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The United States needs to enact stablecoin regulations and digitize the U.S. dollar to address the “very active de-dollarization occurring” globally at present, according to Jeremy Allaire, the CEO of stablecoin issuer Circle.
Allaire made these remarks during the Consensus 2023 conference on April 26, in response to the recent banking crisis in the U.S.
The head of Circle — the issuer of USD Coin (USDC) — urged Congress and the Federal Reserve to take decisive measures, warning that failure to do so would allow alternative currencies and payment systems to further diminish the dollar’s supremacy:
“We have a very active de-dollarization taking place. You’re witnessing significant reactions to the risks associated with the U.S. banking system, concerns regarding the U.S. government itself, a geopolitical impact on various regions of the world [and] the growing interest in alternative payment systems globally.”
“This is occurring and it’s gaining momentum,” he added.
For the USD to remain “competitive” and “secure” in the digital age, Allaire emphasized that the U.S. must urgently establish stablecoin legislation, and the Federal Reserve should integrate the digital dollar into its “core systems” to leverage the substantial global demand:
“The demand for digital dollars like USDC is highly global. We observe that demand worldwide — it is evident in emerging markets, as well as in regions where individuals prefer to hold a digital dollar over their local banking systems […] as an effective medium of exchange for various types of international transactions.”
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To enhance the safety and competitiveness of the dollar, we must undertake two actions:
– harness its potential as a native data type on the internet, allowing for open usage and integration
– eliminate the inherent bank lending IOU risk associated with electronic money, and distinguish payment tokens… https://t.co/DThvu8Dt25— Jeremy Allaire (@jerallaire) April 26, 2023
If the U.S. government fails to act, this will represent a “significant missed opportunity” for the nation, Allaire emphasized.
Related: US Bank collapse — Is crypto being targeted?
This call to action arises as the Chinese yuan surpassed the dollar in cross-border transactions within China for the first time in March, as reported by Reuters.
Chinese Yuan surpasses US dollar as the most-utilized currency in China’s cross-border transactions for the first time in history.
Yuan’s share increased to a record high of 48%, up from nearly zero in 2010.
U.S. share fell to 47%, down from 83% during the same timeframe.
Wow. pic.twitter.com/Lm3Rygpm45— Genevieve Roch-Decter, CFA (@GRDecter) April 26, 2023
Circle has recently taken proactive steps, having launched USDC on the Cross-Chain Transfer Protocol.
Allaire stated that this new solution represents the “most significant new piece of blockchain infrastructure” since the company began minting and issuing USDC in 2017.
Magazine:Unstablecoins: Depegging, bank runs and other risks loom
