• Circle CEO claims that traditional banks will soon begin to use stablecoins

  • Jeremy Allaire, CEO of Circle Pay, one of the largest digital currency companies, commented on the efficiency of stablecoins and their promising future in the US banking system. He compared the stablecoin market’s stability and low risk to that of the traditional banking system.

    “Stablecoins are becoming so large that they will be part of that regulated federal banking system,” Allaire said in an interview with Squawk Box.

    He argued that the stablecoin market is analogous to the current commercial banking system. He emphasized that a dollar deposit into traditional bank accounts provides numerous benefits. These benefits include lending systems, rehypothecation, asset basket accumulation, and, most importantly, the ability to redeem at any time without risk. Furthermore, he compared the benefits of both stablecoins and the fiat banking system. He claimed that when stablecoin joins the regulated federal banking system, these similarities will be incorporated into the same market sphere.

    Stablecoins are risky, but they are democratic.

    Even with stablecoins, he agreed that there is some risk of volatility. However, Allaire believes that this is the “essence of payment systems today.” However, he emphasized that, unlike traditional financial systems, the crypto market requires complete transparency. He also mentioned Circle’s efforts to ensure the stablecoin community has a secure and regulated system. This includes routinely audited consumer protection policies.

    “We have a regulated system that is specifically designed with consumer protection mandates, and companies are bound by and examined by those,” Allaire explained.

    Stablecoins outperform mainstream crypto.

    Circle CEO believes the stablecoin market is a dependable middle ground. It incorporates both the transparency of cryptocurrency and fiat regulations. He used top-tier companies such as Square, Apple, and PayPal as examples to determine the non-profitable customer agreements in mainstream crypto. He also stated that investing in mainstream coins leaves the user financially vulnerable due to high volatility. According to Allaire, there are no guaranteed returns. He argued, however, that people place their trust in a regulated system, which stablecoins have the potential to provide.

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