Jeremy Allaire, Circle's chief executive officer, has responded to the current wave of enforcement proceedings taken by the United States SEC and other agencies in the cryptocurrency business.
In an interview with Bloomberg (1), the CEO of Circle provided his thoughts on the recent actions taken by the SEC against Paxos, the issuer of the BUSD stablecoin.
Circle, a company based in Boston, is the creator of the second-largest stablecoin, which goes by the name USD Coin (USDC) and now has a circulation of more than $42 billion. During the interview, the company's chief executive, Jeremy, suggested that USD-pegged stablecoins ought to be regulated by a financial institution.
Throughout the interview, Jeremy Allaire, the chief executive officer of Circle, indicated that the United States SEC has no place in the realm of payment stablecoins.
Stablecoins, in his view, qualify as payment systems and, as such, should be subject to the oversight of a financial regulator rather than the SEC.
The executive appears dissatisfied with the recent actions taken by the SEC regarding stablecoins. According to him, the governments of several nations, including the government of the United States of America, have a rationale for treating stablecoins as a payment service that falls under the responsibilities of financial authorities.
Even though the Circle chief holds this opinion, his company has stated that it has not been brought to the attention of the SEC. Even with this, a move against Circle by the SEC is possible, given the recent cease and desist notice issued to Paxos and other ongoing regulatory operations.
Even if the CEO disagreed with the SEC's decision to move forward with the stablecoin, he did agree with the regulator on one point. Jeremy praised the latest suggestion made by the SEC regarding crypto custody to simplify the process for exchanges who wish to become custodians.
He believes having qualified custodians who can give adequate market control mechanisms and bankruptcy safeguards is essential. As a result, a cryptocurrency exchange ought not just to get up one day and decide to become a custodian without first satisfying the standards.
SEC being too forcefull in Enforcement
Likewise, on February 23, earlier in the day, Allaire agreed with SEC Commissioner Hester Peirce's statement that the watchdog organization needs to refer questions about legislation for crypto oversight and enforcement to Congress.
In a tweet, Peirce observed people's responses to the SEC and its activities around stablecoins. The commissioner stated that Congress is actively addressing the crypto regulatory framework and legislation, so the SEC should turn to Congress for answers.
He also suggested that the SEC and other regulatory agencies may host public roundtables to explore the issue. At the end of his note, Pierce stated that there are more effective ways to establish rules than through enforcement activities.
The opinions of Allaire are consistent with those of many others who have commented on the SEC's recent activities in the cryptocurrency business. Many people believe that the SEC should discuss the topic of cryptocurrency enforcement with Congress before taking matters into its own hands because there is currently no legislation to regulate cryptocurrencies.
The Chamber of Digital Commerce lashed out at the watchdog in response to the ongoing legal battle between the SEC and a former employee of Coinbase. The agency accused the SEC of trying to classify crypto assets as securities through an unorthodox method to circumvent the need for legislation from Congress.