By Circle CEO Jeremy Allaire has expressed his confidence in the United States finally passing long-awaited stablecoin legislation this year.
In a recent interview with CNBC at the World Economic Forum’s annual meeting in Davos, Switzerland, Allaire said there is growing momentum in the country’s efforts to regulate digital currencies tied to the US dollar.
“I think there’s momentum. I think there’s a very good chance of seeing this pass into law this year,” Allaire remarked during the interview.
Allaire, who leads the company responsible for the popular stablecoin USD Coin ( USDC), highlighted the global trend of central banks and governments embracing digital currencies tied to their national currencies.
He pointed out that other countries had already taken steps to regulate such digital dollar currencies while the United States lagged behind.
“Digital dollars are happening around the world, other governments are regulating dollar-digital currencies before the United States. So I think there is a very strong desire to act and assert U.S. leadership and get the right consumer protections involved,” he explained.
The US Proceeds With Stablecoin Legislations
Allaire’s positive outlook is not unfounded, as there have been notable developments on the stablecoin legislative front in the United States.
One of the prominent bills in this regard is the “Clarity for Payment Stablecoins Act,” introduced by U.S. Representative Patrick McHenry.
The bill aims to establish a regulatory framework for stablecoin issuers, similar to that of traditional financial institutions.
Additionally, the “Stablecoin Transparency Act,” introduced by Senator Bill Hagerty on March 31, 2022, has also been under consideration in Congress.
Circle, the company behind USDC, has been actively advocating for stablecoin legislation for several years.
They initiated lobbying efforts in late 2021, collaborating with strategic consulting firm Invariant and reportedly spending approximately $760,000 on these efforts.
Jeremy Allaire believes that with the recent approval and launch of spot Bitcoin exchange-traded funds (ETFs), the regulatory landscape is evolving favorably.
He anticipates further developments in the cryptocurrency space throughout 2024, citing increased regulatory clarity as a significant driver of growth.
“It’s been a really powerful time for that, and we think 2024, with things like the spot ETF and world regulatory clarity, is going to open this up even wider,” Allaire stated.
Concerns About Use of Stablecoins in Illicit Finance Remain
However, Circle’s Chief Strategy Officer and Global Head of Public Policy, Dante Disparte, acknowledged potential concerns among lawmakers regarding the misuse of stablecoins for illicit purposes.
“You’ve seen in the conflict in the Middle East [with] the use of certain digital assets in the space as a vehicle for funding terrorism,” Disparte cautioned.
“Domestically in the United States, you can see the use of certain assets in the space as a vehicle for funding fentanyl trafficking,”
He emphasized that addressing these concerns is crucial to ensure that stablecoin regulation serves the best interests of the country and its economy.
In a recent report released by the United Nations Office on Drugs and Crime, Tether, one of the world’s largest stablecoin Tether, has been identified as a prominent tool employed by money launderers and fraudsters operating in Southeast Asia.
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