's lead also warned that if the next administration fails to follow through, it could put the financial industry's regulatory future at risk. 

"Unless Washington changes course, digital dollars will continue to move offshore, outside the purview of U.S. regulators and our banking system. This is a threat to our economic competitiveness and national security," Cascarilla said in the letter.

Lawmakers in Washington have been working on stablecoin legislation for years. A bill advanced out of the Republican-led House Financial Services Committee last year, but has been met with challenges, including disagreement on allowing state regulatory to approve stablecoin issuances without Federal Reserve input. 

On the Senate side, Sen. Bill Hagerty, R-Tenn., has draft stablecoin legislation floating around the Hill that could serve as an outline for future bills in 2025, experts say. 

'Inhospitable' environment

Cascarilla also criticized the current regulatory environment for crypto, calling it an "inhospitable place for financial innovation." 

"In the last four years, Paxos and its U.S.-based peers have faced countless examples of regulatory overreach, questionable banking policies and onerous and needless legal actions, resulting in enormous costs in wasted time and money," Cascarilla wrote. "This hostility has stifled the industry’s growth and forced Paxos and its peers to seek regulatory clarity outside the U.S."

The U.S. Securities and Exchange Commission issued a notice to Paxos over its involvement in the Binance USD stablecoin last year, alleging that the stablecoin is an unregistered security. However, in July, Paxos said the SEC dropped its investigation into BUSD and said it would not recommend enforcement action against the firm. 

Both Harris and Trump have made comments over the past few months about the crypto industry, but have taken on vastly different approaches. Last month, Harris said her administration would encourage innovative technologies like AI and digital assets while protecting consumers and investors, according to her 80-page economic plan. Meanwhile, Trump has made his own pledge to end an "unlawful and un-American crackdown" on the U.S. crypto industry and has backed a crypto project called World Liberty Financial.