Circle CEO Jeremy Allaire said he doesn't believe that "SEC is the regulator for stablecoins."
Jeremy Allaire, the founder and chief executive officer (CEO) of stablecoin issuer Circle, has commented on recent regulatory actions of the United States Securities and Exchange Commission (SEC).
In an interview with Bloomberg, Circle CEO highlighted that SEC is not the right institution to regulate stablecoins, such as Circle native, USD Coin (USDC). On top of that, Allaire noted that “payment stablecoins” should be supervised and controlled by banking regulators.
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Regarding the matter, Circle’s CEO Jeremy Allaire noted:
I don’t think the SEC is the regulator for stablecoins. There is a reason why everywhere in the world, including the US, the government is specifically saying payment stablecoins are a payment system and banking regulator activity.
The comments from Jeremy Allaire come after the US SEC issued a Wells Notice to another stablecoin issuer, Paxos, over its Binance USD (BUSD). Wells Notice is an official document, which informs companies about the regulator's plans to enforce certain actions.
It is believed that in the Wells Notice, SEC claimed that Paxos violated investor protection laws with Binance USD (BUSD) token as it allegedly is an unregistered security. On top of that, during the same week, the New York financial regulator ordered Paxos to cease the issuance of BUSD.
The news shook the crypto community with many CEOs and founders of crypto-related firms commenting and criticizing the Wells Notice. Circle was also a target of various rumors that it also received a Wells Notice. However, on February 14th, Circle’s CSO denied the rumor on Twitter.
Circle Jeremy Allaire highlighted that "not all stablecoins are created equal."
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.
However, Jeremy Allaire did not criticize all SEC proposals or decisions. The man claimed that he generally agrees with the SEC's offer to change rules for crypto firms operating as “qualified custodians.”
If the new rules are imposed, crypto-related firms will have to deal with annual evaluations, provide its data and account statements upon the SEC’s request. Regarding the matter, Jeremy Allaire stated:
We think having qualified custodians that can provide the appropriate control structures and bankruptcy protections and the other things is a very important market structure and very valuable. We have seen a lot of lessons learned that random exchanges have your assets. There is a reason why you have that kind of rule.
Circle’s stablecoin USDC has a market cap of almost $42.5 billion and is the fifth-largest cryptocurrency in terms of market capitalization.
