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Date
2024-08-14
Circle CEO Allaire: Stablecoins to Expand Trillions in Next Decade, Key to Global Finance
Jeremy Allaire, in an interview with CoinDesk, stated that although USDC is popular in developed markets, it has also seen significant growth among fintech companies in emerging regions and brokers that serve businesses and households. Circle's CEO, Jeremy Allaire, predicted that stablecoins could account for 5%-10% of the global money supply over the next decade. Allaire indicated that the next year will be crucial for stablecoin regulation, with expectations that the G20 group and many emerging market countries will establish relevant laws by the end of 2025. Jeremy Allaire, CEO of Circle, the company behind the USDC and EURC stablecoins, said in an interview with CoinDesk that as digital currencies take up a larger share of the global financial system, the stablecoin market could grow to between $5 trillion and $10 trillion within a decade. Allaire expects that, as the technology spreads like previous internet-based innovations such as video streaming and online shopping, stablecoins—a type of cryptocurrency whose value is pegged to traditional currencies like the US dollar or the euro—will account for 5% to 10% of the $100 trillion global money supply in the next decade. "We are in the early stages of stablecoin adoption, but over the next 10 to 20 years, this technology will become a part of the global financial system," he said. Stablecoins are one of the most popular innovations in the cryptocurrency sector, bridging government-issued fiat currencies on traditional financial rails with blockchain-based digital assets to facilitate transactions. Overall, the market capitalization of all stablecoins is approximately $170 billion. Due to their non-volatility, combined with the speed of blockchain and near-instant settlement, they are increasingly used for daily economic activities such as payments and remittances, especially in developing countries with less robust banking systems and rapidly depreciating local currencies, such as Argentina and Nigeria. Circle's USDC token is the second-largest stablecoin in the market, with a market capitalization that has grown to $35 billion since its launch six years ago in partnership with cryptocurrency exchange giant Coinbase. Its larger competitor, Tether's USDT, has a market capitalization of $120 billion. Market observers attribute Tether's faster growth partly to its focus on emerging regions with limited dollar access, while Circle focuses on developed and heavily regulated markets like the United States and the European Union. However, Allaire stated that he has seen a significant increase in USDC usage in emerging markets such as Latin America and Southeast Asia, especially among fintech companies that serve local businesses and households. Allaire mentioned one "cool example" as an increasing number of local foreign exchange brokers specializing in cross-border payments and currency exchange, using USDC to settle transactions between small and medium-sized enterprises. Another example is an anecdote shared by one of Circle's partners with Allaire, who recounted a "multi-billion dollar energy order between a Middle Eastern supplier and an African buyer," facilitated by USDC.Here is the translation of the provided text into English:
Another example of the increasing adoption of USDC as a payment tool is the reintroduction of USDC transactions by U.S. fintech company Stripe for merchants in October this year. Stripe Product Manager Jennifer Lee posted on X, stating that within the first 24 hours, users from 70 countries chose the USDC payment option.
"Every week, a new company is using USDC, and they don't even have to strike a deal with us to build and use Circle's products," he said. "The beauty of what we've built is that it's an open, public infrastructure for digital dollars on the internet."
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Global Stablecoin Regulations
"Circle is focused on building highly transparent and compliant financial infrastructure, and we believe becoming a public company will strengthen this trust and sense of responsibility," he said.
It's not just in the United States. Allaire stated that regulating stablecoins is a global priority, and next year will be crucial.
"Most major financial centers have established stablecoin laws, which are either already in place or being negotiated or legislated," he said. "By the end of 2025, a significant number of G20 countries and many emerging markets will have implemented stablecoin regulations."