Circle CEO Criticizes SEC Stablecoin regulations

Zach Anderson  Feb 27, 2023 15:56  UTC 07:56

2 Min Read

According to Jeremy Allaire, founder and CEO of Circle, the United States Securities and Exchange Commission is not the suitable institution to oversee stablecoins.

The chief executive officer of Circle provided his opinions on the SEC and its recent actions to crack down on the cryptocurrency sector, including the stablecoin issuer Paxos, in an interview that took place on February 24 with Bloomberg.

Allaire seems to have taken issue with the SEC's emphasis on stablecoins, stating that dollar-pegged "payment stablecoins" should be subject to the supervision of a banking authority rather than the SEC. This seems to be the case.

"I don't think the SEC is the regulator for stablecoins," said Allaire, adding, "There is a reason why everywhere in the world, including the U.S., the government is specifically saying payment stablecoins are a payment system and banking regulator activity." "I don't think the SEC is the regulator for stablecoins."

Following the delivery of a Wells notice to Paxos, which is the issuer of Binance USD (BUSD), Circle affirmed the previous week that it had not been the subject of an investigation by the SEC.

"There are plenty of varieties, as we like to say, not all stablecoins are made equal," Allaire stated. He continued by saying, "But, obviously, from a policy standpoint, the consistent position throughout the globe is that this is a payment system, prudential regulator area."

However, the CEO of Circle said that he generally supported a recent proposal made by the SEC regarding cryptocurrency custody. This plan would make it far more difficult for exchanges to become custodians.

We believe that having competent custodians who are able to offer the right control structures as well as bankruptcy protections and other things is a very crucial and highly useful component of the market system.

USD Coin, which is issued by Circle, is the second-largest stablecoin in circulation worldwide (USDC). Its market share is 31% thanks to its circulating supply of $42.2 billion, which provides it that percentage. According to CoinGecko's data, Tether continues to be the most popular stable cryptocurrency, with a supply of $70.6 billion and a market share of 52%.

On February 23, Allaire expressed his agreement with SEC Commissioner Hester Peirce's statement that the agency need to consult with Congress. Some people argue that the Securities and Exchange Commission has been taking matters of crypto rules and enforcement into its own hands due to the absence of law in this area.

According to the article, Circle is planning to increase its staff by as much as 25 percent, breaking the typical trend of layoffs in the cryptocurrency industry.

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