Circle sheds light on the principles of the new cryptocurrency regulations


As US politicians declare war on cryptocurrencies once again, industry leaders are unveiling their visions in hopes of an innovative future and innovations in every regulatory framework.

On July 18, the USDC Stablecoin Issuers Circle announced its stablecoin payment guidelines, hoping they don’t fall on deaf ears.

Dante Disparte, Circle’s office chief strategist and head of global policy, said now is the time for action, in an era of market corrections but steady and rapid growth. He added that cryptocurrency regulation must balance the risks of stablecoins “by establishing clear rules on the way forward to ensure that the US dollar remains the leading digital currency on the Internet and improves the leadership and economic competitiveness of countries.” United “.

Warnings against over-regulation

Druba said the sharp drop in the market confirmed the warnings from policy makers about extreme industry risks. The main reasons for this 70% market correction were over-indebted positions, excessive lending and mortgages, and the collapse of the terrestrial stablecoin ecosystem.

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Disparte outlined 19 principles that reflect Circle’s expertise in governing a regulated global stablecoin.

The money should be free to use in any form, he said, before adding that the stablecoin is a “digital tool of choice” that entitles you to a $ 1 Vina refund.

He said privacy should be an issue when creating a stablecoin, but banks are unlikely to agree. According to Circle, “transparency, accountability and harmonization of risk information” are essential requirements for market confidence and consumer protection that regulators are likely to uphold.

Stablecoins are not meant to compete with bank-issued currencies, but complement them by offering multiple transaction options and flexibility. They can also coexist with central bank digital currencies (CBDCs).

Like traditional banks, Circle supports the use of Anti-Money Laundering (AML), Counter Terrorist Financing, Sanctions and Customer Awareness (KYC) standards.

In addition, stablecoins must have a guaranteed composition and liquidity in cash and dollars. Circle has also encouraged the direct custody of these assets with the Federal Reserve.

In the wake of the European Crypto Asset Markets (MiCA) framework, “US leadership is needed to avoid transatlantic or global divergences in harmonizing standards for stablecoins,” he said.

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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 safely.

Here are some of the policies the company is working on, and most of them should comply with federal law when it is finally implemented.

Perspectives on the stablecoin ecosystem

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

Tether’s USDT remains dominant, but only marginally, down 42.8% to USDT 65.8 billion outstanding. Circle has slowly sold out of Tether stock over the past year and is expected to reverse this trend soon.

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