The US Securities and Exchange Commission is not the right agency to regulate stablecoins, according to Circle founder and CEO Jeremy Allaire.
In an Conversation with Bloomberg on February 24, Circle’s CEO aired his views on the SEC and its recent moves to crack down on the crypto industry, including stablecoin issuer Paxos.
Allaire appeared to take issue with the SEC’s focus on stablecoins, arguing that dollar-pegged “payment stablecoins” should be overseen by a banking regulator, rather than the SEC.
“I don’t think the SEC is a regulator for stablecoins,” Allaire said, adding:
“There is a reason why everywhere in the world, including the US, the government specifically says that stablecoin payments are a payment system and an activity of a banking regulator.”
Circle confirmed last week that it did was not targeted by the SEC in response to issue of the Wells Notice on Binance USD (BUSD)-issuer of Paxos.
“There are a lot of flavors, as we like to say, not all stablecoins are created equal,” Allaire said, adding, “But it’s clear that from a political point of view, the unified view around the world is that it’s a payment system, a prudential space for the regulator.”
Circle’s Jeremy Allaire says banking regulators would be better than the SEC to oversee stablecoins https://t.co/8nibUU4taW
— Bloomberg Crypto (@crypto) February 23, 2023
However, Circle’s CEO said he is generally in favor of a the SEC’s recent cryptocurrency custody proposal this would make it much more difficult for exchanges to become custodians.
“We think having qualified trustees who can provide appropriate control structures and bankruptcy protection and other things is a very important market structure and very valuable.”
Circle is the issuer of the second largest stablecoin in the world, USD Coin (USDC). It has a circulating supply of $42.2 billion, giving it a market share of 31%. Tether remains the dominant stablecoin with a supply of $70.6 billion and a market share of 52%, according to CoinGecko.
Related: Why SEC wants to ban crypto bets and stablecoins under scrutiny
On February 23, Allaire agreed with SEC Commissioner Hester Peirce, who said the agency should approach Congress. Due to the lack of legislation, some believe that the SEC is taking matters into its own hands regarding cryptocurrency regulation and enforcement.
The time has come for Congress to get to work on legislation. That’s what you do when things are new, complex, and have a broad impact on society. thanks @HesterPeirce https://t.co/4EaX4RqcE9
— Jeremy Allaire (@jerallaire) February 23, 2023
Circle expands its workforce by up to 25%, defying the general cryptocurrency release trendthe report states.
