Circle, a USDC issuer, collaborates with the Central Bank of Ireland to highlight blockchain’s advantages for enhancing consumer protection.
On February 14, Circle forwarded their written advice on how financial regulators might use stablecoins like USDC and EUROC to “promote innovation while guaranteeing the best interests of consumers” by utilizing public blockchains.
In relation to consumer protection, the stablecoin provider listed a number of advantages of blockchain technology, including increased competition, financial service disaggregation, privacy protection, improved financial literacy through transparency, and the ability for regulators to follow on-chain data. Circle made the following announcement on their website:
“Blockchain-based payment systems have the potential to disaggregate the proprietary and closed-loop stores of data that are accumulated by financial services providers and big tech companies that can pose risks to the privacy and security of consumers.”
Circle also offered suggestions for how financial regulators should encourage innovation while safeguarding the interests of customers. The document urged authorities to take part in “crypto-native” activities like examining on-chain data and evaluating digital assets based on their distinctive design while “taking into consideration the varied asset kinds, activities, risks, and incentives,” all of which are “considered.”
Incentives for “firms producing unique financial products” were part of Circle’s proactive strategy for interacting with authorities prior to formal submissions. A “regulatory sandbox” would enable companies that deal in digital assets to collaborate with regulatory and supervisory agencies to test cutting-edge methods and technologies.
Circle stated that the strategy would encourage businesses to interact with authorities and regulators to make sure that individuals who provide financial products act in the best interests of their clients.
