- This position was made by the Executive Director Dante Disparte
- He urged the federal authorities to support only “responsible innovation” and not to limit the industry as a whole.
Last weekend, March 11 and 12, respectively, USDC lost its peg to the dollar. This happened against the backdrop of the collapse of Silicon Valley Bank, which contained about $ 3.3 billion in company funds.
Fortunately, the crisis is over. Circle found a new banking partner, the USDC/USD ratio returned to 1:1 and the situation stabilized.
But what happened still hit some of the “players”. The UST example, as well as the heated panic and regulatory ambiguity, have taken their toll. Investors and traders lost money.
In this regard, Circle Executive Director Dante Disparte called on the US Congress to consider legislation on stablecoins as soon as possible. His words quotes Yahoo Finance Edition:
“I have been investing in cryptocurrencies since 2019. All this time, there was constant talk about potential risks. But only talk. In practice, we are faced with complete inaction.”
In his statement, Disparte cited the Dodd-Frank Act. It was adopted after the 2008 crisis in order to reduce risks for the American financial system.
The head of Circle believes that the same moment has come for the cryptocurrency industry. A similar law that encourages “responsible innovation” is needed now.
This is a bill authored by Senators Patrick McHenry and Maxine Waters. This bill effectively gives stablecoins legal status and “separates” them from other cryptocurrencies.
“It was the loss of confidence in the bank that caused the Circle crisis. It is ironic that it was the “high-risk” crypto company that had to abandon the problematic partner.”