Bankuro pushes crypto to ‘no oversight,’ says Circle CEO
The ongoing crisis and the uncertainty surrounding the global banking system can push the cryptocurrency market into a more gray area in terms of regulation, the Circle boss believes.
Jeremy Allaire, CEO of USD Coin (USDC) issuer Circle, took to Twitter on March 23rd to share his reflections on market dynamics in the wake of the Silicon Valley Bank (SVB) collapse.
In the Twitter thread, Allaire highlighted the “deep market anxiety” about general exposure to the US financial system and the risk of a large-scale US banking system failure.
The Circle CEO emphasized that the ongoing banking crisis has much more potential to harm crypto firms regulated in the US rather than those regulated in other jurisdictions, saying:
“Ironically, the players who have held the strongest position with US regulation and US banking system integration are considered ‘unsafe’, with fears that assets could be stranded.”
Allaire went on to say that the SVB contagion could potentially drive the crypto market into a less regulated area, urging US policymakers to think about what happens next. Addressing the US White House and the US Congress, the CEO claimed that there has been no situation in the past 10 years where the US has so badly needed a “clear, coherent and pragmatic policy”.
“We are at serious risk of seeing an entire strategic technology arena slip away from American leadership,” Allaire warned, adding:
“Right now, market participants are shifting to unsupervised platforms, completely opaque banking and risk exposures, and stories of lax financial risk/integrity controls. This is not going to end well.”
Allaire stated that Circle will continue to operate within a regulatory perimeter and will continue to work to add “more transit and settlement bank partners.” He also emphasized that the USDC “has not missed a beat” and has never failed to reduce or redeem the USDC at $1, including “during the last few weeks’ stress test.”
As previously reported by Cointelegraph, Circle has experienced major problems due to its exposure to the collapsed SVB bank, with the USDC stablecoin briefly losing its 1:1 peg to the US dollar. The stablecoin was then reiterated amid Circle announcing Cross River as a new banking partner and expanding ties with BNY Mellon.
Related: Tether CTO on USDC depeg: ‘Bitcoin maxis was right all along’ | PBW 2023
Allaire’s remarks have echoed some observations in the cryptocurrency community, with some crypto enthusiasts expressing confusion over how US-regulated firms like Circle were affected by the crisis, while competitor “chads” like Tether (USDT) have experienced zero or no problems so far.
As previously reported, Tether was one of the first companies to deny exposure to SVB and other troubled US banks in mid-March. According to Tether chief technology officer Paolo Ardoino, the stablecoin issuer has no exposure to SVB, Signature Bank or Silvergate.
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