US Central Bank Digital Currency Unlikely, Circle CEO Claims
Jeremy Allaire on the future of stablecoin regulation.
Central Bank Digital Currencies (CBDCs) are increasingly in focus. Governments worldwide seek to develop these instruments to serve their monetary policy needs. However, despite the potential benefits, there are also significant concerns involved. Sponsored
In a recent interview, Circle CEO Jeremy Allaire dismissed the idea of a CBDC in the United States. Instead, he claimed that stablecoins like USDC can offer the same kind of functionality.
While the global central banks are looking into CBDCs for various benefits, the US Fed might not be one of them. In a Thursday, September 12 interview, Circle CEO Jeremy Allaire was clear about a CBDC in the United States.
According to Allaire, there is “no effort to build Central Bank digital currency” in the country. He pointed out that neither the public nor Congress supports the idea. This is in contrast to other countries like China, which has actively developed its Digital Yuan.
These efforts have sparked concerns among digital freedom and privacy advocates. They believe this technology gives governments unlimited control over money and, therefore, over the population, which is partially why the idea has not taken root in the United States.
Instead of relying on a government-backed CBDC, Allaire claims that the private sector addresses these issues.
Why Stablecoins Still Dominate
Allaire claims that Stablecoins, like USDC, already offer much of the functionality that a CBDC would provide. This applies especially to stablecoins in regions where they are well-regulated, including the European Union and Japan, where Circle is gaining traction.
Given the right regulatory framework, Circle sees immense potential in stablecoins. “Programmable composable money is a breakthrough,” Allaire explains, with great potential. He believes the amount of transactions that would happen globally on these networks “will potentially go exponential.”
On the Flipside
In early July, Circle became the first stablecoin issuer to comply with the EU’s MiCA regulation on stablecoins.
Tether criticized the EU’s MiCA regulations, claiming that they open the issuers to the risk of bank failures.
Why This Matters
With stablecoins like USDC offering similar functionality to CBDCs, Allaire’s comments emphasize the increasing relevance of stablecoins in global financial systems.
Read more about CBDCs: Central Bank Digital Currency (CBDC): What to KnowRead more about crypto transaction safety: Can Crypto Transfers Be Safer? Neo and GoPlus Team Up for Security