The United States dollar’s place as a global reserve currency will be under threat if Congress isn’t quick to regulate stablecoins, warns the CEO of Circle.
On July 13, Jeremy Allaire appeared in a two-minute video by Circle, the issuer of USD Coin (USDC), targeted at lawmakers.
It comes as bipartisan digital asset-specific legislation was reintroduced to Congress on July 12 which was originally tabled over a year ago in June 2022.
“The dollar’s position of strength is under threat. Competition for what money gets used on the internet is increasing,” Allaire claimed in the video, highlighting the threat of foreign digital currencies.
What does a cup of coffee have to do with the future of the global economic system? As the US Congress prepares for its first vote on Stablecoin laws, US political leaders have a choice to make about the US and Dollar competitiveness. A video for political leaders below. $USDC pic.twitter.com/9sQyZwq4WE
— Jeremy Allaire (@jerallaire) July 13, 2023
“The real question is whether global commerce will happen in digital dollars, or digital euros or yuan,” he added. Allaire has previously claimed China could boost adoption and use of the yuan through stablecoins.
He said the U.S. “has a choice to make” on if it wants “dollars to be the foundation of currency on the internet” or if it will “let other countries lead the way?”
“If the dollar is to remain the world’s reserve currency, if America is to lead the world economy for the next 10 years and beyond, then we need to build trust in digital dollars and regulate stablecoins today.”
In his argument for stablecoin regulation, Allaire claimed crypto will “fundamentally change the way we pay for things.”
Related European Banking Authority calls for early adoption of stablecoin standards
He added “billions” will use crypto due to traditional financial payments taking “days” and fees amounting to “a nearly trillion dollar tax on the global economy.”
Would you rather own: A stablecoin backed by US govt securities paying as much as 5% interest or a deposit at a bank that looks a lot like a hedge fund paying 2%? The answer is clear. I hope US lawmakers support the development of well-regulated stablecoins rather than fight it.
— Mike Novogratz (@novogratz) July 13, 2023
Crypto investment firm Galaxy Digital founder Mike Novogratz seemed to agree with Allaire. He rhetorically asked his Twitter followers on July 13 if they’d rather own a stablecoin that pays a higher interest compared to a “bank that looks a lot like a hedge fund.”
The answer is clear,” Novogratz said. “I hope U.S. lawmakers support the development of well-regulated stablecoins rather than fight it.”
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