The United States Securities and Exchange Commission is not the right agency to regulate stablecoins, according to Circle founder and CEO Jeremy Allaire.
In an interview with Bloomberg on February 24, Circle’s chief executive revealed his views on the SEC and its new measures to lock down the crypto industry, including stablecoin issuer Paxos.
Allaire appears to have taken issue with the SEC’s focus on stablecoins, arguing that dollar-pegged “payment stablecoins” should be under the supervision of banking regulators, rather than the SEC.
“I don’t think the SEC is a regulator for stablecoins,” Allaire said, adding:
“There is a reason why everywhere in the world, including the US, governments specifically say that payment stablecoins are payment systems and banking regulator activities.”
Circle confirmed last week that it had not been targeted by the SEC after Wells issued a notice to Binance USD (BUSD)-issuer Paxos.
“There is a lot of sense, as I said, not all stablecoins are created equal,” said Allaire, adding, “But, clearly, from a policy point of view, a uniform view around the world is a payment system, prudential. regulatory space.”
Circle’s Jeremy Allaire says banking regulators would be better at overseeing stablecoins than the SEC https://t.co/8nibUU4taW
— Bloomberg Crypto (@crypto) February 23, 2023
However, Circle’s CEO said he generally supports the new SEC proposal on crypto custody that would make it more difficult for exchanges to become custodians.
“We think having a qualified custodian who can provide the appropriate control structure and bankruptcy protection and so on is an important and very valuable market structure.”
Circle is the world’s second largest issuer of the stablecoin, USD Coin (USDC). It has a circulating supply of $42.2 billion which gives it a market share of 31%. Tether remains the dominant stablecoin with a supply of $70.6 billion and a market share of 52%, according to CoinGecko.
related: Why the SEC wants to ban crypto staking and stablecoins is under investigation
On February 23, Allaire agreed with SEC Commissioner Hester Peirce, who said the agency should refer it to Congress. Due to the lack of legislation, some believe that the SEC has taken matters into its own hands when it comes to crypto regulation and enforcement.
It’s time for Congress to get busy making laws. This is what you do when something new, complex and has a huge impact on society. Thanks @HesterPeirce https://t.co/4EaX4RqcE9
— Jeremy Allaire (@jerallaire) February 23, 2023
Circle expanded its headcount by 25%, against the general trend of crypto layoffs, the report notes.