There is no denying the fact that the cryptocurrency market has grown stronger throughout 2021, as evidenced by the total industrial capital, which recently reached $3 trillion, albeit in a relatively short period.
However, use of stablecoins, a class of cryptocurrencies linked to fiat currencies, has surged in recent months, thanks in large part to their ability to help investors feel comfortable with digital currencies while eliminating many of the underlying issues. – Like daily price fluctuations – which are currently affecting the cryptocurrency market.
The stablecoin segment has grown an astonishing 500% since 2020, rising from a total market capitalization of around $20 billion to over $125 billion. As one might imagine, this massive increase has not gone unnoticed by regulators around the world, to the point that the Biden administration is actively seeking to develop a bank-like regulatory system for issuers of stablecoins.
And while crypto proponents are known for their anti-regulatory approach, stablecoin issuers such as the US Dollar (USDC), Circle CEO Jeremy Aller recently took a supportive stance on the matter. In a recent interview, he said that proposals to regulate issuers of stable dollar coins in the United States at the federal level mean an advance for the growth of the industry. “There is a real acknowledgment that when these stablecoin payments go up, they can grow relatively quickly online,” Aller commented.
Are rules the way forward?
After contacting Circle, a company spokesperson told Cointelegraph that the company has long been fully supported by the US Congress, which is establishing federal oversight for the issuance of stack coins, adding:
“The rapid expansion and its strategic importance to the competitiveness of the dollar in the age of crypto and blockchain is critical. We also know that, as with the advent of the Internet, people around the world can only succeed through strong public-private partnerships. Tangible benefit of public blockchains.”
A company spokesperson said Circle will continue to welcome any regulation that helps improve consumer and business safety while supporting innovation and development that enhances economic competitiveness and national security. “We believe this can lead to a fundamentally more efficient, secure and reliable financial system,” they said.
Ryan Matofo, CEO and founder of Ardana, a decentralized and stablecoin exchange protocol on Cardano, told Cointelegraph that as regulatory requirements continue to rise, there must be recognition of the different stablecoin models in the space and its spectrum of decentralization. We live together. He said:
“Deposit-type centralized stable deposit regulation makes sense because they operate within the traditional financial realm of holding US dollars in accounts. Decentralized stack currencies are outside of this and exist where the on-chain assets should be treated as equals. Peer-to-peer platforms, not “issuers.”
Needless to say that oversight?
Stephen Parker, CEO of cryptocurrency wallet app Crypterium and former general manager of the Visa Network for Central and Eastern Europe, told Cointelegraph that there is absolutely no future stable currency environment that is not constrained by rules that at least comply with the rules. created by banks. …today is due.
He noted that Sir John Cunliffe, Deputy Governor of the Bank of England, recently commented that continued growth and use of digital currencies could lead to a serious financial crisis. Added gardens:
“The response from decision makers on Libra, now a dim form, a stablecoin, has been swift and has a major implementation setback. Anyone who thinks that regulators will allow a new, unregulated currency to play a leading role in financial finance is not a struggle to control the regulations, but once they are resolved.” Coins, their creators and managers will be tightly regulated.”
Not everyone was convinced of the need to tighten the rules. Steve Gregory, CEO of the US subsidiary of the Currency.com trading platform, told Cointelegraph that not all coins are created equal, and unlike banks, they do not have the complete trust and creditworthiness of a sovereign country like the United States.