Circle CEO Jeremy Allaire has warned about the risks facing the crypto market due to exposure to the U.S. Dollar and the regulatory risk in the U.S. financial system.

In a March 23 Twitter thread, Allaire said there “seems to be a large-scale risk-off from USD that is exposed to US banks and US regulatory risk.” The CEO stated that there is general market anxiety revolving around the large-scale failure of the US banking system and the aggressive regulatory actions on crypto.

Allaire added that a macro risk was also driving rotation from USD into flagship digital assets — Bitcoin and Ethereum. The Circle CEO urged U.S. policymakers to be careful about their next steps.

He noted that their actions have started forcing market participants out of the U.S. into poorly regulated jurisdictions with higher risks and lax controls. As such, Allaire said that the current situation calls for a “clear, coherent and pragmatic policy” if the U.S. does want to lose its position as a leader in the blockchain technology space.

He added:“USDC has not missed a beat, we have never failed to mint or redeem USDC for $1, including during the past weeks stress test. As of last week, in the past year, we have redeemed $192.4B USDC at $1, and issued $176.9B at $1.”

The CEO also stated that Circle is adding new transit and settlement banking partners to ensure that it can process issuance and redemptions of digital dollars 24/7 and throughout the year.