The United States Securities and Exchange Commission is not the appropriate agency to regulate stablecoins, according to Circle founder and CEO Jeremy Allaire.
in a interview Speaking with Bloomberg on Feb. 24, the CEO of Circle expressed his views on the SEC and its recent moves to clamp down on the cryptocurrency industry, including the issuer of the Paxos stablecoin.
Allaire appears to have taken issue with the SEC’s approach to stablecoins, arguing that dollar-pegged “payment stablecoins” should be under the supervision of a banking regulator, rather than the SEC.
“I don’t think the SEC is the regulator of stablecoins,” Allaire said, adding:
“There is a reason that around the world, including the US, the government specifically says that payment stablecoins are a payment system and banking regulatory activity.”
Circle confirmed last week that it had not been targeted by the SEC following Wells’ issuance of a notice to Binance USD (BUSD) issuer Paxos.
“There are many flavors, as we like to say, not all stablecoins are created equal,” Allaire said, adding: “But clearly, from a political perspective, the uniform view around the world is that this is a prudential payment system. regulatory space.”
Circle’s Jeremy Allaire says bank regulators would be better at overseeing stablecoins than the SEC https://t.co/8nibUU4taW
—Bloomberg Crypto (@crypto) February 23, 2023
However, the CEO of Circle said that he was generally in favor of a recent SEC proposal on cryptocurrency custody that would make it much more difficult for exchanges to become custodians.
“We believe that having qualified custodians that can provide the appropriate control structures and protection against bankruptcy and other things is a very important and very valuable market structure.”
Circle is the issuer of the world’s second largest stablecoin, USD Coin (USDC). It has a circulating supply of $42.2 billion, giving it a 31% market share. Tether remains the dominant stablecoin with a supply of $70.6 billion and a 52% market share, according to CoinGecko.
Related: Why the SEC Wants to Ban Crypto Betting and Stablecoins Under Scrutiny
On February 23, Allaire agreed with SEC Commissioner Hester Peirce, who said the agency should refer to Congress. Due to the lack of legislation, some believe that the SEC has been taking matters into its own hands with regards to cryptocurrency regulations and enforcement.
It’s time for Congress to get busy legislating. That’s what you do when things are new, complex, and have a broad impact on society. Thank you @HesterPeirce https://t.co/4EaX4RqcE9
— Jeremy Allaire (@jerallaire) February 23, 2023
Circle is expanding its workforce by up to 25%, bucking the general trend of crypto layoffs, the report noted.
