Circle President Testifies Before U.S. Congress on Stablecoin and Digital Asset Regulation

ME News reports that on September 2 (UTC+8), according to the Circle blog, Heath Tarbert, President of Circle Internet Group and former Chairman of the CFTC, will testify before the U.S. House Committee on Financial Services. His testimony, titled “Dollar Diplomacy in the Internet Financial System,” reveals that the U.S. dollar’s share of global foreign exchange reserves has declined from over 70% in the late 1990s to approximately 57% today (per IMF data), while the U.S. share of global economic output remains around one-quarter. This gap is sustained primarily by market depth, the availability of safe dollar-denominated assets, network effects, and trust in the U.S. legal system—none of which can be replaced by any payment technology, though digital infrastructure is becoming increasingly indispensable. Tarbert stated in his testimony that approximately 98% of global stablecoin value is denominated in U.S. dollars, and this advantage should be captured and strengthened by U.S.-based issuers regulated under the GENIUS Act, rather than flowing to offshore issuers or foreign sovereign infrastructures. However, he emphasized that stablecoins are merely a “dollar layer,” not the endpoint. If the upper-market structures—including trading venues, custodians, and brokers—for tokenized assets lack clear U.S. legal jurisdiction, the actual rules governing transactions and custody may still be set by foreign jurisdictions, even if assets are dollar-denominated. Regarding forms of monetary carriers, Tarbert noted that central bank digital currencies (CBDCs) could enable inappropriate government surveillance of individual financial activities and undermine community banks; Congress has already legislated against the issuance of retail CBDCs. Tokenized deposits represent individual claims against specific bank assets and differ fundamentally in both legal and economic nature from payment stablecoins. Payment stablecoins, under the GENIUS Act, require identifiable one-to-one reserves, redemption at par value, and public reserve disclosures, making them the most suitable path forward. On implementation progress, Tarbert cited data showing that the combined market size of tokenized U.S. Treasuries and money market products exceeded $16 billion in August, while the stablecoin market reached approximately $317 billion as of April, a year-over-year increase of over 50%. The Office of the Comptroller of the Currency has conditionally approved five national trust bank charters; 175 financial institutions have joined the Circle Payments Network; the CFTC has permitted clients to use USDC for futures margin payments; and the Financial Accounting Standards Board is advancing efforts to classify eligible payment stablecoins as cash equivalents. Tarbert urged Congress to faithfully enforce the GENIUS Act and close regulatory loopholes, while simultaneously advancing bipartisan passage of the CLARITY Act to establish a clear U.S. legal jurisdictional framework for the entire digital asset market structure. (Source: Foresight News)