Goldman Sachs’ Circle CEO Jeremy Allaire Claims All Global Currencies Will Become Cryptocurrencies
Fiat currencies and cryptocurrencies will eventually be the same thing, according to a statement by the CEO of a Goldman Sachs-backed startup.
“Our view is that all fiat currency will be crypto,” said Circle CEO Jeremy Allaire in a statement to CNBC earlier today. “It seems inevitable at this point.”
— CNBC (@CNBC) June 19, 2018
Allaire made the statements while discussing a new project from Circle. Circle wants to introduce a new cryptocurrency pegged to the US dollar. That coin, appropriately enough, will be called USD Coin (USDC). The goal of USD Coin is to bring mainstream financial processes into the world of cryptocurrencies and blockchain technology. It would allow major financial institutions to interact with the crypto industry using the US Dollars they’re familiar with instead of the cryptocurrencies – like BTC and ETH – they’re not familiar with.
Today, Circle’s core product is a blockchain-powered platform where people can send money to one another for free.
Circle also has another popular product where users can invest in cryptocurrencies like bitcoin and Ethereum. Plus, they recently began offering over-the-counter (OTC) trading catered to institutional investors.
The $3 billion company is backed by Goldman Sachs and Chinese internet giant Baidu. Circle made a splash in crypto markets earlier this year for making its first acquisition: Circle purchased popular cryptocurrency exchange Poloniex.
How Does the USD Coin Work?
Obviously, we’ve seen other attempts to launch a USD-pegged cryptocurrency. The USD Tether (USDT), for example, is used by a number of exchanges. Tether faced criticism last year after it was accused of propping up the price of bitcoin to unforeseen levels by printing new USDTs without proving they had the 1:1 reserves to justify the printing.
What makes the USD Coin different? How will the USD Coin succeed in capturing the attention of mainstream financial giants?
The USD Coin is designed to speed up ordinary USD transactions using blockchain technology. The blockchain maintains a continuously growing digital record of transactions, allowing businesses to maintain greater transparency while continuing to use the same currency – at the same value – with which they’re already familiar.
USD Coin is being built within an open source platform called CENTRE.
In the long-term, Circle hopes mainstream financial institutions – or even national banks – use CENTRE to create blockchain-based versions of their national currencies.
In the interview with CNBC, Allaire explained:
“Our focus with fiat stablecoins is we really think of it as a core building block for a crypto native global digital economy,”
“Our interest is in how do we take all of the tasks involved in the financial industry and move those onto a crypto native infrastructure.”
Circle wants to add crypto tokens for the Euro (EUR) and the British Pound (GBP) next.
Ultimately, the market today lacks a good stablecoin. We don’t have a reliable, stable way to interact with the modern financial ecosystem. You can’t accept bitcoin for a service today when the price of bitcoin could rise or fall by 30% within the next few weeks. That’s why a blockchain-based USD proxy could be so useful.
Of course, others – like Tether – have tried. They’ve been somewhat successful – but there’s still plenty of room for improvement, and there’s no widely-acceptable standard across the crypto community. Circle’s USD Coin could be the next big thing.