Circle President Testifies Before Congress, Calls for Improved Regulation Framework for Stablecoins and Digital Asset Markets

Foresight News reports that Heath Tarbert, President of Circle Internet Group and former CFTC Chairman, will testify at a hearing of the U.S. House Financial Services Committee, with his testimony titled "The Dollar's Role in Internet Financial Systems." The testimony reveals that the global reserve share of the dollar has decreased from over 70% in the late 1990s to approximately 57% currently (IMF data), while the U.S. economic output accounts for about one-quarter of the global total. This gap is primarily maintained through market depth, the supply of safe dollar assets, network effects, and trust in the U.S. legal system. No payment technology can replace sound fiscal credibility and independent monetary policy, but digital infrastructure is becoming increasingly indispensable.

In his testimony, Tarbert stated that currently about 98% of the value of stablecoins is denominated in dollars. This advantage should be supported and consolidated by U.S. domestic issuers regulated under the GENIUS Act, rather than flowing to offshore issuers or foreign sovereign infrastructures. However, he emphasized that stablecoins are merely a "layer of dollars" and not the endpoint. If the upper market structure for tokenized asset trading venues, custodians, and brokers lacks clear U.S. legal jurisdiction rules, even if assets are dollar-denominated, the actual rules for trading and custody may still be set by foreign countries.

Regarding the form of currency, Tarbert indicated that central bank digital currencies (CBDCs) could lead to inappropriate government insights into personal financial activities and impact community banks, and Congress has legislated to prohibit the issuance of retail CBDCs. Tokenized deposits represent personal claims on specific bank assets and are fundamentally different in legal and economic nature from payment stablecoins. Payment stablecoins under the GENIUS Act require identifiable one-to-one reserves, face value redemption, and public reserve disclosures, which is currently the most appropriate path.

On implementation progress, Tarbert cited data showing that the scale of tokenized government bonds and money market products exceeded $16 billion in August, while the stablecoin market size was approximately $317 billion as of April, a year-on-year increase of over 50%. The Office of the Comptroller of the Currency has conditionally approved five national trust bank charters, and the Circle Payments Network has onboarded 175 financial institutions. The CFTC has allowed clients to use USDC for futures margin, and the Financial Accounting Standards Board is also promoting the inclusion of eligible payment stablecoins in the cash equivalents category. Tarbert urged Congress to faithfully implement the GENIUS Act to close regulatory loopholes and to expedite bipartisan efforts to pass the CLARITY Act to establish a clear U.S. legal jurisdiction framework for the entire digital asset market structure.