Circle CEO Warns Congress of Threat to the Dollar

The status of the U.S. dollar as the world’s reserve currency would be under threat if Congress does not move forward with passing the stablecoins bill, Circle CEO Jeremy Allaire said.

The dollar’s strong position is under threat. Competition over which money is used on the Internet is growing,

In his view, to preserve the dollar’s place on the world stage it is necessary to “regulate stablecoins today.” The real question is whether global trade will be conducted in digital dollars, digital euros, or yuan, he added.

As an argument in favour of regulating stablecoins, Allaire cited the view that cryptocurrency “will fundamentally change the way we pay for goods.”

His position was supported by Galaxy Digital CEO Mike Novogratz. On July 13 he posed a rhetorical question to his followers:

“What would you prefer: a stablecoin backed by US government securities with a yield of up to 5%, or a bank deposit that looks a lot like a hedge fund paying 2%? The answer is obvious. I hope US lawmakers will back the development of well-regulated stablecoins rather than fight them.”

The U.S. House Financial Services Committee published a bill regulating stablecoins in April. The initial version paid broad attention to issuer activities and oversight.

Later lawmakers proposed an updated version of the document, which would deprive the U.S. Securities and Exchange Commission of jurisdiction over this class of assets.

During congressional hearings, policymakers criticised the bill for outdated data in its preparation and urged updating information for the next session.

Preliminary hearings for the third version of the document took place on June 13.

Allaire called the passage of the document an important step in creating conditions for a safe digital assets market and supporting the dollar’s competitiveness.

Earlier, Circle CEO outlined plans to issue a stablecoin in Japan. He believes that if this class of assets is used in cross-border trade, the country could become an important market for the crypto industry.