The CEO of Circle, the company responsible for the popular stablecoin USD Coin, Jeremy Allaire, believes that 2024 may finally be the year when laws for stablecoin issuers come into effect. With the stablecoin market currently valued at $135.3 billion, it is noteworthy that this sector remains largely unregulated. While various jurisdictions worldwide have started approving crypto-focused legislation, the United States has yet to pass federal crypto regulation. However, Allaire is hopeful, asserting that there is a “very good chance” that U.S. lawmakers will give their approval for a stablecoin bill in the near future.
During an interview with CNBC at the World Economic Forum in Davos, Switzerland, Allaire pointed out that regulatory developments in the crypto industry are gaining traction globally. He emphasized his belief that the United States is more likely than ever to adopt laws for stablecoins. Allaire interpreted the current administration’s, the Treasury’s, and the Federal Reserve’s intentions, as well as bipartisan support in both chambers of Congress, as strong indicators of the desire to act. According to Allaire, other countries are already regulating dollar-digital currencies, which places the U.S. in a position where it needs to assert its leadership and ensure consumer protections are in place.
Allaire was asked about the Clarity for Payment Stablecoins Act, which is designed to subject stablecoins to the same regulatory frameworks that govern traditional financial services companies. Passed by the House Financial Services Committee in 2023, the act is currently awaiting approval by lawmakers in the House of Representatives. Although Circle recently filed a confidential S-1 registration with the U.S. Securities and Exchange Commission (SEC), indicating its plan to go public, Allaire refrained from commenting on any potential connection between Circle’s IPO timing and the SEC’s recent approval of the first U.S. spot bitcoin ETFs.
The year 2023 proved to be a buoyant one for the crypto industry, with significant market recovery. Looking ahead to 2024, industry insiders, including Allaire, are optimistic about the prospects for stablecoins. In Allaire’s opinion, stablecoins remain the “killer app” for blockchain technology, and their usage is growing worldwide. With the introduction of the spot ETF and increased regulatory clarity, he expects stablecoins to gain even wider acceptance.
Dante Disparte, Circle’s chief strategy officer and global head of public policy, shares the sentiment that 2024 will be the year in which the U.S. introduces stablecoin regulations. Disparte echoes Allaire’s optimism, stating that he expects payments stablecoin policy to be a possibility early in the year, driven by a growing bipartisan consensus. Disparte believes that concerns regarding illicit usage of certain cryptocurrencies could motivate lawmakers to establish stablecoin laws. He argues that stablecoins offer a more legitimate use case for everyday purchases and trade compared to their more volatile crypto counterparts, which have been associated with criminal activity.
Disparte points out the illicit actions associated with certain digital assets, such as funding terrorism and drug trafficking, and emphasizes that addressing these issues is crucial for the U.S. economy and the stability of the dollar. He remains confident that policymakers will take affirmative action on stablecoins this year to proactively address potential risks, rather than relying solely on enforcement measures.
The chances of stablecoin regulation coming into effect in the United States in 2024 are looking promising. With increasing momentum globally and a desire for U.S. leadership in the crypto space, stablecoin issuers like Circle are hopeful that lawmakers will approve new legislation. As the industry awaits the outcome, the implementation of stablecoin laws could help protect consumers, ensure financial stability, and pave the way for further innovation in the crypto ecosystem.
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