- Circle CEO Jeremy Allaire recently said that the SEC shouldn’t regulate stablecoins.
- Allaire believes that stablecoins should fall under the purview of banking regulators.
- Stablecoin issuers have become the subject of increasing scrutiny by regulators including the SEC.
Jeremy Allaire, the founder and CEO of Circle Internet Financial, believes that the United States Securities and Exchange Commission (SEC) should not have regulatory oversight of stablecoins. The chief of the USD Coin (USDC) issuer shared his thoughts on the regulation of digital transactions and the broader crypto industry during a recent interview with Bloomberg.
Allaire believes stablecoins, including the $43 billion market cap USDC that his company issues, should not be regulated by the US SEC. According to the Circle CEO, governments around the world are of the opinion that stablecoins are a payment activity and banking regulator and to that end, fall under the jurisdiction of banking regulators.
There are lots of flavors, as we like to say, not all stablecoins are created equal. But, clearly, from a policy perspective, the uniform view around the world is this is a payment system, prudential regulator space,” Allaire added while making his case for stablecoin regulation in the U.S.
While the Circle executive didn’t name any specific banking regulator that he feels should oversee the regulation of stablecoins, his opinions indicate that the U.S Federal Reserve Board or the Office of Comptroller of the Currency (OCC) may be a more appropriate regulator for stablecoins.
Interestingly, Allaire is on board with the SEC’s recent proposal to classify virtual currencies as assets that are subject to requirements similar to those faced by qualified custodians in the U.S. The proposal would also include requirements for crypto firms to face annual evaluations.
Stablecoin issuers like Tether and Paxos have been targeted by multiple federal agencies including the SEC, over the past few weeks. BUSD issuer Paxos was ordered to stop minting the stablecoin by the New York Department of Financial Services (NYDFS) last month, days after the stablecoin firm received a Wells notice from the SEC.