In the Unchained podcast, Jeremy Allaire said that many US lawmakers, especially Republicans, recognize the need to regulate stablecoins. At the same time, Democrats believe that stablecoins are only suitable for speculative trading of cryptocurrencies. In June, US Federal Reserve Chairman Jerome Powell called payment stablecoins money, saying that the central bank should control their issuance, which brought some bipartisan consensus.
Still, Allaire does not believe that legislation to regulate stablecoins will be passed. According to the head of Circle, there are still many ambiguities in this bill. For example, will the Fed be able to challenge the issuance of licenses to companies working with stablecoins if these permissions have already been received from regulators in other states?
“How can the Fed control stablecoins? Will the Fed have any oversight of the company if it receives a license from the New York State regulator? It sounds like technocratism, but it’s important to talk about these things because we’re talking about state rights, federal rights and the distribution of powers,” asks Allaire.
However, the bill pays special attention to the availability of reserves at companies, transparency and risk management, noted the CEO of Circle. Therefore, the passage of this law will allow stablecoin issuers to operate legally, confirming that dollar stablecoins are part of the US and international financial system. And this will pave the way for the mass adoption of stable cryptocurrencies, Allaire concluded.
Ellyre previously called the US Securities and Exchange Commission (SEC) an inappropriate regulator for stablecoins, as these duties should be performed by a banking regulator.
Source: Bits
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