Jeremy Allaire, the CEO of Circle, has published a blog post on June 12th detailing his prepared remarks for his upcoming testimony before Congress regarding draft stablecoin regulation. Allaire believes that the stablecoin bill is a crucial piece of legislation that should be the first step in creating a regulatory framework that builds the conditions for a vibrant and safe digital assets market.
The proposed bipartisan draft discussion bill, titled “a bill to provide for the regulation of payment stablecoins, and for other purposes,” would provide access to the U.S. dollar while ensuring safety and allowing for competition. Allaire suggests that the proposed legislation would provide strong regulation but could be improved by federal enforcement of standards, easier access to Federal Reserve account services for stablecoin issuers, and requiring stablecoin intermediaries to hold stablecoins with chartered qualified custodians.
Allaire believes that the bill should contain criminal penalties, not civil, for parties that issue counterfeit stablecoins and digital dollars. He argues that the U.S. dollar is declining in dominance in global foreign reserves, while alternative digital payment technologies such as China’s digital yuan are on the rise. Therefore, Allaire asserts that the U.S. must act to keep the dollar competitive.
He added that other jurisdictions including the EU, Japan, and Hong Kong are creating laws for stablecoins issued in the U.S. He urged U.S. lawmakers to lead stablecoin regulation instead of allowing foreign countries to do so. Allaire’s company, Circle, has obtained licenses and supervision in the U.S., Europe, and Asia for its own USDC stablecoin.
Industry Members Emphasize the Importance of Stablecoin Regulation
Allaire’s upcoming testimony before Congress will be joined by other notable crypto industry members, including Emin Gün Sirer, founder and CEO of Ava Labs, and Aaron Kaplan, founder and Co-CEO of Prometheum. The industry members will discuss the importance of stablecoin regulation and the impact it could have on the digital assets market.
The need for stablecoin regulation has become increasingly apparent as the market for digital assets continues to grow. Stablecoins are a type of digital asset that are pegged to a stable asset, such as the U.S. dollar, to reduce price volatility. However, there have been concerns about the lack of regulation surrounding stablecoins and the potential risks they pose to the financial system.
The proposed stablecoin bill could be the first step in creating a regulatory framework that ensures the safety and competition of stablecoins. Allaire and other industry members are urging U.S. lawmakers to lead the way in stablecoin regulation to avoid foreign countries taking the lead. With the market for digital assets growing, it’s essential to have a regulatory framework that builds confidence in the market and protects consumers.