The United States Securities and Exchange Commission is not the appropriate agency to regulate stablecoins, according to Circle founder and CEO Jeremy Allaire.
In a interview with Bloomberg on February 24, the CEO of Circle shared his views on the SEC and its recent moves to crack down on the crypto industry, including stablecoin issuer Paxos.
Allaire appears to have taken issue with the SEC’s emphasis on stablecoins, arguing that dollar-pegged “payment stablecoins” should be under the oversight of a banking regulator, rather than the SEC.
“I don’t think the SEC is the regulator of stablecoins,” Allaire said, adding:
“There’s a reason the government all over the world, including the United States, is specifically saying that payment stablecoins are a payment system and banking regulatory activity.”
Circle confirmed last week that it had not been targeted by the SEC following the issuance of a Wells notice to Binance USD (BUSD) issuer Paxos.
“There are a lot of flavors, as we like to say, not all stablecoins are created equal,” Allaire said, adding, “But, clearly, from a political standpoint, the uniform view in the world is that it is a payment system, prudential regulator space.
Circle’s Jeremy Allaire says banking regulators would be in a better position to oversee stablecoins than the SEC https://t.co/8nibUU4taW
—Bloomberg Crypto (@crypto) February 23, 2023
Circle’s CEO, however, said he was generally supportive of a recent SEC proposal on crypto custody that would make it much harder for exchanges to become custodians.
“We think having qualified custodians who can provide the proper control structures and protections against bankruptcy and the like is a very important and very valuable market structure.”
Circle is the issuer of the world’s second largest stablecoin, USD Coin (USDC). It has an outstanding supply of $42.2 billion, giving it a 31% market share. Tether remains the dominant stablecoin with a supply of $70.6 billion and a market share of 52%, according to CoinGecko.
Related: Why the SEC Wants to Ban Crypto Staking and Supervised Stable Coins
On Feb. 23, Allaire agreed with SEC Commissioner Hester Peirce, who said the agency should refer it to Congress. Due to the lack of legislation, some believe the SEC has taken matters into their own hands regarding crypto regulation and enforcement.
— Jeremy Allaire (@jerallaire) February 23, 2023
Circle is increasing its workforce by up to 25%, bucking the general trend of crypto layoffs, the report notes.