The United States must capitalize on the “high demand” for digitally native U.S. dollars, particularly from those in emerging economies with weak local banking systems, the Circle CEO says.
Circle CEO Warns of Active and Accelerating De-dollarization
Jeremy Allaire, CEO of Circle, the stablecoin issuer responsible for USD Coin (USDC), emphasized the importance of the United States adopting stablecoin regulations and digitizing the US dollar (USD) to counter the ongoing “active de-dollarization” happening globally.
Speaking at the Consensus 2023 conference on Wednesday, April 25, Allaire highlighted the recent banking crisis in the US and called on Congress and the Federal Reserve to take action. If they don’t, alternative currencies and payment systems could continue to undermine the dollar’s dominance:
“De-dollarization is actively taking place.” There are strong reactions to risks in the US banking system, US government risks, geopolitical impositions on many regions, and a growing demand for alternative payment systems worldwide. “This is occurring and gaining momentum”
Allaire believes that for the USD to remain “competitive” and “secure” in the digital age, the US should quickly adopt stablecoin laws and integrate a digital dollar into the Federal Reserve’s “core systems” to leverage global demand:
“Demand for digital currencies like USDC is highly global.” This demand can be seen across the world—in emerging economies and markets where people prefer holding a digital dollar over their local banking system […] as an efficient means of exchange for various types of international transactions.”
Allaire warns that if the US government does not take action, it will be a “massive missed opportunity” for the nation. Reuters reported that in March, the Chinese yuan surpassed the US dollar in cross-border transactions in China for the first time.
Circle has taken matters into its own hands by introducing USDC on the Cross-Chain Transfer Protocol (CCTP). Allaire claims that this new solution is the “most significant new piece of blockchain infrastructure” since the company started minting and distributing USDC in 2017.
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