Circle chairman Jeremy Allaire has responded to recent enforcement actions by the US Securities and Exchange Commission (SEX) and other agencies in the crypto industry. In the interview with BloombergCircle’s boss shares his views on recent SEC moves on BUSD stablecoin publisher Paxos.
Circle, a Boston-based company, is the second largest issuer of the stablecoin, USD Coin (USDC), with over $42 billion in circulation. In the interview, the chief executive, Jeremy, suggested that the USD-pegged stablecoin should be under the bank regulator.
SEC Has No Business With Crypto Stablecoins
During an interview, Circle executive director Jeremy Allaire stated that the US SEC has no business with payment stablecoins. According to him, stablecoin is a payment system and should be under the regulatory jurisdiction of the banking regulator and not the SEC.
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
Executives appear to be unhappy with recent SEC moves regarding stablecoins. That being said, some national governments, including the US, have reason to deal with stablecoins as a payment system that is the responsibility of banking regulators.
Although the Circle chief shared this view, the company confirmed that it was not on the SEC’s radar. However, given a new deny notice to Paxos and other active regulatory activities, the move in the Circle by the SEC can.
Although the CEO is against the SEC’s move on stablecoins, he favors the regulator in one respect. Jeremy applauded the new SEC proposal regarding crypto holdings to streamline exchanges that want to be custodians.
In these words, it is important to have a qualified custodian who can provide an appropriate market control structure and bankruptcy protection. Therefore, crypto exchanges should not wake up and become custodians without meeting the requirements.
SEC Accused of Pushing Enforcement by Coercion
Also, earlier on February 23, Allaire agreed with SEC Commissioner Hester Peirce saying the watchdog should refer to Congress on legislation for crypto regulation and enforcement.
At tweet, Peirce commented on people’s reaction to the SEC and its move on stablecoins. According to the commissioner, Congress is actively considering the issue of the crypto regulatory framework and legislation, so the SEC must provide an answer. He also said the SEC and other regulators could hold a public roundtable to discuss the matter. Pierce ended the note by saying there are better ways to make rules than enforcement actions.
Allaire’s view is in line with many others who have reacted to the SEC’s recent action on the crypto industry. Due to the lack of legislation for crypto regulation, many believe that the SEC should consult with Congress before taking on the issue of cryptocurrency enforcement.
In response to ongoing lawsuits between the SEC and former Coinbase employees, the Digital Chamber of Commerce blamed the watchdog. Agency charged The SEC uses a backdoor approach to label crypto asset securities without legislation from Congress.
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