Circle CEO Jeremy Allaire predicted that the administration of president-elect Joe Biden will ultimately prove to be a supporter of cryptocurrencies.
Speaking on CNBC’s Squawk Box on Dec. 7, Allaire said “they will ultimately be supportive because this is an infrastructure change as big as the initial commercial internet. And they’re going to be focused on infrastructure changes that make America more competitive.”
Cryptocurrencies, he added, are “absolutely going to be a core building block” in improving that competitiveness.
That said, Allaire noted that the administration is facing pressure to regulate cryptocurrencies and Bitcoin more aggressively, from both the left and the right.
“On the very liberal end of the spectrum, the view is that somehow this is not good for individuals who have less access to the financial system. When in fact the opposite is the case. he said:
“This technology—in particular stablecoins—hold the promise of opening up and widening access to the financial system more deeply than the existing banking system.”
Circle’s USDC stablecoin has been on a tear this year, with its market cap up nearly 650%.
Allaire’s remarks come five days after he vigorously panned new crypto regulation proposed by a trio of members of congressional Democrats’ progressive wing. The STABLE Act would require stablecoin issuers to obtain a federal bank charter and follow all banking regulations, obtain Federal reserve approval before launching, and would require them to obtain the FDIC deposit insurance required for bank accounts.
Led by Rep, Rashida Tlaib (D-MI), the bill’s authors pitched it as a way to protect vulnerable poor and middle-income consumers from being “exploited” by “bad actors looking to issue stablecoins.” She added:
“Getting ahead of the curve on preventing cryptocurrency providers from repeating the crimes against low- and moderate-income residents of color that traditional big banks have is—and has been—critically important.”
On the right, Allaire told CNBC that pressure to crack down on stablecoins would likely come from banks that will “lobby aggressively, saying firms in this space need to have tighter rules around them—they can’t be allowed to have less strict rules like PayPal and Square, and certainly crypto firms have.”
That said, he predicted that moderates from the right and left will see the growth of stablecoins as constructive.
Stablecoins like USDC are “a way to take the stability of a dollar sitting inside the federal reserve government banking system, and then imbue it with the powers of cryptocurrency, which is the ability transmit it globally, instantly, frictionlessly—the same way we can exchange information, data, and content. It’s really a way to kind of turbocharge dollars or other fiat currencies by running them on top of a blockchain infrastructure.”
He then dodged a question about the impact widely discussed and likely forthcoming central bank digital currencies will have on the stablecoin market.
The real question, he said, is whether the creators of stablecoin standards built by FinTechs, more established financial firms, and “major internet technology firms” (Libra-founder Facebook anyone?) can work with central banks to create reasonable safeguards and find a reasonable supervisory role for institutions like the Federal Reserve.