Circle CEO Pushes for US Stablecoin Rules as Tether Faces Pressure

Circle CEO Jeremy Allaire is advocating for a mandatory registration process for all stablecoin issuers operating in the US. He argues that this move will improve consumer protection and financial stability. His call aligns with growing pressure from US regulators, who are pushing for clearer rules governing digital currencies.

Tether, the largest stablecoin issuer, has been under increasing scrutiny as discussions around regulation gain momentum. The company’s Bitcoin holdings and business strategy could face significant challenges if stricter oversight is enforced. US financial authorities, including the Federal Reserve (Fed) and the Commodity Futures Trading Commission (CFTC), are working on regulatory proposals, with bipartisan support growing in Congress.

Allaire, co-founder and CEO of Circle—the issuer of USD Coin (USDC), the second-largest stablecoin—emphasized the importance of clear rules. He believes any company offering a US dollar-pegged stablecoin in the US should be legally registered, regardless of where they are based.

"It’s about protecting consumers and maintaining financial integrity. If companies must register in other countries, they should do the same in the US," he stated.

Regulatory efforts in the US are intensifying, with Senator Bill Hagerty introducing a bill aimed at creating a legal framework for stablecoins. This proposal is expected to be one of the first crypto-related policies considered under the Trump administration.

Allaire argued that stablecoin issuers should not be able to bypass US regulations while still serving American customers. "Companies shouldn't get a free pass to ignore US law while operating globally," he said.

Tether, the leading stablecoin issuer, recently relocated its headquarters to El Salvador. The company has long faced criticism for its lack of transparency and regulatory oversight. Paolo Ardoino, Tether’s CEO, responded to claims that major crypto firms are lobbying to shape US stablecoin regulations in a way that disadvantages Tether.

“Instead of focusing on building better products and expanding their reach, some competitors seem more interested in undermining Tether,” Ardoino said.

A significant portion of Tether’s reserves are reportedly managed by Cantor Fitzgerald, whose former CEO, Howard Lutnick, was recently appointed as the US Secretary of Commerce. This connection has fueled speculation that regulatory decisions could impact Tether’s business operations.

Momentum for stablecoin regulation is increasing across various US agencies. The Federal Reserve has highlighted how stablecoins could enhance the US dollar’s global dominance by making it more accessible in digital markets. Fed Governor Christopher Waller has argued that properly regulated stablecoins could strengthen the US economy. Meanwhile, Fed Chair Jerome Powell has stressed the importance of a well-defined regulatory framework.

Democratic Representative Maxine Waters has introduced a bipartisan bill aimed at establishing stablecoin regulations. The CFTC is also considering a pilot program that would provide clearer guidelines on how these digital assets should be managed.

One major concern is how new regulations could affect Tether’s business model. Since a large portion of its reserves is held in Bitcoin, stricter US rules may require Tether to sell off assets to meet compliance requirements.

As US lawmakers push forward with a structured framework for stablecoin regulation, the debate over oversight will continue. Circle’s push for mandatory registration signals that regulatory compliance is becoming essential in the evolving digital asset market.