Biden's 'watershed' crypto order hits all regulatory 'angles': Circle's Allaire

The chief executive of the largest U.S. stablecoin issuer is calling President Joe Biden’s executive order on cryptocurrency a “watershed moment,” as the administration demonstrates it understands digital coins are here to stay.

Jeremy Allaire, co-founder and CEO of Circle, compared the government’s recognition of the importance of crypto to the early 1990’s, and the wakeup call to the dawning of the commercial Internet.

“Back at that point in the 1990s, the technology had a lot of excitement and entrepreneurship, but also a lot of questions about how to regulate it, who the regulators would be, what kind of competitive posture the U.S. should have. Those are exactly the same kinds of questions now,” Allaire told Yahoo Finance in an interview.

This week, President Biden directed agencies to study cryptocurrencies, and a central bank digital currency (CBDC), and come up with a government-wide approach to regulating digital assets. The long-awaited order sets priorities for digital assets regulation, including, consumer and investor protection, financial stability, illicit finance, and maintaining U.S. leadership in the global financial system.

Allaire told Yahoo Finance the government’s holistic approach was the right sort of dialogue needed at this moment in crypto. Agencies should “look at it from all of the different angles,” he said.

“What does this mean as a new competitive infrastructure for the United States, what does the federal government need to support the U.S. be strong in this industry, but ensure that the risks are getting addressed,” the executive added.

“A big piece of what this executive order does is it orders federal agencies to get smart, to get educated, to do the work, to understand this... because of its importance,” Allaire said.

According to Allaire, one of the major policy issues identified by the EO, ias well as the President’s Working Group on Financial Markets, is how a digital dollar will function, and how it’ll work alongside the physical greenback.

The federal government sees that U.S. dollar competitiveness is a strategic national issue, and Allaire thinks the order will advance that dialogue even further. Allaire has stated previously that the U.S. is winning the worldwide digital currency race, but questioned whether the U.S. could maintain momentum.

“I think in many people’s minds there is a space race going on between China, who’s operating a digital currency with a great deal of surveillance capabilities, and there’s questions in Washington around the role of the government versus the private sector,” Allaire told Yahoo Finance.

There are critical questions around privacy and security for a central bank digital currency. But right now, the executive said a digital dollar is taking the form of stablecoins – and there’s an urgent desire to get a regulatory framework in place to oversee that sector of the crypto market.

“What you’re hearing from Treasury Secretary Janet Yellen and Fed Chair Powell in testimony is an understanding that digital currencies in the private sector, in the stablecoin space are absolutely going to be a part of the financial system and coexist with whatever the federal government determines it needs to do over time,” Allaire added.

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