The issuer of the USDC stablecoin, Circle, has submitted a response to the Central Bank of Ireland’s Consumer Protection Code Review, highlighting the benefits of public blockchains and digital currencies, such as increased competition, broader choice, and enhanced transparency, and privacy, for consumers.

Circle stated in the announcement:

“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 recommends that financial supervisors support innovation while ensuring consumers’ best interests. This includes incentivizing firms to engage with supervisory authorities and creating a regulatory sandbox for digital asset firms to test new technologies.

A "regulatory sandbox" would enable digital assets firms to collaborate with regulatory and supervisory authorities in testing innovative technologies and approaches. This approach, according to Circle, could encourage firms to be more open to working with authorities and regulators to ensure that those providing financial products are acting in the best interests of their customers.

The company also suggests that financial regulators take a more active role in informing consumers about market abuse by tracking and analyzing blockchain transaction data in real-time. Circle recommends that regulators issue public opinions on projects and market activity in real-time to ensure consumers are informed and protected.

The response highlights the benefits of public blockchains, which can disaggregate the vertical integration of products and promote competition. This allows users to seamlessly switch between services competing at every layer of the stack. Public blockchains are also more open, interoperable, and competitive than closed payment networks, which can pose risks to consumer privacy and security.

Circle also recommends that firms offering novel financial products engage with supervisory authorities before submitting a formal application. The company suggests that productive exchange between regulators and potentially supervised entities should be strongly encouraged. Circle believes that the enhancements proposed by the Central Bank of Ireland to its Innovation Hub will be a vital and important component for regulators to gain insight into new products and services.

Finally, Circle suggests that blockchain-based payment systems can be safer than traditional financial services, as data about the services is open and publicly examinable by default. This allows members of the public, commercial firms, and regulators to examine financial activity and proactively identify warning signs or wrongdoing.

An announcement from Circle posted to its website stated;