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Circle CEO Jeremy Allaire told Bloomberg: February 23rd The US Securities and Exchange Commission should not be entrusted with regulating stablecoins.
Allaire said in an interview with the publication:
I dont believe the SEC is a stablecoin regulator. There is a reason [governments are] Specifically, payment stablecoins are payment systems and activities of banking regulators.
He added that there are many variations of stablecoins and that not all are created equal. However, he argued that most regulators view stablecoins as payment systems.
Allaire also said he supports another SEC rule that could impose stricter rules on custody of cryptocurrencies. In line with support expressed by other companies last week, Circle’s CEO said today that the rules for qualified custodians provide “appropriate” controls and bankruptcy protection. he said:
“We have seen many lessons [when] Random Exchange has your assets.There’s a reason you have such [custodial] rule. “
Allaire’s statement comes on the heels of the high-profile SEC action against stablecoins. On February 13th, Paxos announced that it will stop issuing Binance USD (BUSD) at the request of New York regulators. The SEC then sent Wells’ notice to her Paxos separately. Rumors quickly surfaced that Circle received a similar notice which Circle steadfastly denied.
The SEC also took action against the TerraUSD stablecoin and related assets on February 16th. TerraUSD’s value is algorithmically determined by crypto assets and lost most of its value in May 2022. In contrast, Binance USD and Circle’s own USD Coin (USDC), backed by traditional assets, maintain a $1.00 price peg.
SEC Chairman Gary Gensler has repeatedly suggested that stablecoins may fall under the jurisdiction of regulators. Last September, he suggested that stablecoins are similar to certain securities. He also compared stablecoins to poker chips in the second half of 2021.
Circle’s USDC stablecoin currently has a market cap of $42 billion. With a market capitalization of $70 billion, it is the second largest stablecoin after Tether’s USDT.
