Circle’s USDC suffers temporary de-peg with CEOs stance against SEC’s regulation of stablecoins, what’s next?

Circle CEO Jeremy Alliare maintains that US financial regulator SEC should not regulate stablecoins. USD Coin (USDC), the stablecoin issued by Circle temporarily lost its $1 parity with the US Dollar. 

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SEC is not the appropriate regulator for stablecoins: Circle CEO

Circle CEO Jeremy Allaire told Bloomberg in a recent interview that the US Securities and Exchange Commission should not be tasked with the regulation of stablecoins. Allaire maintains that stablecoins are payment systems and not “securities.” 

Allaire was quoted as saying:

I don’t think the SEC is the regulator for stablecoins. There is a reason why … [governments are] specifically saying payment stablecoins are a payment system and banking regulator activity.

When the SEC issued a Wells Notice to Paxos, the issuer of the stablecoin Binance USD (BUSD), Circle maintained its stance that “not all [stablecoins] are created equal.” According to Circle, since stablecoins like USDC are payment systems, it implicitly excludes stablecoins from being classified as securities.

USDC temporarily loses its peg

Circle issued stablecoin USDC temporarily lost its $1 parity with the US Dollar. USDC nosedived to $0.9961, a 24-hour low, before climbing back to the $1 level. The stablecoin has suffered a temporary de-peg several times since February 23, as seen in the chart below:

USDC price chart 

The US SEC has yet to comment on its stance on Circle’s stablecoin. The US financial regulator recently started its crackdown on stablecoin issuers, and cryptocurrency exchange platforms.