The second-largest stablecoin on the market, USDC, is issued by Circle, whose CEO, Jeremy Allaire, has expressed doubt that a stablecoin regulation will be passed any time soon. The need for stablecoin regulation in the United States is widely acknowledged, but Allaire said on Laura Shin's podcast Unchained that he doesn't think the recently advanced "Clarity for Payment Stablecoins Act" would become law.
Jeremy Allaire, CEO of Circle, is dubious about the "Clarity for Payment Stablecoins Act."
The CEO of stablecoin business Circle, Jeremy Allaire, is dubious about the likelihood that the recently advanced Clarity for Payment Stablecoins Act would become legislation. Although there has been agreement on the necessity for stablecoin regulation in the nation, Allaire said on Laura Shin's cryptocurrency podcast Unchained that he doesn't believe this legislation would be passed.
The absence of definition of important topics in the bill, which in Allaire's opinion needs to be addressed, is the basis for his opinion. Allaire pronounced:
How much of a part the Federal Reserve plays in not defining the criteria is a major factor in this. Does the Fed have the power to veto the licensing of stablecoins?
State vs. Federal
The involvement of the Federal Reserve in stablecoin matters is another issue that Allaire thinks would slow down or perhaps block the passage of the Clarity for Payment Stablecoins Act.
The Federal Reserve may or may not have authorities relating to state-issued licenses for stablecoin enterprises, according to Allaire. He emphasized:
Does the Fed have any shared or supervisory responsibilities if a state, like as New York, grants someone a stablecoin charter? Although it may seem technical, the information on state and federal rights as well as the distribution of power is actually very significant.
While being very detailed about reserves, transparency, and risk management, Allaire emphasized a number of the act's benefits, claiming that its ratification would create a clear pathway for bank and non-bank stablecoin issuers.
The Clarity for Payment Stablecoins Act, according to Allaire, "effectively creates legal certainty that a dollar stablecoin is a part of the global and U.S. financial system," opening the door to widespread public adoption of these instruments.
What are Allaire's opinions on the Clarity for Payment Stablecoins Act, in your opinion? Comment below with your answer and let us know.