It may be made legally mandatory for stablecoin issuance entities such as Tether (USDT) and USD Coin (USDC) to be subjected to the similar regulations as banks, which does not scare the Head of Circle.

Specifically, Jeremy Allaire – current Head of USDC issuance firm Circle – reportedly delivered his remarks regarding the Biden administration’s proposal to establish a bank-like regulation for stablecoin issuers, which are overall supportive. 

He reportedly emphasized that the primary goal of the proposal is to come up with legislation for US-based dollar stablecoin issuers, to have them subjected to the similar regulation as banks on the federal scale, by the Federal Reserve represents major strides contributing to the industry’s development.

Allaire stated that the existing steps would offer enhancements to the currently employed money transmission-centric regulations “to a much more fundamental infrastructure at the core of what potentially the future of banking and capital markets look like.”

“There’s a real recognition that as these payment stablecoins grow, they could grow at internet scale relatively quickly,” Allaire further revealed. 

When the stablecoin markets achieve the benchmark of the hundreds of billions in circulation and trillions in transactions, the risks posed to financial markets and financial stability will prove to be a major obstacle that needs a solution to. 

Previously, the Biden administration’s proposal had a target of establishing a “special-purpose charter” dedicated to stablecoin issuers, classifying them in the similar category as banks. 

In Allaire’s belief, the specifics of a bank charter for a crypto firm may require back-and-forth gradually with both the FDIC and other agencies that oversee banks.