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Circle CEO Jeremy Allaire warned of the risks to the crypto market from exposure to the U.S. Dollar as well as the regulatory risk in U.S. financial systems.
On March 23, Twitter published this statement. thread, Allaire said there “seems to be a large-scale risk-off from USD that is exposed to US banks and US regulatory risk.”
According to the CEO, market anxiety is centered around the massive failure of the US banking system as well as the aggressive regulatory actions regarding crypto.
He pointed out the irony that companies with the highest levels of compliance to US regulations are also the ones most integrated into the banking system. This group is considered dangerous due to the possibility of assets becoming stranded.
Allaire added that a macro risk was also driving rotation from USD into flagship digital assets — Bitcoin and Ethereum
Regulation is needed
The Circle CEO warned U.S. policymakers not to take risks with their next steps.
He said that U.S. market participants are being forced out by their actions into less-regulated jurisdictions, with higher risks and weaker controls.
As such, Allaire said that the current situation calls for a “clear, coherent and pragmatic policy” if the U.S. does want to lose its position as a leader in the blockchain technology space.
USDC remains strong
Allaire said that Circle will continue to operate within the regulatory framework, and adhere to the highest standards of transparency and compliance.
He also added:
“USDC has not missed a beat, we have never failed to mint or redeem USDC for $1, including during the past weeks stress test. As of last week, in the past year, we have redeemed $192.4B USDC at $1, and issued $176.9B at $1.”
Circle’s CEO stated that the bank is looking for new partners in settlement and transit banking to process digital dollars 24/7.