Jeremy Allaire, founder and CEO of Circle, claimed recently that the U.S. SEC is not the appropriate regulator for stablecoins.
Recently, Jeremy Allaire, founder and chief executive officer of Circle Internet Finance, provided some insightful commentary about the Securities and Exchange Commission (SEC) and its relationship with stablecoins in the United States. Circle is the issuer of the second-largest stablecoin in circulation, USD Coin (USDC), with a supply of approximately $42 billion.
Allaire indicated in a recent interview with Bloomberg that the SEC is not the appropriate institution to regulate stablecoins in the United States. The CEO argued that payment stablecoins are a payment system and banking regulator activity by citing the position of governments across the globe, including the United States. He claimed that financial authorities such as the U.S. Federal Reserve Board or the Office of the Comptroller of the Currency (OCC) could be better suitable for stablecoins.
As we like to say, “stablecoins come in a variety of flavors; not all stablecoins are made equal. From a policy standpoint the global consensus is that this is a payment system and prudential regulator domain.”
Several in the sector have accused the SEC of exceeding its authority and regulating by enforcement in an effort to expand its regulation of the cryptocurrency market. The securities authority issued a Similar warning to Circle’s stablecoin competitor Paxos, which until a few days ago created the world’s third-largest stablecoin Binance USD (BUSD). The notification warned the company that the SEC intended to commence enforcement measures.
The CEO of Circle explained that although he disagreed with the SEC’s regulation of stablecoins, he supported the regulator’s plan to include virtual currencies among the assets subject to qualified custodian standards. Allaire thinks that this will provide the necessary control frameworks and bankruptcy protection.
Also Read: The Second Largest Bank In Germany Will Provide Crypto Custody Services To Institutions
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