A photo taken in London shows gold-plated commemorative cryptocurrency coins, Bitcoin and Ethereum arranged next to a screen displaying a trading chart, on May 8, 2022.
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The CEO of Circle, the company behind the popular stablecoin USD Coin, sees a strong chance that laws for issuers of stablecoins like it will be passed in 2024.
The stablecoin market, which allows traders to move in and out of cryptocurrencies, is worth $135.3 billion — but it is mostly unregulated. The United States has yet to pass federal regulation of cryptocurrencies, even as jurisdictions around the world have approved new laws focused on cryptocurrencies.
But Jeremy Allaire, Circle's president and co-founder, hopes things will change this year, noting that there is a “very good chance” US lawmakers will approve the stablecoin bill.
Speaking with CNBC at the World Economic Forum in Davos, Switzerland, Allaire said that regulatory developments around the cryptocurrency industry are accelerating around the world, and that the United States is more likely to approve stablecoin regulations than before.
“I think what you're seeing is a desire from the administration, a desire from the Treasury Department, from… [Federal Reserve]“By both chambers of Congress, certainly on a bipartisan basis,” Allaire told CNBC on Monday.
“Digital dollars are happening all over the world, and other governments are regulating digital dollars before the United States,” Allaire added. “And so I think there is a very strong desire to act and assert American leadership and engage appropriate consumer protections.”
Allaire was asked about the Stablecoin Payment Clarity Act, which seeks to bring stablecoins within the same regulatory frameworks that govern traditional financial services companies.
The law was approved by the House Financial Services Committee in 2023 and moved to the House of Representatives for consideration. It has not yet been approved by lawmakers in the House of Representatives.
Circle recently filed its confidential S-1 filing with the U.S. Securities and Exchange Commission, demonstrating the company's intent to list publicly. The company did not disclose any information about the timing of the IPO, which came in the same week that the Securities and Exchange Commission approved the first bitcoin ETFs in the United States.
Asked whether the timing of Circle's listing was in response to the SEC's ETF approval, Allaire said he could not comment on the development due to regulatory restrictions.
2023 has been a booming year for cryptocurrencies, with markets seeing a major rebound, and industry insiders are hopeful that 2024 will be even luckier for the industry.
“Stablecoins in particular remain the killer application of blockchain technology,” Allaire told CNBC. “We are starting to see widespread use around the world.”
“It's been a really strong time for that, and we think 2024, with things like spot ETFs and global regulatory clarity, will open that up even more broadly.”
Dante Disparte, Circle's chief strategy officer and global head of public policy, echoed Allaire's view that 2024 will be the year the US sees stablecoin regulations coming.
“I remain optimistic that a stablecoin payment policy is a possibility early in the new year,” Desparte told CNBC's MacKenzie Sigalos on the sidelines of Davos. “And that's an increasingly bipartisan reality, to a large extent.”
Desparte suggested that concerns about the illicit use of certain cryptocurrencies could motivate US lawmakers to put stablecoin laws into effect, as stablecoins provide a more legitimate use case for everyday purchases and trade that are combined with their more volatile crypto neighbors, which have been closely linked to… High level of criminal activity.
“You have seen in the conflict in the Middle East, for example, the use of some digital assets in space as a means of financing terrorism,” Desparte said.
“Domestically in the US, you can see some assets being used in space as a way to finance fentanyl smuggling, and worse, all of these types of illicit actions that hurt the US dollar hurt the US economy. Bad for the sector, bad for banking and payments,” DeSparte said. And bad for people.”
He added: “Unless this is addressed, it will be against the interest of the country [and] Economy. “So I remain optimistic that this will be a year where policymakers actually move towards doing something positive on stablecoins, rather than implementing,” Circle’s head of policy added.
— CNBC's MacKenzie Sigalos contributed to this article.
