Circle and Tether: US Regulation Clashes in Stablecoin Wars
As the stablecoin wars heat up, the CEOs of Circle and Tether have expressed opposing views on stablecoin regulation in the US. With regulatory frameworks becoming increasingly important, leaders in the crypto space are trying to protect their positions in the competitive market.
Circle’s Take: “No Free Pass”
Jeremy Allaire, CEO of Circle, has asserted that all US dollar-pegged stablecoins, including USDC, should be registered and regulated in the US. He stressed that no business should be allowed to “ignore US laws and do whatever they want.” Allaire also argued that registration and regulation are the best way to protect consumers and financial integrity.
Circle is currently the issuer of USDC, the second-largest stablecoin on the market with a value of $56.6 billion. Allaire stressed that any company, whether foreign or based in Hong Kong, would need to comply with US regulations if it wanted to offer a US dollar-pegged stablecoin in this market.
Tether's View: "The Real Goal Is to Kill Tether"
Paolo Ardoino, CEO of Tether, has pushed back against Allaire's comments, saying that competitors are trying to push for legislation to eliminate Tether from the market. According to Ardoino, USDT is the most powerful tool in promoting the dominance of the US dollar in emerging markets, and accused his competitors of trying to "kill Tether" instead of focusing on building better products.
USDT is currently the largest stablecoin with a total value of over $142.8 billion. Ardoino said that USDT has become an important tool in distributing the US dollar globally, especially in developing countries. He also emphasized that Tether holds more than $115 billion in US Treasury bonds, making it one of the largest holders in the world.
The Debate Over Stablecoin Regulation in the US States
US lawmakers are currently discussing a clearer regulatory framework for stablecoins. Republican Senator Bill Hagerty has introduced a bill that would require stablecoin issuers to hold collateral in Treasury bills and Federal Reserve bonds. This has created a backlash in the crypto community, with many arguing that the new regulations could favor US companies at the expense of foreign issuers.
Framework Ventures co-founder Vance Spencer has warned that removing access to the Treasury market for international stablecoin issuers could damage the global dominance of the US dollar. However, Avichal Garg of Electric Capital argues that requiring compliance with US standards is entirely reasonable to protect consumers.
The Future of Stablecoins in the US
With competition between stablecoin issuers intensifying, discussions about regulation in the US will continue to intensify. While Circle and Tether are on opposite sides of this battle, the development of the regulatory framework will be a decisive factor in the future of stablecoins in the world's largest market.
