• Circle Internet Financial CEO Jeremy Allaire recently argued that stablecoins should not be regulated by the SEC, but rather by banking regulators.
• Allaire believes that governments around the world view payment stablecoins as a payment system, so banking regulations are more suited for them.
• The SEC has proposed to include virtual currencies in the assets subject to qualified custodian requirements for better control and bankruptcy protection.
Circle CEO’s Opinion on Regulatory Status of Stablecoins
Jeremy Allaire, founder and CEO of Circle Internet Financial, recently shared his opinion on the Securities and Exchange Commission (SEC) and its role in regulating stablecoins in the United States.
Circle’s USD Coin
Circle is the issuer of USD Coin [USDC], which has a circulating supply of over $42 billion.
SEC Overreaching its Jurisdiction?
The securities regulator recently issued a Wells notice to Paxos, Circle’s rival firm, informing the company of its intention to initiate enforcement actions. This has caused many in the industry to accuse the SEC of overreaching its jurisdiction and regulating by enforcement to extend its oversight of the crypto industry.
Allaire’s Argument Against SEC Regulation
Jeremy Allaire disagreed with the SEC’s role in regulating stablecoins, instead suggesting that banking regulators, such as US Federal Reserve Board or Office of Comptroller of Currency (OCC), would be more appropriate due to governments around the world viewing payment stablecoins as a payment system.
SEC Proposal for Virtual Currencies
However, he supported the regulator’s proposal to include virtual currencies in assets subject to qualified custodian requirements providing control & bankruptcy protection.