Jeremy Allaire, the co-founder and CEO of Circle, called for all issuers of US dollar-based stablecoins to be registered within the US.
Allaire’s remarks highlight the increasing regulatory scrutiny around stablecoins. These financial instruments play a critical role in digital asset markets, bridging between crypto and traditional finance (TradFi).
Stablecoins Take Center Stage in Crypto Regulation
Allaire’s statement came amid the Circle Stablecoin Day frenzy in New York City (NYC). According to the Circle executive, it featured business and product leaders from different financial institutions.
“It’s Circle Stablecoin Day in NYC,” Allaire highlighted on X in a Tuesday post.
Based in New York, Circle is the issuer of USD Coin (USDC), the second-largest stablecoin after Tether’s USDT. According to Allaire, mandatory registration would enhance consumer protection and foster financial integrity.
“This is about consumer protection and financial integrity. Whether you are an offshore company or based in Hong Kong, if you want to offer your US dollar stablecoin in the US, you should need to register in the US just like we have to go register everywhere else,” the Business Times reported, citing Allaire.
The conversation around stablecoin regulation has intensified, particularly with legislative efforts gaining traction. Senator Bill Hagerty recently introduced a bill to establish a regulatory framework for stablecoins. This was expected to be among the first crypto-related policies considered under the Trump administration.
“It should not be a free pass, right? Where you can just ignore the US law and go do whatever the hell you want wherever and sell into the United States,” Allaire emphasized.
Tether recently moved its headquarters to El Salvador and has long been a dominant force in the stablecoin market. However, its lack of transparency and regulatory oversight has drawn criticism.
Tether CEO Paolo Ardoino addressed speculation that some major crypto firms are attempting to influence US stablecoin regulations.
“While our competitors’ business model should be to build a better product and an even bigger distribution network, their real intent is ‘Kill Tether,’” Ardoino said.
Tether’s reserves are partially managed by Cantor Fitzgerald, whose former CEO, Howard Lutnick, was recently confirmed as the US Secretary of Commerce. This connection has fueled speculation about how regulatory decisions may influence the stablecoin market.
Government Leaders Push for Stablecoin Regulation
Regulatory momentum for stablecoins is building across multiple US agencies. The Federal Reserve has weighed in on the potential impact of stablecoins on the global financial system. According to Federal Reserve Governor Christopher Waller, stablecoins could extend the US dollar’s global dominance by making it more accessible in digital markets.
Fed Chair Jerome Powell has also advocated for stablecoin regulation, stressing the need for a clear and structured oversight framework. Meanwhile, Democrat Representative Maxine Waters proposed bipartisan legislation to regulate stablecoins, demonstrating that the issue has bipartisan support.
In addition, the Commodity Futures Trading Commission (CFTC) is set to discuss a pilot program for stablecoin regulation. This could provide further clarity on how these digital assets will be governed.
One of the most significant potential impacts of US stablecoin regulations is on Tether’s business model. With a substantial portion of its reserves held in Bitcoin, new rules could force Tether to liquidate some of its holdings to comply with US regulations.
The debate over regulatory oversight will continue as US policymakers move toward establishing a stablecoin framework. Circle’s push for mandatory registration reflects the growing playing field for digital assets. Regulatory compliance may soon become necessary rather than an option.
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