Circle, the issuer of USD Coin (USDC,) keeps a close eye on emerging crypto markets across Asia. There is “huge demand” for US dollar-backed stablecoins in emerging markets, and “Asia is really at the center of that,” CEO Jeremy Allaire told Bloomberg.
Therefore, “Asia is a huge area of focus for us,” he said. In particular, Circle is keeping an eye on regulatory developments in Hong Kong, which is looking to establish itself as a crypto hub. Hong Kong approved retail crypto trading on June 1, a major step forward in achieving this goal. Allaire noted:
“Hong-Kong [is] clearly looking to establish itself as a very important center for the digital asset and stablecoin markets and we are paying close attention to that.
He added that regulatory developments in Hong Kong may reflect how crypto markets will grow in Greater China.
The comments from Circle’s CEO came weeks after the company obtained a Major Payment Institution license in Singapore on June 7, allowing it to distribute USDC “more fully in the region.”
Allaire does not believe that a single market will become dominant. He said markets like Singapore, Hong Kong, Tokyo, UAE, Paris, London and the US are “advancing simultaneously” – adding that no one market will gain at the expense of “the other”. Instead, all these markets serve “different dimensions of the economic system.”
Regulatory outlook for stablecoins
There is a global drive for countries to implement stablecoin regulation. For example, Japan introduced its stablecoin regulatory framework on June 1. According to Allaire, this push means fiat-pegged digital currencies are “on the cusp of becoming a part of the mainstream global financial system.”
Allaire said stablecoins need a “full reserve model” where the assets can mix cash and short-dated Treasury bills. He added:
“…if you have that base as an asset base, and that’s regulated and looked after by banking regulators, you actually have the most secure digital fiat instruments in the world.”
Allaire is confident that stablecoins like USDC will remain out of reach of the US Securities and Exchange Commission (SEC).
He argued that some stablecoins may be behaving in a way that classifies them as securities, placing them under SEC scrutiny. However, he said that payment tokens such as USDC “clearly will not be subject to SEC scrutiny.”
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