Original title: Circle predicts stablecoins will become mainstream global payment method
Original author: Pradipta Mukherjee
Original source: https://cointelegraph.com
Compiled by: Mars Finance, Daisy
Circle predicts stablecoins will become a mainstream global payment method
Stablecoin issuer Circle expects internet payment companies and other financial services firms to try to enter or expand into the space.
As the issuer of the world's second-largest stablecoin USDC, Circle is "confident" that stablecoins will become mainstream currencies. At the same time, global regulations should be coordinated to ensure compliance of all payment stablecoin issuers.
“Circle is confident that stablecoins will achieve mainstream adoption as money for the internet age,” Dante Disparte, Circle’s chief strategy officer and head of global policy, told Cointelegraph in an exclusive interview.
“We expect that internet payment companies and other financial services companies will attempt to enter or expand into this space, which is a strong signal that stablecoins are here to stay,” Disparte noted.
However, Disparte believes that it is also important that relevant rules and regulations are harmonized globally. He said that the basic principles of conservative reserves and financial crime compliance should also apply to any company claiming to issue a payment stablecoin.
Circle moves to New York
Disparte’s comments come as the stablecoin issuer plans to move its global headquarters to New York in early 2025 and filed for an initial public offering (IPO) in January.
Disparte noted that the U.S. framework empowers state banking and money transmission regulators to develop and regulate the payments industry at the state level. Other countries regulate payments or electronic money (e-money) activities at the national level.
“A key question now is whether the U.S. will eventually enact federal stablecoin regulation, or whether it will continue in its current state of uncertainty, which U.S. policymakers on both sides of the aisle consider unacceptable,” Disparte explained:
“The lack of a regulatory framework for dollar-pegged stablecoins in the United States represents a threat to U.S. interests. This vacuum could incentivize the development of products that exploit trust in the dollar and circumvent U.S. regulation, potentially serving as a safe haven for illicit actors.”
Disparte believes that federal legislation is critical for payment stablecoins, which will help promote safe competition for Americans to send, spend, save and secure money in an increasingly technology-dependent market.
What are stablecoins? How do they work? Source: YouTube.
He said the stablecoin bill advanced by the House Financial Services Committee in July 2023 has generated significant policy momentum and support.
"Congress should approve this bill in a bipartisan manner, and if it reaches the president's desk, it should be signed into law. This legislation will set a bottom line for all issuers to comply with U.S. anti-money laundering, counter-terrorist financing, and sanctions obligations," Disparte said.
He added that the norms should apply to U.S. payment stablecoin issuers, as well as their international counterparts, many of which have been licensed to issue dollar-denominated stablecoins in jurisdictions including the European Union and the United Arab Emirates.
Can the EU’s MiCA 2.0 fill the gaps in the system?
Parts of the EU’s Markets in Crypto-Assets (MiCA) regulation came into effect in June, with new rules on stablecoins taking effect on June 30.
On July 1, Circle announced that it had become the first global stablecoin issuer to achieve compliance under the MiCA regulatory framework, after receiving an electronic money institution (EMI) license from the French banking regulator. Circle’s USDC and EURC both meet regulatory requirements under the new rules.
“With MiCA, Europe has succeeded in achieving what other jurisdictions, including the United States, have yet to achieve: providing legal and regulatory clarity for the entire digital asset market, not just a subset of it,” Disparte said. However, he noted:
“Like all new rules or comprehensive regulations, MiCA is imperfect and in some respects too detailed, so much so that EU policymakers are already considering MiCA 2.0, which could fill in some of the gaps in the regime, such as non-fungible tokens (NFTs), decentralized finance, and other areas.”
Competition in the stablecoin market intensifies
Competition in the stablecoin market is intensifying with the entry of PayPal’s USD-pegged stablecoin, PayPal USD, which has a market capitalization of over $1 billion. Ripple Labs has also begun testing its USD-pegged stablecoin, Ripple USD (RLUSD), on the XRP Ledger and Ethereum, with plans to expand to more blockchains.
Tether’s USDT remains the largest stablecoin with a market cap of more than $118 billion, according to CoinMarketCap. Tether also announced plans to launch a new stablecoin pegged to the United Arab Emirates dirham (AED).
Stablecoins: How the most stable cryptocurrency could bring down the entire market. Source: YouTube.
The total market capitalization excluding algorithmic stablecoins hit an all-time high of $168 billion as of August 26. The market hit an all-time high of $167 billion in March 2022, but fell to $135 billion by the end of that year.
Disparte added: “We welcome any competitor to come to the US, the EU, Singapore, etc., to undergo a rigorous licensing process, to follow the standards that our company is built on, and to become a compliance-first company so that this ecosystem can grow and thrive in the long term.”
