The United States must implement stablecoin legislation and digitize the U.S. dollar (USD) to mitigate the “very active de-dollarization taking place” around the world right now, says Jeremy Allaire, the chief executive of stablecoin issuer Circle.

Allaire’s comments at the Consensus 2023 conference on Wednesday, April 25, were made in light of the recent U.S. banking crisis.

The Circle — the stablecoin issuer behind USD Coin (USDC) — CEO called on Congress and the Federal Reserve to take action otherwise alternative currencies and payment systems will continue to eat into the dollar’s dominance:

“We have a very active de-dollarization taking place. You're having very significant reactions to the U.S. risks in the U.S. banking system, risks with the US government itself, a geopolitical imposition on many parts of the world [and] the desire for alternative payment systems all around the world.

“This is happening and it's accelerating,” he added.

For the USD to remain “competitive” and “safe” in the internet era, Allaire says the U.S. needs to lay out stablecoin legislation imminently and the Federal Reserve needs to implement the digital dollar into its “core systems” to capitalize on the high demand around the world:

“The demand for digital dollars like USDC is highly global. We see that demand all around the world — we see it in emerging markets, we see it in markets where people want to hold a digital dollar versus their local banking system [...] as an efficient medium of exchange for various types of international transactions.”

If the U.S. government doesn’t get its act together, this will be a “giant missed opportunity” for the country, Allaire stressed.

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The call for action comes as the Chinese yuan overtook the USD for cross-border transactions in China for the first time in March, according to Reuters.

Circle has taken some responsibility into its own hands of late, having launched USDC on Cross-Chain Transfer Protocol (CCTP).

Allaire said the new solution is the “most important new piece of blockchain infrastructure” since the firm began minting and issuing USDC in 2017.

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