Circle CEO: Digital Assets Need New Regulatory Definitions

Key Points:

• According to Jeremy Allaire, CEO of USDC stablecoin issuer Circle, major markets like the United States require new statutory definitions of digital assets to give legal clarity to the industry.
• Allaire said while specific use cases should be governed separately, blockchain technology as a whole should be seen as an operating system.
• He asserted that the development of digital asset legislation is being spearheaded by the European Union, with the region’s MiCA rules scheduled to take effect in 2024.

According to Reuters, Jeremy Allaire, CEO of USDC stable currency issuer Circle, said in an interview on the sidelines of the World Economic Forum annual meeting in Davos that major markets such as the United States need new regulatory definitions for digital assets in order to provide regulatory clarity to the industry.

Blockchain technology itself should be considered akin to an operating system, while individual use cases should be regulated individually, Allaire said; the new definition will help make it clearer which regulators are involved in which activities.

“New definitions … would help provide more clarity on which regulators are involved in what activity,” he said.

Additionally, Allaire said that the European Union is leading the way in developing regulations for digital assets, and with the region’s Marketplace in Cryptoassets (MiCA) rules in place, Circle plans to launch its euro-backed stablecoin from its U.S. entity. Allaire added that the company is planning to research other potential digital currency products. He stated:

“We’re quite optimistic that MiCA will create the conditions for a thriving competitive market in the EU.”

According to Circle’s most recent attestation report, 30% of USDC’s reserves are invested in its government money market fund, the Circle Reserve Fund, managed by BlackRock. This appears to be positive news for USDC users.

Circle is ceding some of its management over USDC’s reserves to an external manager subject to SEC oversight, which eventually makes USDC safer. Transparency is also improved because USDC users can now receive regular updates from BlackRock.

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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Harold

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