Circle Outlines Core Principles for Stablecoin Regulation in the US
- Circle has urged the United States to take the lead in the global quest for stablecoin regulation.
- The European Union previously urged regulators to ensure uniformity in regulating stablecoins in the continent.
Over the last few weeks, conversations about stablecoin regulation in the US have gotten intense, and Circle, the company behind the USD Coin (USDC), has shared its view on how the country can best approach stablecoin regulation. In a blog post, Dante Disparte, Circle’s chief strategy officer and head of global policy, urged American legislators to weigh the dangers while creating a regulatory framework for stablecoins.
Disparte listed the 18 principles Circle had formed as part of its campaign to influence stablecoin legislation in the United States. The company emphasized privacy issues, the need for regulatory clarification on how stablecoins can exist side by side with a central bank digital currency, and the need for fair competition between banks and non-banks regarding a U.S. dollar-pegged digital currency.
According to Disparte,
Harmonizing national regulatory and policy frameworks for dollar digital currencies advances U.S. economic competitiveness, job creation and payment system optionality, while averting a harmful domestic ‘fintech constitutional crisis,’ and global regulatory arbitrage.
Before joining Circle in April 2021, Disparte was a part of Facebook’s Libra stablecoin project, which was eventually renamed Diem. Disparte, in his post, also cited the Markets in Crypto-Assets Framework, or MiCA, legislation intended at unifying cryptocurrency rules among EU member states, which was passed by the European Union in June. He urged the U.S to take the center stage in stablecoin regulation to prevent a global mismatch with regard to stablecoin regulation. He added,
As the Biden Administration’s Executive Order works its way through a whole-of-government review, there is no greater testament to national unity of purpose than for Congress to act in a pro-innovation, bipartisan way on the President’s Working Group on Financial Markets’ (PWG) call to action on stablecoin policy.
The emergence of #Stablecoins (noting that not all are created equal) has triggered an important global policy and regulatory conversation. With a front row seat in this work since 2019, I'm pleased to share @circlepay's stablecoin policy principles.https://t.co/GGPFBgJ0AL— Dante Disparte (@ddisparte) July 18, 2022
Circle’s CSO said that the firm was offering first-hand advice since it was behind USDC, one of the biggest stablecoins with more than $54 billion in circulation. Through a worldwide network of exchanges, thousands of digital wallets, and other offerings in more than 190 countries, Diparte claims USDC has successfully powered more than $5 trillion in on-chain transactions while also reducing the basic cost of operations and financial services.
Listing its policy on stablecoin regulation to the US, Circle urged that the use of money should be unrestricted and without restriction, regardless of its form, as long as it is legal and consistent with democratic norms.
The post also advised that in the development and use of dollar digital currencies, the premise of privacy and its preservation should be established as a design concept. Circle also advised that dollar digital currencies should encourage the development of ethical financial services and dependable, available banking and payment methods through the deployment of a financial market infrastructure that is open, and constantly upgradeable.
In November, a report on stablecoin regulation in the US was published by the President’s Working Group on Financial Markets. The recommendation featured having stablecoin issuers subject to adequate regulatory control under Congress’ jurisdiction. There are concerns that stablecoins might develop to the point where they exist outside the control and framework of regulatory bodies such as the Securities and Exchange Commission and Commodity Futures Trading Commission.