The status of the US dollar as the global reserve currency will be under threat if Congress does not act quickly to regulate stablecoins, warns the CEO of Circle.
On July 13, Jeremy Allaire appeared in a two-minute video by Circle, the issuer of US dollar currency (USDC), targeting lawmakers.
It comes as bipartisan digital asset legislation that was originally floated over a year ago was reintroduced to Congress on July 12 in June 2022.
The dollar’s power center is threatened. Allaire claimed in the video that competition for funds to be used on the internet is increasing, highlighting the threat of foreign digital currencies.
What is the relationship of a cup of coffee to the future of the global economic system? As the US Congress prepares for the first vote on the Stablecoin laws, US political leaders have a choice to make about US competitiveness and the dollar. Video clip of the political leaders below. American dollar pic.twitter.com/9sQyZwq4WE
– Jeremy Allaire (@jerallaire) July 13, 2023
“The real question is whether global trade will take place in digital dollars, or in digital euros or yuan,” he added. Allaire previously claimed that China could boost the adoption and use of the yuan through stablecoins.
He said the US “has a choice to make” about whether it wants “the dollar to be the basis of the currency on the Internet” or whether it “will let other countries lead the way?”
“If the dollar is going to remain the world’s reserve currency, if America is going to lead the global economy for the next 10 years and beyond, we need to build trust in the digital dollar and regulate stablecoins today.”
In his argument for the regulation of stablecoins, Allaire claimed that cryptocurrency will “radically change the way we pay for things.”
Related The European Banking Authority is calling for early adoption of stable currency standards
He added that “billions” would use cryptocurrency since traditional financial payments take “days” and fees amount to “an almost trillion dollar tax on the global economy”.
Would you rather own: a stablecoin backed by US government securities that pays up to 5% interest or a deposit in a bank that looks more like a hedge fund that pays 2%? The answer is clear. I hope that US lawmakers will support the development of well-regulated stablecoins instead of fighting them.
– Mike Novogratz (@novogratz) July 13, 2023
Mike Novogratz, founder of crypto investment firm Galaxy Digital, seemed to agree with Allaire. He rhetorically asked his Twitter followers on July 13 if they would prefer owning a stablecoin that pays higher interest compared to “a bank that looks a lot like a hedge fund.”
“The answer is obvious,” Novogratz said. “I hope that US lawmakers will support the development of well-regulated stablecoins instead of fighting them.”
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