Jeremy Allaire shared his opinion on the latest bill, which focussed to bring clarity on the regulation system for stablecoin issuer companies in the US jurisdiction.
On 15 April 2023, The U.S. House Financial Services Committee published a draft of its Stablecoin bill. This bill aims to prohibit the issuance of algorithmic stablecoin and only provide stablecoin business licenses to non-bank entities.
The final approval of this bill brings stablecoin regulation under the authority of the Federal Reserve (Fed), where the Fed will ensure whether the stablecoin issuer companies running their stablecoin business with full maintenance or not, which means maintaining reserved funds behind the stablecoin circulation to maintain the value of each stablecoin pegged by exactly $1.
Jeremy Allaire, CEO of USDC stablecoin issuer firm Circle, said that the introduced stablecoin bill needed a better level of bipartisan support because this bill is going to be a pivotal point for the future of the US dollar & use of the dollar in the internet world.
“It’s an extraordinary moment for the future of the dollar in the world, and the future of a currency on the internet. There is the need for deep, bi-partisan support for laws that ensure that digital dollars on the internet are safely issued, backed and operated,” Circle CEO.
Further Jeremy asserted that laws on the stablecoin sector should be clear enough so that innovation in this sector can takes place within the regulatory framework.
Heatwave among algorithmic stablecoins
In the crypto sector, the top-ranked popular algorithmic stablecoin was TerraUSD (UST) but in May 2022 this stablecoin collapsed badly.
After the downfall of TerraUSD stablecoin, the majority of the algorithmic stablecoins faced a significant outflow of users.
In the present time, Cardano’s algorithmic stablecoin Djed is in the race to achieve dominance in the crypto sector as a flagship stablecoin.
To fight against any big high sell pressure, the Cardano team overcollateralized Djed reserved in value of ADA & other coins by 400%. But experts believe that Djed will fail to get space in the US jurisdiction, if this bill passed.
Read also: Now wrapped Bitcoin cBTC is available on Cardano (testnet)
Circle (USDC) CEO believes the American stablecoin bill could prove pivotal for the US dollar future
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