Circle CEO Optimistic of Stablecoin Laws in 2024
Circle chief executive Jeremy Allaire expressed optimism in enacting stablecoins laws in 2024. The executive, whose firm is the issuer of stablecoin USD Coin (USDC), restated the strong desire the US harbored to assert its leadership in digital dollar currencies.
Allaire expressed confidence that the US lawmakers will pass the stablecoin law much anticipated in 2023. The executive acknowledged the existence of momentum, hence the chance for the law to be passed in 2024.
Allaire issued the comments during the Monday, January 15 interview with CNBC at the side of the World Economic Forum (WEF) annual meeting held in Davos, Switzerland.
Digital dollars are expanding their geographical presence globally, prompting other governments to take the lead in regulating dollar-pegged currencies. Allaire acknowledged that the US lags in stablecoin regulation, creating a strong desire to assert leadership. He indicated that the US lawmakers are inspired by the need to instill consumer protections.
US Crypto to Benefiting from Progress in Courts, Lawmakers and Regulators
Allaire, who oversees the second-ranked stablecoin USDC by market capitalization, pointed to the progress realized by various stakeholders, including the US courts, regulators, and lawmakers.
Allaire affirmed his optimism that the US will usher in payments stablecoin policy early in 2024. His pronouncement received backing from Dante Disparte, who serves as Circle’s head of strategy and the global executive of public policy.
Allaire made an indirect reference to the Clarity for Payment Stablecoins Act tabled by the US Representative Patric McHenry as among the prominent proposals under review by the House and Senate. The bill seeks to present a regulatory framework for the stablecoin issuers that mirrors guidelines offered to the traditional financiers.
The Congress is also reviewing the Stablecoin Transparency Act, which was brought as a proposal by Senator Bill Hagerty on March 31, 2022.
Circle Lobbying for Stablecoin Laws
Allaire pronouncements come when Circle has religiously pushed for stablecoin legislation. The efforts trace to 2021 when it unveiled the lobbying efforts with the strategic consulting Invariant. ProPublica recently estimated that Circle’s allocation towards lobbying is approaching $1 million.
Allaire banks on the recent approval of spot Bitcoin ETF by the Securities and Exchange Commission to predict more regulatory developments. The Circle’s chief considers the tide change a decisive period where the spot ETF is leading the world towards regulatory clarity in 2024.
Disparte admitted that the lawmakers may drag foot given their concerns that stablecoins are accessible to criminal actors in facilitating illicit finance.
Disparte pointed to the revelation in the Middle East conflict where digital assets were unmasked for being a mechanism to fund terrorism. Domestically in the US, several crypto assets were discovered facilitating transactions for fentanyl trafficking.
Disparate considers that unless such issues are addressed, approving stablecoins regulation is against the country’s and economy’s interests.
USDC Steep Decline in 2023
Allaire optimism coincides with the release of the report that USDC suffered a steep decline in the USDC tokens in circulation. Nonetheless, the USDC user base increased steadily in the year.
The report conveyed by Circle on Monday, January 15, indicated that wallets that held $10 worth of its USDC rose by 59% last year. The USDC realized growth in its user base despite the $20 billion loss. Circle stated that the USD Coin gained users despite the depreciation witnessed in its market capitalization.
The report summarizes the USDC economy and captures a broader overview of USDC usage. The report indicates that the circulating supply of USDC declined from $45 billion to $25 billion till November, translating to a 44% reduction.
Circle attributes the substantial decline to the widespread regulatory crackdowns amid bankruptcies, higher interest rates, and fraud in crypto in 2023. The interplay of such factors forces users to pull out from the USD Coin ecosystem into the conventional markets.
The optimism harbored by Circle’s chief executive yields an exciting moment for USDC recovery in 2024. The primary concern involves whether the stablecoins laws will help USDC attract investors lost to the traditional markets.
Editorial credit: sdx15 / Shutterstock.com
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