Circle Will Support The Governments In Regulating Stablecoin Issuers

Circle will support the governments in regulating the stablecoin issuers as they believe a regulatory framework will foster growth in the industry as we are reading more in today’s cryptocurrency news.

USDC Issuer Circle will support the Governments in creating a regulatory framework for regulating stablecoin issuers as it declared support for the Presidential Working Group on Financial Market’s proposal for regulating fiat-backed crypto issuers like Banks as they hope the move will foster ecosystem growth. Jeremy Allaire the CEO of Circle said that it is quite impressive to regulate stablecoin issuers because the growth of these tokens will only get the asset class widely adopted:

“We’re supportive of that recommendation. We think [this] represents significant progress in the growth of this industry.”

Circle’s CEO comments came weeks after the US President’s Working Group on Financial Markets proposed that Congress will regulate stablecoins like banks. The major focus of the regulatory committee will curtail any form of risk that stablecoins pose to the existing financial system. Stablecoins were initially developed to be used in the crypto market and there’s a possibility that the asset class will be adopted by businesses and households as payment methods especially now since there’s a rise in interest for crypto.

If these stablecoins are widely accepted as legal tender, the committee warned that a huge amount of money could be transferred out of the FDIC-insured banks with strong ramifications for credit creation. Based on the fears, the committee recommended that the lawmakers should establish laws where FDIC-insured banks have the right to issue stablecoins that are going forward. According to Jelena Mcwilliams, the FDIC chair regulators could have to ensure that stablecoins issuers have a reserve on-demand that can satisfy the withdrawal requests especially for bigger issuers that pose a threat to the financial system. Reacting to the proposal by the presidential committee, Allaire noted that the volume of stablecoins in circulation and the number of completed transactions is a risk to the glboal financial market and it is becoming a very important topic of discussion.

Allaire added that the company is upgrading its stablecoin to align with teh fundamentals of the future systems of banking, payments, and capital market. The circle will file for a national charter bank application but the company is also considering opting for FDIC insurance and preparing itself if the lawmakers rule that only these types of banks will issue stablecoins. Allaire disclosed:

“We expect this to be a process where we work kind of hand-in-hand with regulators on this.”