Circle CEO Jeremy Allaire argues that stablecoins should be regulated by banking authorities rather than the United States Securities and Exchange Commission (SEC). In a recent interview with Bloomberg, Allaire expressed his concerns regarding the SEC’s actions to regulate the crypto industry and Paxos, a stablecoin issuer. Allaire stated that payment stablecoins, such as dollar-pegged stablecoins, should fall under the jurisdiction of banking regulators.
Stablecoins: A Payment System
Allaire clarified that payment stablecoins are a payment system and fall under the regulatory control of banking regulators. He further explained that this view is shared by governments worldwide, including the United States. The CEO emphasized that not all stablecoins are created equal, but from a policy perspective, they are part of the payment system and should be under the purview of prudential regulators.
Read More: Nigeria to Establish a Regulatory Framework for Stablecoins and Initial Coin Offerings (ICOs)
Circle’s Views on SEC Proposal
Allaire expressed his support for the recent SEC proposal on crypto custody that would make it more challenging for exchanges to act as custodians. He believes that having qualified custodians who can provide appropriate control structures, bankruptcy protections, and other safeguards is essential in the market structure.
Circle is the issuer of the world’s second-largest stablecoin, USD Coin (USDC), with a circulating supply of $42.2 billion and a market share of 31%. Tether is the leading stablecoin, with a supply of $70.6 billion and a market share of 52%, according to CoinGecko. Allaire’s comments come after the SEC issued a Wells notice to Paxos, indicating that the stablecoin issuer could face enforcement action.
Allaire supported SEC Commissioner Hester Peirce’s recent statement that the agency should refer to Congress due to the lack of legislation concerning crypto regulations and enforcement. Some believe that the SEC has taken matters into its own hands, resulting in concerns over its actions.
In contrast to the recent crypto layoffs, Circle is expanding its workforce by up to 25%. The company is bucking the trend and continuing to grow amid regulatory scrutiny and a challenging business environment.
