• The US Securities and Exchange Commission (SEC) recently cracked down on crypto companies, including Kraken and Paxos.
• Jeremy Allaire, CEO of Circle, believes that stablecoins should not be regulated by the SEC as they are part of the banking sector.
• Allaire suggests that another regulator in the US would be better suited to oversee these assets.
Crackdown From the SEC
The US securities regulator has recently gained attention from the crypto community after it issued a crackdown against several crypto companies. This includes Kraken and its staking services, which had to pay a $30 million penalty and halt its platform after settling with the watchdog. Additionally, Paxos received a Wells warning from the SEC for allegedly selling unregistered securities through its Binance USD (BUSD) stablecoin.
Circle CEO’s Opinion
Jeremy Allaire, CEO of Circle, spoke to Bloomberg about this situation and expressed his belief that stablecoins should not be regulated by the SEC as they are part of the banking sector instead. He suggested that another regulator in the US would be better suited to oversee these assets.
Stablecoin Assets Widely Considered Non-Securities
Stablecoins have been widely considered non-securities until now but this clampdown from the SEC changed all that. It also brought attention to other firms who issue these digital assets such as Tether and Circle. This is why Jeremy Allaire’s opinion matters in this context since he represents one of those main players in this space.
Allaire Believes Stablecoins Should Be Regulated By Another Watchdog
Allaire believes that while some aspects of stablecoins may fall under SEC jurisdiction such as fraud or manipulation prevention measures, they should overall be regulated by another watchdog in order to ensure proper oversight over their use cases and applications within financial systems worldwide. His suggestion is quite logical given that stablecoins are meant to act like fiat currencies rather than securities investments so it makes more sense for them to be regulated by a banking-related agency instead of an investment-oriented one such as the SEC at least for now.
Conclusion
In conclusion, Jeremy Allaire believes that stablecoins should not be regulated by the Securities and Exchange Commission due to their nature as part of the banking sector rather than investments products like stocks or bonds which come under SEC jurisdiction. He suggests another agency in charge specifically for overseeing these digital assets which could help establish proper regulations around them without putting too much pressure on existing frameworks pertaining investments or payments systems respectively either domestically or internationally speaking