Stablecoin Circle issuer highlights principles for new cryptocurrency regulation

With US politicians against cryptocurrencies back on a war footing, industry leaders are exposing their visions in hopes of an innovative future and advancement from any regulatory framework.

USDC stablecoin issuer, Circle, released its Payment Stablecoin Policy Principles on July 18, hoping they won't fall on deaf ears.

Dante Disparte, Circle's chief strategy office and head of global policies, said the time to act is now, in a time of market correction but continuous and rapid growth. He added that cryptocurrency regulation must balance the risks of stablecoins with "setting clear rules of the road, so that the US dollar continues to be the Internet's leading digital currency and can advance states' leadership and economic competitiveness. United ".

Warnings on super-regulation

The company said the broader market downturn justified policymakers warning of excessive industry risks. The main triggers for this 70% market correction were over-leveraged positions, excessive lending and mortgages, and the collapse of the Earth stablecoin ecosystem.

Disparte outlined 19 principles that reflect Circle's expertise in managing a regulated global stablecoin.

The use of money should be free, regardless of its form, he said before adding that a stablecoin is a "bearer digital instrument" that entitles you to a $ 1 refund.

He said preserving privacy should be a stablecoin design issue, but it's doubtful that banks agree on that. According to Circle, "transparency, accountability and harmonization of risk information" are essential requirements for market confidence and consumer protection, which regulators are likely to support.

Stable coins should not compete with bank-issued currencies, but complement them by offering more transaction options and flexibility. They can also coexist with central bank digital currencies (CBDCs).

As with traditional banks, Circle supports the application of anti-money laundering (AML), counter-terrorism financing, sanctions and customer awareness (KYC) standards.

In addition, stablecoins should have cash and dollar backed composition and liquidity. Circle has also promoted the direct custody of these assets with the Federal Reserve.

In light of the European Markets in Crypto-Assets Framework (MiCA), "US leadership is needed to avoid transatlantic or global mismatches while harmonizing standards for stablecoins," he said.

Finally, he said regulated stablecoins should be treated as cash or cash equivalents in the United States to promote clarity and consistency, so that families and businesses can use them with confidence.

These are some of the principles outlined by the company, and most of them should be in line with any federal legislation when it is finally introduced.

Perspectives of the stablecoin ecosystem

Circle is currently the second largest stablecoin on the market, with USDC 54 billion in circulation. Its market share is approximately 36% of stablecoins' total $ 153 billion.

Tether's USDT remains dominant, but only slightly, with one quotation down 42,8% or USDT 65,8 billion in circulation. Circle has slowly dented Tether's market share over the past year and is expected to overturn it soon.