Jeremy Allaire, CEO of Circle (USDC), expressed strong support for Trump’s proposed repeal of SAB 121, a rule by the Securities and Exchange Commission (SEC) that limits the inclusion of cryptocurrencies in the balance sheets of financial institutions.
Allaire expects President Donald Trump to intervene with an executive order to simplify the relationship between banks and digital assets, paving the way for greater adoption of cryptocurrencies, including USD Coin (USDC), the stablecoin issued by Circle itself.
The controversy around SAB 121: Circle (USDC)’s support for Trump’s idea
The SAB 121 was introduced as a regulatory framework aimed at “protecting” investors, but it has been perceived by leaders in the crypto sector as a deliberate obstacle to the adoption of new technologies.
In particular, this regulation imposes restrictions on banks that make it economically disadvantageous to hold criptovalute.
According to Jeremy Allaire, the regulation has had a punitive effect on financial institutions, discouraging them from including digital assets like USDC in their balance sheets.
“The SAB 121 does not protect investors, but limits the ability of banks to innovate in the cryptocurrency sector”,
Allaire stated during the Reuters Global Markets Forum at the World Economic Forum in Davos.
Congress had voted to repeal SAB 121, but the measure was blocked by former President Joe Biden’s veto. The latter had justified the decision by arguing that the regulation was necessary to safeguard the well-being of consumers.
With the return of Donald Trump to the presidency, the crypto sector sees an opportunity to change course. Allaire stated that he is “strongly in favor” of an executive intervention by Trump to repeal SAB 121, allowing banks to more easily adopt technologies based on blockchain and stablecoins like USDC.
Circle has shown its support for the Trump administration with a donation of 1 million dollars to the president’s inauguration committee, made entirely in USDC. This move highlighted the importance of the stablecoin for the future of global financial transactions.
Despite expectations, Trump did not mention cryptocurrencies in his inaugural speech on January 20, focusing instead on topics such as immigration and trade policies.
However, industry observers believe that favorable executive orders for cryptocurrencies could arrive soon, contributing to greater regulatory stability and incentivizing investments in digital assets.
Reazioni del mercato crypto
The anticipation for Trump’s inauguration has generated a significant growth in the cryptocurrency markets. Bitcoin (BTC) reached a new all-time high above 109,000 dollars just before the swearing-in, only to undergo a bear correction of 2%, trading around 103,300 dollars.
In parallel, crypto funds have recorded significant inflows. According to various statistical data, exchange-traded products (ETP) linked to cryptocurrencies attracted 2.2 billion dollars just in the week prior to the settlement, of which 1.9 billion were destined for Bitcoin ETPs.
An executive order by Trump to repeal the SAB 121 could represent a turning point for the crypto industry. Allowing banks to hold digital assets on their balance sheets would not only accelerate the adoption of stablecoins like USDC, but also increase the confidence of institutional investors.
Jeremy Allaire and other leaders in the crypto sector see President Trump as a potential ally to promote more favorable policies for financial innovation. Although the details on any executive orders are not yet clear, the support from Circle and other companies underscores the hope for a more inclusive future for cryptocurrencies in the global economy.