Circle chief: SEC should not regulate stablecoins

“I don’t think the SEC is the regulator for stablecoins. There is a reason why everywhere in the world, including the US, authorities are explicitly saying that payment stablecoins are the realm of the banking regulator, ”Allaire said.

In mid-February, it became known that the SEC intends to sue the Paxos crypto company for participating in the release of Binance USD (BUSD). The Commission classified the asset as a security.

Prior to this, the New York State Department of Financial Services initiated an investigation into the issuer of the stablecoin. According to Bloomberg, Circle filed a complaint with the agency in 2022 about the allegedly insufficient provision of BUSD with reserves.

In 2021, the SEC requested information from the USDC issuer about certain assets, client programs, and transactions. Last week, the company confirmed that the Commission has no claims against it, unlike Paxos.

.@circle has not received a Wells notice. https://t.co/lE74zHVLka

— Dante Disparte (@ddisparte) February 14, 2023

“There are many tastes and smells, as we like to say. Not all stablecoins are created equally. But it is clear that from a political point of view, there is a consensus in the world – this is a payment system and space for the corresponding regulator, ”Allair said.

The SEC has previously called for strengthening the role of qualified custodians in relation to digital assets. The head of Circle generally supported the Commission’s proposal.

“Having qualified custodians who can provide appropriate oversight and bankruptcy protection, among other things, is an important and very valuable market structure. We have learned a lot from our assets ending up on random exchanges,” Allaire said.

Recall that in January, Circle published the first annual report on the development and prospects of the USDC economy.

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