Circle CEO Says SEC Shouldn’t Regulate Stablecoins

• Circle founder and CEO Jeremy Allaire recently stated that the SEC is not the right regulator for stablecoins.
• According to Allaire, the activity of paying for stablecoins like USDC falls within the purview of banking regulators.
• The CEO clarified that he supports the SEC’s proposal to make virtual currencies eligible custodians.
• Rival stablecoin issuer Paxos has recently been the subject of regulatory scrutiny by the SEC.

Jeremy Allaire, founder and CEO of Circle Internet Financial, recently shared some interesting thoughts about the U.S. Securities and Exchange Commission (SEC) and its relationship with stablecoins. Circle is the issuer of the world’s second largest stablecoin, USD Coin (USDC), with a circulating supply of over $42 billion.

Circle CEO: I don’t think the SEC is the regulator for stablecoins

in a recent interview BloombergAccording to Allaire, the SEC is not the right agency to regulate stablecoins in the U.S. To prove his point, the CEO cited the position of governments around the world, including the U.S., that payment stablecoins are a payment system and banking supervision activities. He basically said that banking regulators such as the U.S. Federal Reserve or the Office of the Comptroller of the Currency (OCC) might be better suited for stablecoins.

As we like to say, there are many flavors and not all stablecoins are created equal. But, clearly, from a policy standpoint, the unified view around the world is that this is a payment system, prudentially regulated space. ”

Jeremy Allaire, Founder and CEO, Circle Internet Financial

Many in the industry have accused the SEC of expanding its oversight of the cryptocurrency industry by overreaching its jurisdiction and regulating through enforcement.Securities regulator recently issued Wells notice to Circle rival stablecoin firm Paxos, until a few days ago, it mainly issued Binance Dollar (BUSD), the third largest stablecoin in the world. The notice informed the company that the SEC intends to take enforcement action.

The Circle CEO clarified that while he disagrees with the SEC’s regulation of stablecoins, he agrees with the regulator’s proposal to include virtual currencies in assets that meet qualified custodian requirements. According to Allaire, this could provide an appropriate control structure and bankruptcy protection.