Circle (USDC) founder says stablecoins should be regulated by banking regulator not SEC


Jeremy Allaire shared his opinion on the recent enforcement action by the US securities regulatory body on the stablecoin companies.

Two weeks ago, the US financial regulatory bodies showed their strict action against the crypto companies. In particular, the United States Securities and Exchange Commission (SEC) sent a Wells notice to the BUSD & USDP stablecoin issuer company Paxos and claimed that BUSD was a security under the Howey test. Paxos was also ordered by the NewYork financial watchdog NYDFS to stop issuing new BUSD stablecoins in the crypto market. Paxos followed all the legal orders & terminated its partnership with top-ranked crypto exchange Binance and started a constructive discussion with the US SEC agency over the nature of BUSD stablecoin. 

On 24 Feb 2023, Jeremy Allaire, CEO & founder of USDC stablecoin, appeared in an interview with Bloomberg. In the interview, Jeremy shared his personal opinion on the recent rude actions by the SEC agency on Paxos’ BUSD stablecoin business.

Jeremy noted that the SEC agency is trying to interfere in those matters, which are not under its authority. He said that the SEC agency should not focus on stablecoin because US dollar-pegged stablecoins & stablecoin payments regulation should be under the banking regulatory bodies. 

Circle CEO further added:

“There is a reason why everywhere in the world, including the U.S., the government is specifically saying payment stablecoins are a payment system and banking regulator activity.”

Earlier this week, Circle company confirmed that it had not received any Wells notice from the SEC or any other body as Paxos received. At that time many rumours were claiming that USDC may go through a similar kind of enforcement action, as Paxos was facing.

On the SEC’s new crypto custody rule, Circle CEO showed his support and admitted that such new rules will help to bring better safety for the customers’ funds & help against bankruptcy events.

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