“There is a very good chance” that the US will pass stablecoin laws this year, says Circle CEO
On January 15, 2024, Jeremy Allaire, CEO of Circle, best known as the issuer of the fiat-backed stablecoin USD Coin (USDC), spoke with CNBC at the World Economic Forum in Davos, Switzerland.
Allaire said that regulatory developments around the cryptocurrency industry were picking up around the world, and that the United States was more likely than before to pass laws for stablecoins.
Stablecoins and Blockchain technology
Allaire began by addressing progress in blockchain technology, comparing it to the post-dotcom era where, despite market fluctuations, technological development continued strongly. He emphasized that stablecoins remain the “killer app” of blockchain technology, and their use is expanding globally.
Allaire sees 2024 as a crucial year for blockchain, especially with regulatory clarity and developments like the spot ETF, which he believes will further open up the market.
Bitcoin ETF Impact on USDC
When asked about the potential impact of the new Bitcoin spot ETF on USDC (Circle’s stablecoin), Allaire expressed confidence that growing participation in the digital asset market would drive greater demand for digital dollars in Internet. He sees the growing market and participation as a positive tide lifting all boats, including USDC.
Circle IPO and Regulatory Filings
Regarding Circle’s IPO, Allaire declined to comment on specific regulatory filings but reiterated the company’s commitment to becoming a trustworthy, transparent and well-regulated public company. He highlighted that Circle’s move toward an IPO aligns with its long-term vision for regulatory compliance and transparency.
Global Regulatory Progress and US Stablecoin Legislation
Allaire analyzed the global regulatory landscape, highlighting significant developments in Congress, courts and regulators around the world. He anticipates that stablecoin legislation will be enacted in almost all major global financial markets in 2024. He believes this context favors growth in the stablecoin sector.
Technological Progress and Market Cycles
Allaire, as a technologist, focused on lasting technical innovations in blockchain technology. He emphasized that these innovations are compounding and surpassing previous technological advances. Allaire believes that regardless of the current interest rate or inflationary environment, technological progress in blockchain will continue unabated.
Perspectives on US Stablecoin Regulation
Allaire expressed optimism about the chances of stablecoin regulation in the US in 2024. He noted a strong desire from the administration, Treasury, Federal Reserve and bipartisan support in Congress to regulate digital dollars. Allaire believes that US leadership in this area is crucial, especially since other countries are already regulating digital currencies.
“Digital dollars are existing around the world; other governments are regulating digital dollar currencies before the United States. That’s why I think there is a very strong desire to act and affirm American leadership and get the right consumer protections,” Allaire added.
Dante Disparte, Circle’s chief strategy officer and global head of public policy, echoed Allaire’s view that 2024 would be the year the United States sees the entry of rules for stablecoins.
“I remain optimistic that stablecoin payments policy is a possibility at the beginning of the new year. And that’s increasingly a bipartisan reality, to a large extent,” Disparte told CNBC’s Mackenzie Sigalos.
Industry Challenges and Regulation
Reflecting on the industry’s challenges, including high-profile deals and collapses in 2022, Allaire acknowledged that parts of the industry remain unregulated globally. However, he predicts that 2024 will be a year of regulatory advances in many jurisdictions, leading to a clearer, regulated market structure. This change, according to Allaire, will reinforce confidence in the cryptocurrency space.
By Leonardo Perez
