Circle CEO testifies before Congress, calls for improved regulatory framework for stablecoins and digital assets

Heath Tarbert, President of Circle Internet Group and former CFTC Chairman, testified at a U.S. House Financial Services Committee hearing, with testimony titled “A Dollar Governance Strategy for the Internet Financial System.” He noted that the dollar’s share of global reserves has fallen from over 70% in the late 1990s to about 57% (IMF), and that about 98% of stablecoins are denominated in dollars. He advocated that U.S.-based issuers regulated by the GENIUS Act should assume and consolidate this advantage to prevent it from flowing to offshore issuers or other countries’ sovereign infrastructures. Tarbert warned that if higher-layer market structures such as trading venues, custodians, and brokers lack clear U.S. legal jurisdictional rules, then even if assets are dollar-denominated, the actual rules for trading and custody could still be set by other countries. He stated that central bank digital currencies could bring improper insights into individuals’ finances and disrupt community banks, and that Congress has legislated to prohibit the issuance of retail CBDC; he also distinguished the legal and economic natures of tokenized deposits and payment stablecoins. Tarbert cited data saying that the size of tokenized treasuries and money market products exceeded $16 billion in August, and that the stablecoin market was about $317 billion as of April (year-over-year growth exceeding 50%); he also mentioned that the OCC has conditionally approved five national trust bank charters, Circle Payments Network has 175 financial institutions onboard, the CFTC allows USDC to be posted as futures margin, and FASB is pushing to include qualified payment stablecoins as cash equivalents. Finally, he called on Congress to faithfully implement the GENIUS Act to plug regulatory loopholes, and for bipartisan advancement of the CLARITY Act to establish a U.S. legal jurisdictional framework.