In the latest episode of The VALR Podcast, Jeremy Allaire, Co-Founder and CEO of Circle, discussed the future of Circle and the broader digital currency landscape with Farzam Ehsani.
Circle, known for its USDC stablecoin, is expanding its role in the digital economy. Allaire outlined Circle’s three core pillars: blockchain infrastructure, liquidity networks, and developer platforms. These elements form the foundation of Circle’s platform-based business model, facilitating easy integration for developers and institutions.
“We operate a stablecoin network…One piece is the blockchain infrastructure that we build, so the protocols which are the actual stablecoin protocols…Another piece is the liquidity network…And then the third piece is actually our full-on developer platforms,” Allaire explained.
Circle aims to make digital dollars and euros the most liquid and accessible currencies globally. The company is investing heavily in infrastructure to ensure seamless availability across markets. Allaire noted that USDC’s adoption is international, reflecting a broader demand for digital currencies.
“We have an enormous undertaking…to ensure that institutions, wholesale market participants, and then the whole liquidity ecosystem…have the ability to create, redeem, access, and make liquid and available those digital assets,” he said.
The potential for programmable money
Allaire sees programmable, composable digital currencies as a transformative development. He compares their potential to the early days of the internet, predicting significant growth in the volume and utility of stablecoins.
“I believe there’s an opportunity to grow from where we are today…150 billion stablecoin in circulation into the trillions over time, but more importantly, the application utility of that money will be a completely new level of utility that we haven’t before,” Allaire said.
Regarding regulatory clarity, Circle is advancing in regions like Europe and Japan, where laws on stablecoins are established. Circle is the first to issue a legal digital dollar under EU regulations. Allaire views such frameworks as crucial for mainstream adoption.
“USDC is the first and only legal digital dollar under European stablecoin laws…We now have clear laws around stablecoin money as we now do in Japan, as we now do in the entire European Union,” he noted.
CBDCs and future outlook
On Central Bank Digital Currencies (CBDCs), Allaire downplayed their impact on Circle’s business, noting limited political support in the U.S. He views CBDCs as part of broader digital currency innovation, with private-sector stablecoins leading the way.
“In the United States, there’s no effort to build Central Bank digital currency…The public is opposed, Congress is opposed…The priority in the United States…is to build the rules of the road so that the private sector can issue these digital currencies in a safe, transparent, well-regulated manner,” Allaire stated.
He expressed confidence that the 2024 U.S. presidential election will not significantly alter stablecoin regulation, citing bipartisan efforts to establish sound policies.
“A lot of the work for sound, fair policy that will work in terms of keeping jobs, keeping companies in the United States…a lot of that work’s been done very bipartisan…So I think no matter which of these candidates is in the Oval Office, there will be Bills reaching their desk…for crypto markets and stablecoins,” he said.
Circle’s resilience and future plans
Following the collapse of Silicon Valley Bank in early 2023, Circle strengthened its position by partnering with BlackRock to create a secure reserve fund for USDC. Allaire highlighted that 90% of USDC reserves are now held in an SEC-regulated fund, with 10% in cash at globally significant banks.
“We have by far the safest, the most transparent digital dollar product in the world…We’ve evolved to the point that 90% of USDC reserves are held in the Circle Reserve Fund, which is an SEC-registered and supervised government money fund structure…The 10% held in cash is almost entirely held in several global, systemically important banks,” Allaire explained.
Looking ahead, Allaire remains focused on expanding USDC and EURC. He believes that digital dollars will become the preferred currency of the internet, driven by regulatory clarity and global demand.
“We have essentially regionalized the banking infrastructure…so companies and institutions that bank in any of those markets have direct settlement pipes into Circle and the USDC environment,” he said.
In summary, Allaire anticipates a maturing stablecoin market with Circle leading innovation. He is confident that programmable money, global liquidity, and regulatory cooperation will drive the growth of digital currencies.
“I think we’re in the 2003 of the adoption of this technology…The broader adoption and the huge breakout in terms of high utility for society…We’re in a really powerful moment right now,” he concluded.
