Circle CEO Calls for Clear US Laws on Stablecoins to 'Unleash' Their Potential

In a letter to lawmakers, Jeremy Allaire said inaction will "stunt America's voice."

AccessTimeIconNov 16, 2022 at 10:00 a.m. UTC

Circle CEO and founder Jeremy Allaire wrote to Congressional leaders for financial services, calling for clear, workable U.S. legislation on stablecoins and warning of the risks to the country of not doing so.

Allaire addressed the letter to Rep. Maxine Waters (D-Cali) and Sen. Sherrod Brown (D-Ohio), who chair the House Committee for Financial Services and the Senate Committee on Banking, Housing, and Urban Affairs respectively, as well as ranking members Rep. Patrick McHenry (R-N.C.) and Sen. Pat Toomey (R-Penn).

Inaction in this area will "stunt America's voice" as other jurisdictions make progress with establishing comprehensive regulatory regimes for digital assets, according to Allaire.

"The United States is at risk of missing an opportunity to set the rules that will govern the future of payments, money, and other sectors of the global economy," Allaire said in the letter. He cited China's development of the digital yuan "with the goal of outpacing the United States and replacing the dollar as the world's reserve currency."

Allaire also referred to the risk to consumers in the absence of a clear way of identifying which stablecoins adhere to a bona fide regulatory regime.

"Not all stablecoins are created equal," he wrote, possibly referring to terraUSD (UST), which plummeted in value in June causing billions of dollars in losses to users worldwide.

Allaire said "reasonable, workable, and clear legislation can unleash new economic activity" through the reassurance it would offer to businesses and consumers that the value embedded in stablecoins is protected by the law. Users would be "shielded from deleterious and irresponsible financial alchemy."

A stablecoin bill had been expected by many to make its way through Congress sometime this year, however negotiations became bogged down owing to disagreements over topics such as the role of state regulators, the possibility of a future digital dollar in the U.S. and the treatment of customer money held by crypto platforms.


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Jamie Crawley

Jamie Crawley is a CoinDesk news reporter based in London.

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