Jeremy Allaire, the co-founder and CEO of Circle, called for all USD-based stablecoin issuers to be registered in the US.
Allaire's statements emphasized the increasing regulatory scrutiny of stablecoins. These financial instruments play a crucial role in the digital asset market, connecting crypto and traditional finance (TradFi).
Stablecoins Become the Focus of Crypto Regulation
Allaire's statement was made in the context of the Circle Stablecoin Day event held in New York City (NYC). According to the Circle CEO, the event was attended by business and product leaders from various financial institutions.
"Today is Circle Stablecoin Day in NYC," Allaire emphasized on X in a Tuesday post.
Headquartered in New York, Circle is the issuer of USD Coin (USDC), the second-largest stablecoin after Tether's USDT. According to Allaire, mandatory registration will enhance consumer protection and promote financial integrity.
"This is about consumer protection and financial integrity. Whether you're a foreign company or headquartered in Hong Kong, if you want to provide your USD stablecoin in the US, you need to register in the US just like we have to register everywhere else," Business Times reported, quoting Allaire.
The discussion on stablecoin regulation has become more heated, especially as legislative efforts are progressing. Senator Bill Hagerty recently introduced a bill to establish a legal framework for stablecoins. This is expected to be one of the first crypto-related policies considered under the Trump administration.
"There should be no exemptions, right? Where you can just bypass US law and do whatever you want anywhere and sell into the US," Allaire emphasized.
Tether recently moved its headquarters to El Salvador and has long been a dominant force in the stablecoin market. However, its lack of transparency and regulatory oversight has drawn criticism.
Tether CEO Paolo Ardoino has addressed allegations that some major crypto companies are trying to influence US stablecoin regulation.
"While the business model of our competitors should be to build a better product and a larger distribution network, their real intention is to 'destroy Tether,'" Ardoino said.
Tether's reserves are partially managed by Cantor Fitzgerald, and the former CEO of the company, Howard Lutnick, has recently been confirmed as the US Commerce Secretary. This connection has raised speculation about how regulatory decisions may impact the stablecoin market.
Government Leaders Push for Stablecoin Regulation
The regulatory momentum for stablecoins is building across multiple US agencies. The Federal Reserve has considered the potential impact of stablecoins on the global financial system. According to Federal Reserve Governor Christopher Waller, stablecoins could expand the global dominance of the US dollar by making it more accessible in digital markets.
Fed Chair Jerome Powell has also supported stablecoin regulation, emphasizing the need for a clear and structured supervisory framework. Meanwhile, Democratic Representative Maxine Waters proposed a bipartisan bill to regulate stablecoins, indicating that the issue has support from both parties.
Additionally, the Commodity Futures Trading Commission (CFTC) will discuss a pilot program for stablecoin regulation. This could provide further clarity on how these digital assets will be managed.
One of the potentially largest impacts of US stablecoin regulation is on Tether's business model. With a significant portion of its reserves held in Bitcoin, new rules may force Tether to liquidate some of its assets to comply with US regulations.
The debate over regulatory oversight will continue as US policymakers move towards establishing a framework for stablecoins. Circle's push for mandatory registration reflects the growing playing field for digital assets. Compliance with regulations may soon become a necessity rather than an option.
