ABA Statement for the Record Before the Subcommittee on Digital Assets, Financial Technology and Inclusion On Stablecoin Framework

The digital asset marketplace, comprising cryptocurrency and stablecoins and the firms that support the digital asset transactions, is changing rapidly. In November 2021, the total market capitalization of all cryptocurrencies (including stablecoins) peaked at around US$3 trillion.1 Since then, in the face of several high-profile events, the digital asset market has fluctuated wildly in value (total market cap is ~US$1.23 trillion as of April 11, 2023),2 and many consumers and investors have been adversely impacted. A subset of digital assets known as stablecoins endeavor to avoid these swings in price by pegging their value to some external reference point, such as the U.S. dollar or gold.3 This stability is pursued through the use of collateral reserves or algorithmic formulae to control supply.4 Popular use cases are payments (including cross-border transfers), access to digital assets, and storage of value.

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