Circle CEO: SEC is Not Suitable Agency to Regulate Stablecoins

Circle CEO Jeremy Allaire asserts that payment stablecoins are payment systems, not securities

He believes that these digital assets have the potential to revolutionize the way we make payments, providing a secure, efficient, and cost-effective alternative to traditional payment methods.

The United States Securities and Exchange Commission (SEC) is not the appropriate agency to regulate stablecoins, according to Circle founder and CEO Jeremy Allaire.

In a recent interview with Bloomberg on February 24th, Allaire expressed his views on the SEC's recent attempts to regulate the crypto industry, including stablecoin issuer Paxos. 

Allaire believes that dollar-pegged “payment stablecoins” should be regulated by a banking regulator, rather than the SEC, as the SEC's focus on stablecoins is misguided. He believes that the SEC's efforts to regulate the crypto industry are not only unnecessary but could also stifle innovation.

The Securities and Exchange Commission (SEC) may not be the regulator for stablecoins, according to Allaire's assertion :

“However, there is a clear justification for why governments around the world, including the United States, are classifying payment stablecoins as payment systems and subjecting them to banking regulations.”

This is due to the fact that these digital assets have the potential to revolutionize the global financial system, providing a secure, efficient, and cost-effective way to transfer value across borders.

Circle confirmed last week that it had not been targeted by the Securities and Exchange Commission (SEC) following the issuance of a Wells notice to Binance USD issuer Paxos.

“There are many different types of stablecoins,” Allaire remarked, “and it's important to remember that not all of them are created equal. However, from a policy perspective, the general consensus is that this is a payment system that requires prudential regulation.”

The Circle CEO expressed his support for the recent SEC proposal on crypto custody, which would make it more difficult for exchanges to become custodians. He stated,

“We firmly believe that having qualified custodians that can provide the necessary control structures, bankruptcy protections, and other safeguards is an essential market structure that is highly advantageous.” 

These custodians are essential for ensuring the security of investments and providing peace of mind to investors. Furthermore, they help to create a more stable and reliable market, which is beneficial for all parties involved.

Circle is the issuer of the world's second-largest stablecoin, USD Coin, with a circulating supply of $42.2 billion, giving it a market share of 31%. Despite this, Tether remains the dominant stablecoin, boasting a supply of $70.6 billion and a commanding market share of 52%, as reported by CoinGecko.

A circle is bucking the general trend of crypto layoffs by expanding its headcount by up to 25%, according to the report. This is a remarkable feat, especially in the current economic climate, and speaks to the company's commitment to growth and success.

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