Circle, the company behind the popular USDC stablecoin, is urging the US Congress to take swift action in creating regulatory guidelines for stablecoins.
Dante Disparte, the director of strategic development at Circle, emphasized that despite constant discussion about the risks associated with stablecoins since 2019, there has been little to no action taken to address the issue.
Disparte believes that the time has come for Congress to pass financial sector bills, similar to the banking reforms that followed the 2008 financial crisis.
However, Disparte is not calling for a ban on innovation, but rather for regulations that encourage responsible development of stablecoins.
The recent market turmoil caused by the collapse of Silicon Valley Bank (SVB) also highlights the need for regulatory oversight.
During the crisis, the USDC stablecoin briefly lost its peg to the dollar, causing concern among investors.
Circle responded by reporting $3.3 billion in SVB-related reserves and announcing the transfer of remaining deposits to BNY Mellon accounts.
Additionally, Circle formed a partnership with Cross River Bank to integrate payment services and resume conducting settlement transactions in US dollars.
As the use of stablecoins continues to grow, regulatory clarity is necessary to ensure stability in the financial sector.
Circle and other companies in the space are calling for responsible regulation that supports innovation and growth while protecting consumers and investors.