In an interview with CNBC, Circle CEO Jeremy Allaire said he sees a strong chance that legislation for stablecoin issuers like his company could come into effect in 2024.
• Hardly any crypto laws in the USA so far
• Jeremy Allaire: “Very good chances” for crypto law in 2024
• Stablecoins continue to be the key application for blockchain technology
USA so far without crypto regulation
According to CNBC, stablecoins are a $135.3 billion market, but are still largely unregulated. Federal crypto regulation is still pending in the USA, although corresponding new crypto laws have already been passed in many other parts of the world.
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For example, in the summer of 2023, EU states agreed to a new legal framework for crypto assets, issuers of crypto assets and providers of crypto services (MiCA). This is the first time a legal framework for this sector has been established at EU level. While there is also emphasis on regulation elsewhere, the USA is more likely to rely on tough enforcement of legal actions and penalties: In 2023, the United States proved to be one of the most active authorities in pursuing sanctions and legal actions against crypto companies. However, there is still no law tailored to the industry. “Other countries have comprehensive regulatory frameworks. This does not apply to us. Therefore, matters that should be regulated by law or regulation are being litigated,” CNBC quoted Renato Mariotti, formerly a prosecutor in the securities and commodities fraud division of the US Department of Justice was active.
Good chances for crypto regulation in 2024
However, Circle CEO Jeremy Allaire hopes that this will change this year. He told CNBC that there is a “very good chance” that US lawmakers will approve a stablecoin law. Regulatory developments around the crypto industry are already gaining momentum around the world, and the US is more likely than ever to pass legislation on stablecoins, he explains in the conversation with CNBC, which took place on the sidelines of the World Economic Forum in Davos, Switzerland. “Digital dollars are around the world, other governments are regulating digital dollar currencies before the United States. So I believe there is a very strong desire to act and assert U.S. leadership and include the right consumer protections,” he emphasized.
During the interview, Allaire was also asked about the Clarity for Payment Stablecoins Act, a law that aims to bring stablecoins under the same regulatory framework as traditional financial services companies. The bill was passed by the House Financial Services Committee in 2023 and sent to the full House for consideration. However, final approval from lawmakers in the House of Representatives is still pending.
Hopes for 2024
Recently, Circle also confidentially filed its S-1 registration with the U.S. Securities and Exchange Commission (SEC) to reiterate its intent to go public. However, the company did not provide any information about the planned IPO timing in the IPO filing – which was received the same week that the SEC approved the first US spot Bitcoin ETFs. When asked if the timing of the filing was in response to the SEC’s approval of the ETFs, Allaire explained that he could not comment on this development due to regulatory restrictions.
Allaire also told CNBC that stablecoins continue to be the key application for blockchain technology, with increasing global usage. “We believe 2024 will open this up even further with things like the spot ETF and global regulatory clarity,” Allaire explained.
Dante Disparte, Chief Strategy Officer and Global Head of Public Policy at Circle, also shares Allaire’s assessment that 2024 will be the year in which rules for stablecoins will be introduced in the USA. He expressed optimism that a stablecoin payment policy would be possible early in the new year, stressing that it is increasingly a bipartisan reality. Disparte also cited concerns about the illegal use of some cryptocurrencies, arguing that stablecoins would provide a legitimate use case for everyday purchases and trading while being less associated with criminal activity than other cryptocurrencies. “If this is not addressed, it would be against the interest of the country [und] the economy. “So I remain optimistic that this will be a year where policymakers actually get around to taking positive action on stablecoins, and not just through enforcement,” he emphasized.
How the regulatory environment regarding cryptocurrencies in the United States will develop in the future and whether corresponding laws will actually be passed this year remains to be seen.
Editorial team finanzen.net