- Circle founder and CEO Jeremy Allaire recently stated that the U.S. SEC is not the right regulator for stablecoins.
- Allaire believes that the activities of a payment stablecoin like USDC fall under the purview of a banking regulator.
- The CEO clarified that he’s on board with the SEC’s proposal to subject virtual currencies to qualified custodian requirements.
- Rival stablecoin issuer Paxos recently became the subject of regulatory scrutiny from the SEC.
Jeremy Allaire, the founder, and CEO of Circle Internet Financial, recently shared some interesting thoughts on the Securities and Exchange Commission (SEC) and its relationship with stablecoins in the United States. Circle is the issuer of the world’s second-largest stablecoin USD Coin (USDC), which has a circulating supply of over $42 billion.
Circle CEO: I don’t think the SEC is the regulator for stablecoins
In a recent interview with Bloomberg, Allaire stated that according to him, the SEC is not the right agency to regulate stablecoins in the U.S. To make his case, the CEO cited the stance of governments around the world, including the U.S., which is that payment stablecoins are a payment system and banking regulator activity. He essentially indicated that banking regulators such as the U.S Federal Reserve Board or the Office of Comptroller of the Currency (OCC) may be more appropriate for stablecoins.
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.”Jeremy Allaire, founder and CEO of Circle Internet Financial
The SEC has been accused by many in the industry of overreaching its jurisdiction and regulating by enforcement in a bid to extend its oversight of the crypto industry. The securities regulator recently issued a Wells notice to Circle’s rival stablecoin firm Paxos, which primarily issued the world’s third largest stablecoin Binance USD (BUSD) until a few days ago. The notice informed the firm about the SEC’s intention to initiate enforcement actions.
The Circle CEO clarified that while he felt differently about stablecoin regulation by the SEC, he was on board with the regulator’s proposal to include virtual currencies in the assets that are subject to qualified custodian requirements. Allaire believes that this can provide the appropriate control structures and bankruptcy protection.