Jeremy Allaire, CEO of Circle, is confident that this year 2024, in light of the approval of Bitcoin Spot ETFs, the United States will finally approve the law to regulate stablecoin activities.
Jeremy Allaire, CEO of Circle, the USDC issuing company, expressed his optimism about the possible approval of laws related to stablecoins by the United States government in 2024. In an interview with CNBC at the World Economic Forum in Davos, Switzerland, Allaire mentioned that there is a “very good probability” that the United States government will finally step forward and pass laws on stablecoins during the year 2024.
An optimistic view
Allaire was asked if the Clarity for Payment Stablecoins Act, a bill seeking to regulate stablecoins as traditional financial services and currently pending approval in the House of Representatives, could come into effect this year. In response, Allaire expressed his belief in the high probability of this happening, supported by the recent regulatory situation regarding Bitcoin ETFs.
Allaire also highlighted the desire of the administration, the Treasury, the Federal Reserve and both chambers of Congress to take action regarding stablecoins. He stressed that regulation of dollar-linked digital currencies is advancing in other global financial markets, which highlights the importance of the United States also taking action in this regard, and not being left behind in this regard.
He also highlighted the importance of stablecoin legislation, noting that its approval could mark the beginning of a new financial era, offering a clear and solid regulatory framework for the use of stablecoins in the United States, and the companies and services that make use of them.
Impact of Bitcoin ETFs on Circle USDC and the rest of stablecoins
As for the impact of Bitcoin ETFs on the recent financial landscape, Allaire commented that the launch of these ETFs in the United States might not diminish the use of USDC as a means of accessing the cryptocurrency market. Rather, he described it as a factor that will boost demand for digital currencies, which in turn could accelerate the growth of USDC.
In addition to this, it is important to note that the impact of Bitcoin ETFs on stablecoins is just beginning. In this regard, VanEck advisor Gabor Gurbacs has said that the initial launch of a Bitcoin spot ETF is not expected to have a major immediate impact on Bitcoin. Gurbacs estimates that the initial flow of funds could be around $100 million, mostly recycled money from large institutional investors. However, Gurbacs emphasizes that in the long term, the impact of Bitcoin spot ETFs could be underestimated, comparing the situation to the launch of gold ETFs that led to a revaluation of the gold price.
On the other hand, asset management giant BlackRock has noted that exposure to stablecoins such as Tether (USDT) and USD Coin (USDC) could represent a risk factor for a spot Bitcoin ETF. BlackRock explains that if these stablecoins lose their peg to the US dollar, it could negatively impact the price of Bitcoin or an ETF based on the digital currency.
In the case of USDC, it is noteworthy that the stablecoin has been affected by the banking situation in the United States, which has raised concerns about its stability, and largely explains Allaire's interest in regulating the sector, allowing Circle to offer a more trustworthy image to its users and investors.
Continue reading: Circle Partners with SBI Holdings to Expand USDC Presence in Japan
