The U.S. Securities and Exchange Commission is not the right regulator for stablecoins, according to Jeremy Allaire, the chief executive and founder of Circle Internet Financial Ltd., Bloomberg News reported. The Boston-based firm is the issuer of the second-largest stablecoin, USD Coin, with over $42 billion in circulation. Stablecoins usually aim to maintain a one-to-one ratio with key assets such as the dollar by holding comparable reserves, and act as a crucial medium between the traditional financial system and digital assets. The tokens are used to facilitate trades, exchange assets between blockchains and serve as a haven from the volatile price swings that hit cryptocurrencies, hence the stablecoin name. The main U.S. regulator for the securities industry has tightened rules over crypto firms from exchanges, custodians and stablecoins after a series of meltdowns in the industry last year, including the algorithmic stablecoin TerraUSD. Meanwhile, the New York State Department of Financial Services ordered Paxos Trust Co. last week to stop minting Binance USD, the third-largest stablecoin, because of its relationship with exchange giant Binance. Tether is the largest stablecoin issuer.
