By Michael Scott
Circle chief executive Jeremy Allaire warned Congress that US dollar dominance is quickly declining as other jurisdictions outpace the country’s financial innovation. He added that failure by the policymakers to safeguard the stablecoins would only erode the global dominance of the US dollar.
Circle’s Executive Rallying Policymakers to Support Stablecoin Regulation
Allaire would later tweet in a Thursday, July 13 video indicating the need to regulate stablecoins and build users’ trust in the digital dollars. Its accomplishment would help retain the US dollar as the world reserve currency.
Allaire’s statement echoes the multiple calls demanding that Congress expedite stablecoin regulation. It’s a coincidence that his criticism of policymakers coincides with Congress preparing to vote on the proposed stablecoin legislation. The vote is scheduled upon the House Financial Services Committee (HFSC) completing the stablecoin draft and revision.
The stablecoin regulation is attracting bipartisan support from Democrats and Republicans. The two sides are gradually attaining compromise on the authority that the Federal Reserve should exercise when overseeing the stablecoin issuers.
The move by Allaire to warn of the threats to dethrone the US dollar as the global reserve currency is critical given that Circle’s stablecoin USD Coin (USDC) ranks second largest by market capitalization. A revisit of the performance indicates that USDC’s current market capitalization is $27.375 billion from 27,379,440,567 tokens under circulation, as per Coinmarketcap.
Support Stablecoin Regulation to Safeguard US Dollar Position of Strength
Allaire’s criticism portrays an indirect attack on the US Securities and Exchange Commission (SEC), which recently imposed a series of enforcement actions against crypto firms, including Paxos, which issues stablecoins BUSD. His criticism aligns with the Circle’s petition to the SEC to formulate a legal framework to deliver a defined compliance pathway.
The Circle chief informs Congress to support digital currencies arguing that they would facilitate faster and cheaper remittances. Also, they would help the dollar retain its position of strength and utilization globally.
Allaire admits the fierce competition on the currency of use on internet-based transactions. The primary concern is ascertaining whether future global commerce will utilize digital dollars, yuan, or euros.
The warning conveyed by Allaire on Thursday reiterates the case he presented to Congress in June following the presentation of a third draft by Republicans-led stablecoin legislation.
US Dollar Faces Increased Threat From Digital Yuan and BRICs
Allaire is challenging Congress to expedite the stablecoin to save the US from losing in the global rush towards digital currency. He acknowledges that China poses a fierce threat through its surveillance-embedded digital yuan. He informed the policymakers that the US Dollar had suffered a declining share in the global currency reserves since 2015.
Allaire’s statement is cognisant of the move by BRICS countries to unveil a gold-backed currency as an alternative to the dollar in global trade. The plan captured in a July publication by the Russian news entity RT prompted other countries to seek membership in the BRICS.
Allaire is portraying spirited efforts by the crypto chiefs to play a critical role in pursuing the clear regulatory framework that has become elusive for the US. Also, Circle and Tether have, in their previous statements, admitted spending seven figures to lobby lawmakers for the stablecoin legislation.