'Very good chance' US will pass stablecoin laws in 2024: Circle CEO

Speaking with CNBC at the World Economic Forum in Davos, Switzerland yesterday, Jeremy Allaire, the CEO of USDC +0.11% -issuer Circle, was optimistic about the United States government passing stablecoin laws in 2024.

Asked whether the Clarity for Payment Stablecoins Act, a bill that aims to regulate stablecoins like traditional financial services — currently pending approval in the House of Representatives — could come into force this year, Allaire said he thought there was a very good chance it would. 

The U.S. government has yet to pass any federal crypto laws. However, with regulatory progress being made in every major market around the world, the U.S. is now more likely to approve stablecoin laws, according to Allaire. “I think what you're seeing is a desire from the administration. I think you're seeing a desire from the Treasury, the Fed, both chambers of Congress, and certainly on a bipartisan basis,” he said.

“Dollars and digital dollars are happening around the world. Other governments are regulating dollar digital currencies before the United States,” he added. “You're seeing progress on stablecoin legislation. Stablecoin laws are going to be on the books in almost every major global financial market in 2024.”

“And so I think there is a very strong desire to act and assert U.S. leadership and get the right consumer protections involved. And so I think there's momentum,” Allaire said. “I think there's a very good chance of seeing this pass into law this year.”

The impact of spot bitcoin ETFs on USDC

Also asked whether the launch of spot bitcoin ETFs in the U.S. last week would diminish the use case for USDC as an on/off ramp for the cryptocurrency, it was “definitely a tide that lifts all boats,” Allaire said.

“Our view is a growing market and a growing participation in the market is just going to continue to drive more demand for digital dollars on the internet. And actually, we think, an accelerant to what can happen with USDC,” he added.

Circle files for IPO amid declining USDC market share

Last week, Circle confidentially filed for an initial public offering of its equity securities, offering them the flexibility to finalize their plans to become a publicly traded company away from the public eye.

Details on share quantity and pricing are yet to be determined, with the launch pending Securities and Exchange Commission review and subject to market and other conditions. “We've been very clear that we intend to build a trusted, transparent, well regulated company, and eventually becoming a public company is part of that,” Allaire told CNBC. “But I really can't make any comment about any regulatory filing.”

The company had previously been talking to advisers about a potential IPO, Bloomberg reported in November, citing anonymous sources. "While it’s not clear how much Circle would seek to be valued in an IPO, it was valued at $9 billion when it tried to go public in a blank-check deal in 2022," the report said at the time.

The filing follows a disappointing 2023 for the USDC-issuer, seeing its market share among stablecoins fall from around $48 billion (32%) to $26 billion (19%) of the now $140 billion stablecoin market as holders either reallocated to other crypto assets or exited into fiat last year.

In March, USDC significantly depegged from the U.S. dollar — dropping to as low as $0.88 following Circle's announcement of holding $3.3 billion in reserves at the failed Silicon Valley Bank.