The CEO of Circle, Jeremy Allaire, has raised concerns about the potential threat to the United States dollar’s status as a global reserve currency if stablecoins are not regulated promptly by Congress. In a recent video released by Circle, the issuer of the USD Coin (USDC), Allaire directed his message towards lawmakers, urging them to take action.
The warning comes as bipartisan legislation focused on digital assets was reintroduced to Congress on July 12, after being initially proposed over a year ago in June 2022. Allaire emphasized the increasing competition in determining which currency is used for online transactions and highlighted the rise of foreign digital currencies as a significant challenge to the dominance of the dollar.
According to Allaire, the real question lies in whether global commerce will primarily occur in digital dollars, digital euros, or digital yuan. He previously suggested that stablecoins could potentially accelerate the adoption and usage of the yuan, asserting that the United States has a crucial decision to make. He posed the question of whether they want the dollar to remain the foundation of internet currency or if they are willing to let other nations take the lead.
Allaire made a case for the regulation of stablecoins, stating that cryptocurrencies will fundamentally transform the way people make payments. He argued that traditional financial transactions are burdened by lengthy processing times and exorbitant fees, amounting to what he referred to as a “nearly trillion dollar tax on the global economy.” Allaire predicted that billions of individuals would embrace cryptocurrencies as a result.
The sentiment expressed by Allaire was echoed by Mike Novogratz, the founder of crypto investment firm Galaxy Digital. Novogratz took to Twitter, asking his followers if they would prefer to hold a stablecoin that offers higher interest rates or a bank that resembles a hedge fund. He expressed his hope that U.S. lawmakers would support the development of well-regulated stablecoins rather than hinder their progress.
As the debate surrounding stablecoin regulation intensifies, the future of the U.S. dollar as the leading global reserve currency hangs in the balance. The decisions made by Congress will play a crucial role in shaping the path forward for cryptocurrencies and their potential impact on the global financial landscape.
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