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 on the balance sheets of financial institutions.
Allaire expects President Donald Trump to step in with an executive order to streamline the relationship between banks and digital assets, paving the way for further adoption of cryptocurrencies, including USD Coin (USDC), the stablecoin issued by Circle itself.
Controversy over SAB 121: USDC supports Trump’s idea
the Saab 121 It was presented as a regulatory framework intended to “protect” investors, but leaders in the cryptocurrency sector viewed it 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 cryptocurrency.
According to Jeremy Allaire, the regulation has had a punitive effect on financial institutions, discouraging them from including digital assets such as USDC on their balance sheets.
“SAB 121 does not protect investors, but it limits the ability of banks to innovate in the cryptocurrency sector,”
Allaire made the remarks during the Reuters Forum on Global Markets 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 justified the decision by saying that regulation is necessary to protect the welfare of consumers.
With Donald Trump returning to the presidency, the cryptocurrency sector sees an opportunity to change course. Allaire said he “strongly supports” executive intervention by Trump to repeal SAB 121, allowing banks to more easily adopt blockchain-based technologies and stablecoins like USDC.
Circle showed its support for the Trump administration by donating $1 million to the Presidential Inaugural Committee, all of which was donated in USDC. This move highlighted the importance of stablecoins for the future of global financial transactions.
Despite expectations, Trump did not mention cryptocurrencies in his inauguration speech on January 20, focusing instead on topics such as immigration and trade policies.
However, industry observers believe that executive orders favorable to cryptocurrencies may arrive soon, contributing to increased regulatory stability and stimulating investments in digital assets.
Reasons for the cryptocurrency market
The anticipation of Trump’s inauguration has led to significant growth in the cryptocurrency markets. Bitcoin (BTC) reached a new all-time high above $109,000 just before the swearing-in, but underwent a 2% downward correction, trading at around $103,300.
In parallel, cryptocurrency funds recorded significant inflows. According to various statistical data, cryptocurrency-related exchange-traded products (ETP) attracted $2.2 billion in the week preceding the settlement alone, of which $1.9 billion was allocated to Bitcoin ETPs.
Trump’s executive order repealing SAB 121 could mark a turning point for the cryptocurrency industry. Allowing banks to hold digital assets on their balance sheets will not only accelerate the adoption of stablecoins like USDC, but will also increase the confidence of institutional investors.
Jeremy Allaire and other leaders in the cryptocurrency sector see President Trump as a potential ally to promote policies more conducive to financial innovation. Although the details of any executive orders are not yet clear, the support from Circle and other companies underscores hope for a more inclusive future for cryptocurrencies in the global economy.
