SEC not the right body to oversee stablecoins, says Circle CEO

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Key Takeaways

  • Circle CEO states dollar-pegged “payment stablecoins” should be under the oversight of a banking regulator rather than the SEC.
  • Circle is the issuer of USDC, the second-largest stablecoin.

The United States Securities and Exchange Commission(SEC) has recently ramped up its efforts to enforce crypto regulatory measures in the Web3 space. The regulatory’s body’s enforcement actions on certain crypto firms in recent days have also received immense backlash from crypto enthusiasts.

Circle and CEO Jeremy Allaire is the latest to express his displeasure as SEC’s interference in the crypto sector. In a recent Bloomberg interview, the Circle chief executive commented that SEC was not the right body to regulate stablecoins. He added that dollar-pegged “payment stablecoins” should be under the oversight of a banking regulator rather than the SEC.

“There is a reason why everywhere in the world, including the U.S., the government is specifically saying payment stablecoins are a payment system and banking regulator activity’, he noted. Allaire further pointed out, “There are lots of flavors; as we like to say, not all stablecoins are created equal.”

Circle is the issuer of USD coin-USDC, a stablecoin pegged to the U.S. dollar. There is over $43 billion worth of USDC tokens in circulation, and it is the second-largest stablecoin by market cap, according to CoinMarketCap.

Last month, Allaire had stated USDC is a prime example of how stablecoin use is growing. Lawmakers in the U.S. and abroad are becoming aware of the “significant size and business” that stablecoins can provide. He further predicted that in 2023 stablecoin issuers will ” be normalized in almost every major market.”

The CEO’s comment comes amid the SEC issuing a Wells notice to Paxos over its issuance of Binance stablecoin-BUSD. Paxos is facing a lawsuit from the SEC, in which the agency alleged BUSD was an unregistered security. Circle revealed last week that it hadn’t received a Wells notice from the SEC in the wake of the Paxos clampdown. 

In recent months, SEC Chair Gary Gensler had increased its scrutiny of the stablecoin sector, raising the specter that the tokens could be considered securities, making them subject to SEC’s disclosure and registration requirements and its oversight. 

As part of its crypto enforcement measures, SEC had asked crypto exchange Kraken to shut its U.S. staking operation and pay a $30 million settlement.

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Saniya Raahath
Saniya Raahath

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