The US Dollar Is Under Threat, Says Circle CEO in Warning to Congress

Circle CEO Jeremy Allaire had a firm warning for policymakers on Thursday: Protect stablecoins or the US dollar will lose global dominance.

“If the dollar is to remain the world reserve currency… then we need to build trust in digital dollars and regulate stablecoins today,” said Allaire in a glossy video ad shared on Twitter.

His statement is one of many calls for Congress to consider the moment as it prepares to vote on stablecoin legislation still being drafted and revised by the House Financial Services Committee (HFSC).

Democrats and Republicans have butted heads on the issue, and are slowly reaching a compromise on how much authority the Federal Reserve should have in overseeing stablecoin issuers, among other things. 

Circle is the issuer of one such token: USD Coin (USDC), the second largest stablecoin by market cap. However, with the U.S. Securities and Exchange Commission (SEC) cracking down on other crypto firms (including Paxos, issuer of runner-up stablecoins BUSD), the firm is eager for lawmakers to establish a legal framework that provides it with a clear pathway to compliance. 

In his appeal to Congress, the Circle CEO argues that “digital currencies” will not only make remittances faster and cheaper, but allow the dollar to retain its “position of strength” across the globe. 

“Competition for what money gets used on the internet is increasing,” he said. “The real question is whether global commerce will happen in digital dollars, or digital euros or yuan.”

Allaire made a similar case before congress in prepared remarks last month, shortly after Republicans presented a third draft of their stablecoin legislation. He warned of the competitive threat presented China’s surveillance-embedded digital yuan, and the dollar’s falling share of global currency reserves ove the past 8 years. 

Earlier this month, Russian news outlet RT reported that BRICS countries are planning to launch a gold-backed currency to facilitate global trade between them, rather than dollars. While the plan prompted interest from dozens of other nations to join BRICS, India’s external affairs minister said the nation has not interest in such a project.

Both Circle and Tether have cumulatively spent seven figures lobbying lawmakers on stablecoin legislation.