Circle, the worlds second largest stablecoin giant, is about to be listed on the New York Stock Exchange and start trading tonight. This is the second largest native US-listed company born in the cryptocurrency industry after Coinbase, the largest cryptocurrency trading platform in the United States in 2021. Four years ago, Coinbases listing ushered in the peak moment of Bitcoin, and four years later, it happened to be the time of a bull-bear cycle of cryptocurrency. Circles listing allowed everyone to see a new narrative of cryptocurrency - stablecoins.
Simply put, stablecoins are the tokenization of the U.S. dollar, and their value is anchored to the U.S. dollar, 1 token = 1 U.S. dollar. For a detailed explanation of stablecoins, please see Regarding stablecoins, the Federal Reserve figured it out 3 years ago .
Stablecoins, and the concept of RWA (real-world asset on-chain) derived from them, have been significantly different from previous years since the beginning of this year. The favorable policies of the US and Hong Kong stablecoins, coupled with the attention of Wall Street represented by Wall Street giant BlackRock to the RWA project, and the current situation of a large number of old money entering the stablecoin, have made the concepts of RWA and stablecoins quickly popular. Circle, which was not so optimistic earlier, has seen its IPO valuation rise again and again, from US$5.4 billion to about US$7 billion now, with the support of BlackRock and Cathie Wood scrambling to buy IPO shares.
The Bitcoin white paper defines Bitcoin as a peer-to-peer electronic cash system. However, Bitcoin has long become a financial commodity, and no one uses Bitcoin for payment. The only thing that can be used in a peer-to-peer electronic cash system is stablecoins, which is the real imagination space for stablecoins.
And Jeremy Allarie, founder of Circle, saw all of this seven years ago.
The following is a summary of Jeremy’s self-narration by BlockBeats.
The Shovel Seller of Web 1.0
In 1990, I started to get in touch with the Internet, and what really piqued my interest was the personal experience of the power of open networks, distributed systems, decentralized architectures, open protocols, and open source software, which I often call the DNA of the Internet.
During that time, I was also paying attention to the disintegration of the Soviet Union. I was deeply shocked by this structural change. At the same time, I began to delve into technology and became more and more convinced that the Internet would change the world.
In 1994, the first graphical web browser technology came out. At that time, I suddenly realized that we finally had a kind of software that could display content, applications, and various things on the web page, which gave birth to the concept of Web as an application platform.
So, my brother and I and some friends founded Allaire and launched ColdFusion, the first commercial web programming language.
Although there was Perl at the time, and some people would use C language to write dynamic page logic on web servers, ColdFusion really made web application development simple and easy to use - as long as you had an idea and about a thousand dollars, you could use it to make a web application that could be used interactively in a browser.
In 1995, this was a big breakthrough. With the rise of websites, e-commerce, and online content, we caught the wave. Allaire also developed a whole set of tools, and millions of developers around the world use our software.
As the market continued to mature, we successfully listed the company in early 1999.
We were a bit different at the time because we were profitable when we went public - that was during the Internet bubble, and most companies were loss-making when they went public. But we were more like the shovel seller in the Internet 1.0 era, providing basic tools for the entire industry.
After going public, we merged with Macromedia, which was also a giant in building Internet and content development tools at the time. I became the CTO of the new company after the merger and began to promote the application of Flash. It was a very powerful software at the time that enabled web pages to achieve more complex multimedia presentation and interactive experience.
The ‘Couch Political Economist’ Falls Down the Crypto Rabbit Hole
Back to my initial exposure to the Internet, I was originally studying international political economy, focusing on the comparison of various economic and political systems, and was very interested in macro issues such as the international economic system. Then I became excited about the Internet and was deeply attracted by the changes in information transmission and software distribution brought about by these open networks.
During the Macromedia era, as early as March 2002 (yes, 2002, not 2022), we added the ability to play seamless videos in Flash Player, making video playback ubiquitous on the Internet.
For the first time, anyone could easily embed video into a browser. The explosion of YouTube was built on this technology - which was originally based on Flash Player.
Later, I founded another company called Brightcove. Brightcoves philosophy is still based on the underlying genes of the Internet: open network, open protocol, and distributed system.
My idea at the time was - could any company, any media organization, publish video and TV content directly on the Internet? Remember, this was 2004, broadband and Wi-Fi were just beginning, and there were no smartphones, but people were already talking about the future of connected devices.
One thing that is very clear is that I can see that in the future there will be a large number of connected devices, with Wi-Fi and mobile broadband, and video transmission will be completely liberated.
So we built an online video distribution system - which can be understood as an online TV platform.
This is an extension of the Internets capabilities: what people imagined in Web 1.0 has become increasingly rich and real, and has finally come true in the Web 2.0 era. Brightcoves business has also been very successful, and it was finally successfully listed in early 2012.
Why did you start Circle?
When the 2008 financial crisis occurred, it triggered my early academic thinking. I became a political economist on the couch, reading a lot about the nature of money, central banks, the international monetary system, and the fractional reserve system. I was thinking, Whats going on? I also started to think about whether there is a better monetary system? Is there a better way to build an international financial system?
Of course, this wasn’t something where you woke up and said, “I’m going to start a company that disrupts the global monetary system.” This was 2009, 2010, and there was no realistic path to do this, but I was just digging into it.
But in 2012, shortly after Brightcove went public, I was introduced to cryptocurrency and I went down the rabbit hole.
Jeremy Allarie at Brightcove
I come from a technical and product background. After entering this field from a technical perspective, I saw some shocking things: this is a real technological breakthrough.
There were computer science problems being solved, and the solutions were powerful. For the first time, I synced up the Bitcoin blockchain on my laptop and completed a peer-to-peer transaction with it — directly on the Internet, using an open protocol. That moment was like the first time the Mosaic browser opened a web page — I thought, “Oh my god, this is the real missing infrastructure of the Internet!”
Next, my co-founder and I dug deeper and deeper, especially in the technical community at the time, where we came across a lot of people discussing:
In addition to Bitcoin, can other types of digital assets be issued on this type of network? Today we call them tokens or digital assets. I have worked on virtual machines and programming language development before, so it was natural for me to participate in the discussion:
How to make these digital assets programmable?
How to realize programmable currency?
How to build a smart contract?
At that time, these things were just ideas on napkins, and some white papers had just appeared, but we knew very clearly that these would be realized, it was just a matter of time.
So we combined all of these ideas with another question: How do we build a more secure and open financial system? These thoughts converged and became the only thing on my mind, and I became almost obsessed with it, and finally decided to start Circle.
Our original intention was to create a protocol similar to HTTP for money? Can we create an open Internet protocol for the US dollar? This protocol is open, programmable, and so on.
This is what we envisioned ten years ago, and now it has become a reality and has become a real killer application in the crypto space. Although it took a long time to build this system, it has now reached a considerable scale, although it is still in its early stages.
The rise of USDC
In the spring of 2018, the crypto market experienced a sharp correction, and then the entire industry fell into a severe winter, with almost the entire market falling sharply. Our products that were originally able to generate revenue and profits at the time either barely broke even or began to lose money, so we began to burn money at a very fast rate.
By 2019, at the height of that cold winter, financing had become extremely difficult. At the same time, our operating costs were out of control and we were running out of cash—if we didn’t take action, we would face bankruptcy.
It was also at this time that we officially launched USDC in October 2018.
A big gamble
In 2019, DeFi protocols began to integrate USDC on a large scale, and early PMFs appeared in the market. Although the market was still volatile at that time, Ethereum was technically mature enough to truly support these use cases. With MetaMask and other related products, developers can finally start to really use these tools.
Although the transaction volume was still small at the time, the developer communitys acceptance of USDC was very high. We saw this and realized that this was the original vision of our company, this is our core, and this is what we really want to do.
So, in a very short period of time, we quickly sold three businesses - the Poloniex exchange, the Circle Trade over-the-counter business, and the Circle Invest product for retail investors, while also shutting down and liquidating the payment application we had launched.
By selling these assets, we obtained the funds we needed urgently and completely reorganized the company. Some employees were transferred to these divested businesses, and the company as a whole was drastically adjusted.
By the fall of 2019, we were on the verge of bankruptcy again, but at the same time, USDC began to show early vitality in the market. So we made a decision - to bet all on USDC, and we decided to put all our energy into it, build a complete platform around it, and promote its widespread adoption.
This was a decision that was equivalent to a big bet on the company. At that time, USDC itself had not brought in any income, and even the entire company had almost no income. But I firmly believed at the time that the era of stablecoins had arrived, and they would eventually become a core component of the global monetary system, and stablecoins were the most suitable monetary architecture in the Internet era.
We had the right product at the time, and as long as we persisted, we would definitely find the right path and create something valuable. So we did our best to promote it.
This was the first real major challenge in the development of USDC. Although we had encountered many difficulties before, this moment was a critical moment for the entire company. Although USDC had early growth momentum at that time, it was not enough to support a scaled company.
We shifted all of our company’s resources to USDC and put all our money on it. I remember very clearly that we officially announced this strategy in January 2020, when the homepage of Circle’s official website was completely revamped into a huge billboard that said “Stablecoins are the future of the international financial system.” The only action button on the page was: “Get USDC.” All other features were removed.
Then on March 10, 2020, we released the Circle platform upgrade, comprehensively upgraded the USDC account system, and launched a whole set of new APIs to facilitate developers to seamlessly connect banks, bank cards and other payment systems to realize USDC deposit and withdrawal operations. The entire platform is built around USDC.
Just three days later, on March 13, the world went into lockdown due to the coronavirus pandemic. Interestingly, USDC had already started growing in February 2020, before our official launch. I think this is because users in the Asian market have realized the severity of the pandemic and started to react in advance.
During that period, a very complex interweaving phenomenon occurred: many people began to transfer funds into digital dollars out of distrust of their own financial systems; at the same time, governments around the world also successively introduced large-scale emergency stimulus policies, trying to inject liquidity into the market to prevent the economy from falling into a Great Depression.
So you have this highly coordinated, super-easy policy happening around the world, which is causing a lot of money to flood into the market. People are sitting at home with their government subsidy checks and starting to think, What am I going to do with this money?
During that period, the world also experienced a major turning point - the digitalization process of the entire society suddenly accelerated.
The concept of the metaverse became popular at that time, and people all went online overnight. All digital products experienced explosive growth. From Zoom (which almost became a representative company of that period), to Peloton for home fitness, to e-commerce, online retail, digital payment, and online markets - almost every digital industry experienced a five-year growth acceleration at that stage.
At the same time, the adoption of blockchain technology and the digital asset market have also entered an explosive phase.
The summer of 2020 is known as the Summer of DeFi, and USDCs circulation has soared from US$400 million at the beginning of 2020 to US$40 billion within a year, which can be said to be a drastic and explosive growth.
Stablecoin market value growth curve
Prerequisites for the Popularization of Stablecoins
Over the years, and even just a year or two ago, people have often asked, “How can this thing achieve real mass adoption?” And my answer in the past has always been: we need to solve three key problems. Of course, the “we” here does not only refer to Circle, but the entire industry, and we need everyone to work together to promote it.
The first problem is infrastructure, that is, the blockchain network itself.
My thinking model for blockchain networks is that they are like the operating system of the Internet. What we need is an operating system-type blockchain network with higher performance and higher throughput. In the past few years, great progress has been made in this regard. We have now entered the era of the third generation of blockchain networks - that is, high-performance Layer 1 public chains and Layer 2 extended networks.
This means that higher transaction throughput can be achieved, and the cost of a single transaction is extremely low, possibly less than a penny or even less than a cent.
Coinbase CEO Brian Armstrong also said before that transaction time is less than one second and cost is less than one cent, and now we have basically achieved this state. The progress of these high-performance networks is also driving the growth of the entire ecosystem. Because you reduce unit costs and marginal costs, while increasing transaction speeds - this is like going from the dial-up era to broadband Internet, and the transition from Web1.0 to Web2.0.
The second issue is the network effect. Stablecoins like USDC are actually a kind of network product platform, and developers will build applications based on it. The more applications that are connected, the more practical the entire network will be. The more users have stablecoins, the greater the utility of the network will be, which will form a positive cycle.
At a certain stage, developers will even realize that if the product I make does not support USDC, then I may have fallen behind in the competition. So when the infrastructure upgrade is completed, this network effect between users and developers will really start to play a role.
Next is the third issue, which is also the so-called usability improvement, which is actually closely related to infrastructure upgrades. I still remember that two or three years ago, if you wanted to use stablecoins, you had to go to a certain platform to buy it, then install a browser plug-in wallet, and in order to use the wallet, you had to buy Ethereum first, pay expensive handling fees, and then transfer ETH to your own self-custodial wallet. The whole process took seven or eight minutes, and it was very troublesome. The whole process can be said to be completely unreasonable.
At that time, if someone said, Who would want to use this thing? It would be completely understandable.
But now you can enter the wallet system directly through the web interface or mobile app. The whole experience is just like registering for WhatsApp. You may only need a mobile phone number, a facial recognition or biometric code. There is no need to remember mnemonics or deal with a bunch of complicated settings.
All these changes combined are creating a favorable usage environment, making stablecoins easier to accept and use.
The final hurdle is government regulation.
What is most exciting is that now around the world, from Japan, Hong Kong, China, Singapore, to the whole of Europe, the United Kingdom, the United Arab Emirates, and the United States, almost all major jurisdictions are introducing relevant laws to clearly define stablecoins as legal electronic currencies and incorporate them into the formal financial system.
Once these laws are in place, the use of stablecoins will expand from early crypto natives to the wider general population. So we think it is likely that by the end of 2025, stablecoins will become a widely legally integrated part of the global financial system.
Of course, we must also be aware that all of this is still in a very early stage. You can use Geoffrey Moores Crossing the Chasm theory to look at the current situation: we are in the process of jumping over the chasm in the air, and we havent really landed yet, and we may still fail or fall. But I believe we will jump over it.
We can see that more and more institutions, which I call “FinTech-friendly banks” or “neobanks”, are starting to natively support the use of stablecoins, such as NuBank in Latin America, Revolut in Europe, or brokerage apps like Robinhood.
Of course, this also includes those large crypto companies, such as Coinbase and Binance, which have more than 400 million users in total. To some extent, they have actually become financial super applications: you can deposit balances, receive wages, bind cards for consumption, and the process of obtaining and using USDC has become very smooth.
We are indeed seeing a trend where people are starting to use the “dollar” as a unit of store of value, but its underlying form is actually USDC.
And now we are already working with Visa and MasterCard. They both have projects that allow card issuers to issue a card that looks like a Visa or MasterCard on the surface, but actually uses stablecoins, such as USDC, for consumption.
This model has emerged in emerging markets, where users get a physical or virtual card through a new bank-style digital wallet app, which is tied to their stablecoin balance. Because many people want to hold US dollars, these cards allow them to continue spending in traditional card networks, but the backend clearing method has become USDC.
Even for these card issuers, the clearing funds they pay to Visa or MasterCard can now be done directly through USDC. In other words, USDC has actually been used as a clearing channel between financial institutions and card networks, which is very interesting in itself.
At the same time, we also see some changes happening on the other side - merchant acquirers are also starting to get involved. Companies like Worldpay, Checkout.com, Nuvei, and Stripe are providing merchants with the option of settling in USDC.
Earlier this year, we saw a very cool example: Stripe co-founder John Collison made a finale announcement at their annual conference, as in previous years. His original words were: Crypto is back, but this time its not Bitcoin, its USDC, a stablecoin.
He demonstrated the new features of Stripe Checkout on the spot - this product allows merchants to embed Stripes payment portal directly into their own websites or apps. In the demonstration, USDC was displayed alongside credit cards as a payment method, and merchants could choose to receive USDC.
Collison excitedly demonstrated the entire process on stage and said: This is what payment should look like. In the demonstration, they used the Solana network, the settlement was real-time, and the transaction fees were very low.
As the legal status of stablecoins becomes increasingly clear, more and more financial institutions will view them as the basic clearing layer.
For example, a merchant might say: I am willing to accept USDC because I can receive the money immediately and save on transaction fees, which is a better choice for me.
On the user side, more and more types of terminal products are emerging - whether it is traditional banks, emerging digital banks, or crypto super apps, they are all creating a seamless experience that allows users to complete payments by simply scanning a QR code.
Another big thing I mentioned on Twitter earlier this year: iOS has begun to open NFC to third-party wallets. This means that Web3 wallets may support tap to pay in the future, and users can directly use the wallet with USDC in their mobile phones to complete payments at physical merchant terminals.
Of course, achieving this requires cooperation from multiple parties, such as payment processors and acquirers to support on-chain transactions, wallet developers to integrate NFC functions into their products, and Apples approval.
However, these are already in the planning stage, and we expect to see larger-scale implementation in 2025. This is indeed an exciting development.
The policy environment is constantly favorable
Circle’s philosophy from day one was to stand at the intersection between the traditional financial system and the new world of blockchain. To achieve this, the U.S. government had already made clear its legal position as early as March 2013:
If you are a company that connects the banking system to the virtual currency world, you are considered a money transmitter and must register with the federal government, have a comprehensive anti-money laundering program, and apply for a license in every state that has relevant legal requirements.
We were the first company in the crypto industry to get a full set of regulatory licenses from the start. We were the first crypto company to get an Electronic Money Institution (EMI) license in Europe, and the first company to get the so-called BitLicense in New York - the first regulatory license specifically for the crypto industry. For nearly a year after that, we were the only one holding this license.
We always adhere to the concept of regulatory priority and always choose to take the front door route to ensure that we have a good and robust compliance system. By the way, it is precisely because of such a compliance foundation that we can achieve another key goal: liquidity.
What is liquidity? It means that you can actually create and redeem stablecoins, you can connect to a real bank account, and use fiat currency to buy and redeem stablecoins. If you are a shady offshore company, no one will open a bank account for you, then you cant do this at all. You dont even know where your bank is.
We are the first company to establish high-quality banking partnerships and introduce strategic partners like Coinbase to distribute USDC on a large scale on the retail side, so that any ordinary user with a bank account can easily buy and redeem USDC. We also provide institutional-grade services. In other words, from transparency, compliance, regulatory framework, to actual liquidity, we have done it all.
In terms of technological innovation, we have also been exploring what else the protocol itself can do. We regard USDC as a stablecoin network protocol and have been thinking about how to work with developers to promote its integration and application. These basic principles are the fundamental reason why we can get to where we are today, and we are still building them, not just for the US market.
In terms of payment stablecoins, the United States has actually done a lot of work. The Payment Stablecoin Act is quite mature in my opinion. It has bipartisan support in the House of Representatives and the leadership of the Senate is also actively involved. We have also seen a high level of attention from the government level, including the White House, the Treasury Department and the Federal Reserve. This issue has been listed as one of the governments priorities for several years.
(Translators note: On May 19, the U.S. Senate passed the procedural vote of the United States Stablecoin Innovation Guidance and Establishment Act of 2025 (GENIUS Act) by 66:32, attempting to provide federal regulation for dollar-pegged stablecoins)
Many key issues, such as how to ensure financial safety and soundness while supporting private innovation, how the Federal Reserve should play a central role (establishing standards for US dollar stablecoins), and how to provide a path for state issuers and regulators, similar to the current dual-track banking system - you can be a state-chartered bank or a federally chartered bank - are actually being promoted.
The financial system itself is a highly regulated industry, the energy system is highly regulated, the transportation system is highly regulated, the aerospace system is highly regulated, and pharmaceutical production is also highly regulated. In fact, most of the key technologies or infrastructure in society are under intensive supervision.
The software industry may be an exception in the past 30 years, which has almost no regulation. But now if you are doing something really big and cutting-edge, such as artificial intelligence, hardware combined with autonomous driving, or you are building a global digital currency system - these areas have begun to intersect with those traditional highly regulated industries, and they have great potential impact on society, so it is reasonable to be regulated in this case.
I don’t think that “innovation should not be regulated”. If something becomes extremely important to society as a whole, it needs a contractual spirit and social responsibility framework to match it, which is a real system. There are light and heavy regulations - for example, global systemically important banks (G-SIBs) are much more regulated than a local community bank.
So if what we do becomes systemically important in the future, then not only will the relationship with the US government change, but the relationship with other governments will also change. Of course, these are things in the distant future, not at the moment.
What we are really focusing on now is how to realize our vision of the Internet financial system and how to make open, programmable, and composable currency a reality. We hope that this innovation can be truly implemented rather than being stifled. To achieve this, policymakers and governments actually need to give more freedom to innovation - just as the Internet has been given in other fields.
Circle’s Business Model
I believe Circle is one of the most transparent financial institutions in history. If you look at a bank, an insurance company, or any other type of financial institution, they don’t disclose how their products are performing in real time, nor do they disclose basic data about their balance sheet every day, which is what we do.
How is this done? First, when we receive USD, before minting USDC, these USD are pre-deposited into a reserve account. These reserve funds are segregated accounts set up for the benefit of customers in accordance with legal requirements. Legal and regulatory requirements require us to segregate these funds, and only after the segregation is completed can electronic currency instruments be issued, and the ownership of the funds belongs to the customer. Therefore, from law, regulation to actual operation, we strictly comply.
How to ensure the safety of reserves
So, what do these reserves consist of? Now the reserves are mainly divided into two parts:
Currently, about 90% of the reserves are in an account called the Circle Reserve Fund. This is very important. We want anyone who wants to understand USDC to be able to clearly see the composition of these reserves in a regulated structure. Therefore, we have partnered with BlackRock, the worlds largest asset management company, to set up the Circle Reserve Fund.
This fund is essentially a government bond fund, which can also be understood as a government money market fund, whose sole purpose is to hold USDC reserve assets. It is issued in the form of securities, regulated by the U.S. Securities and Exchange Commission, and has independent audits and an independent board of directors.
All the assets of the fund are completely transparent to the public and updated daily. If you search for USDC online, you can enter the BlackRock official website and clearly see the face value, purchase time and maturity date of each treasury bond. All treasury bonds have a maturity period of less than 90 days and are extremely liquid and price-stable US dollar assets.
There are also assets in the form of overnight Treasury bond repurchases, which are guaranteed by the worlds largest systemically important banks (G-SIBs), which are essentially equivalent to Treasury bond assets.
Therefore, every component of this reserve structure is visible and transparent. Anyone familiar with market liquidity and financial assets will tell you: If we need to redeem all assets within 24 hours, it is completely possible.
The remaining 10% of the reserves are basically in the form of cash in several global systemically important banks, also known as too big to fail banks. There are about 50 such banks in the world, such as JPMorgan. We have publicly disclosed some of the partner banks. These banks actually enjoy implicit government endorsement due to their large size and solid reputation.
In addition, we have built a global infrastructure to support institutional clients in the creation and redemption of USDC. We are able to do this because we are a regulated company. Banks and regulators around the world are willing to allow us to operate in their local markets.
We have currently obtained regulatory licenses in Singapore and Europe, and are also working with Japan and other places to establish compliant distribution channels, which means that institutions can open accounts and create or redeem USDC in the Singapore banking system, Hong Kong banking system, Brazilian banking system, US banking system and European banking system.
That is to say, as long as you have a bank account in these countries or regions, whether you are an individual or an institution, you can create and redeem USDC, and the flow of funds will directly enter the aforementioned reserve structure.
So, from the operational level of the local banking system, you have the liquidity to create and redeem; from the perspective of the underlying reserve assets, you have the most liquid and stable asset support in the world; at the same time, there is also a reserve fund structure that is registered by the public and disclosed daily, superimposed with the regulatory mechanism of global regulators.
Circle’s Future Plans
You should remember that before the iPhone came out, there were about 17 different mobile operating systems on the market: Symbian, Windows Phone, Palm, BlackBerry, and NTT Docomos systems - all kinds of them, and each company was attracting developers, competing to use their own mobile phone systems, and distributing them.
To be honest, they were terrible, they didnt work. You went to Mobile World Congress and there were a bunch of people showing off their Symbian stuff and it was garbage.
So what I want to say is, to some extent, how to ensure the safety of reserves - although these systems are very advanced in terms of architecture, in fact, the user experience is very poor.
They are more like a set of operating systems, competing for ecology, developer resources, functional friendliness, etc. But I want to be very clear: we have not yet ushered in the iPhone moment of blockchain.
What we really need is a world where blockchain networks do more than just carry financial transactions.
It should also support social networking, games, content, intellectual property, AI data traceability, AI agent transaction flows, retail-scale applications, digital tokens for the general public, and so on—but none of these can be done now. The throughput is not enough, the system cannot support it, and the infrastructure is not scalable.
In the long run, what we need is a network that can process millions of transactions per second, which is an achievable goal. At the same time, the development experience of software engineers and user experience are still in their early stages.
I look back at my experience in platform software, developer tools, and user experience and feel like we’re not quite there yet. I agree — we’re very close.
But even if we do have a “click-and-go” blockchain platform, I think there will be new layers and more networks on top of it.
You can foresee that there will be a period of time when the following situation will occur: for example, if you are a large Internet company in Asia with 500 million users, and you now want to introduce digital tokens, stablecoins, and smart contracts to these users, once you open them up for use, all the current infrastructure on the market will collapse directly - it simply cannot carry such a large amount of traffic.
But you can imagine that one day, this model will evolve like AWSs Virtual Private Cloud (VPC), and a type of dedicated blockchain will emerge, forming a network model of chain-to-chain interconnection to support large-scale expansion. This will essentially bring more fragmentation, but it also means the development of more infrastructure.
As Circle, our goal is to ensure that stablecoin network protocols such as USDC, EURC, CCTP (Cross-Chain Transfer Protocol), and gas fee abstraction can be easily called in these environments - for users and developers, there is no need to worry about the complexity behind it.
So whether we support 15 chains or 50 chains in the future, I can’t tell you the specific number, but one thing is certain: we will continue to expand, deploy and release stablecoin infrastructure to support more blockchain networks.
As for when the iPhone moment will actually arrive, or when it will enter the stage of diminishing marginal returns, I dont know.
Speaking of currencies, we have already launched USDC and EURC. I can’t say that we will definitely issue more currencies in the future, but what is certain is that globally, whether in emerging markets or developed countries, stablecoin regulations are gradually being implemented, and we are also seeing more and more high-quality stablecoin projects coming online.
I think by 2025, you will see more and more stablecoins such as Mexican Peso, Japanese Yen, Australian Dollar, British Pound, etc. We at Circle do not need to be the issuer of all these currencies. What we really need is a compliant and high-quality local team to issue these stablecoins using the infrastructure we have built, so as to achieve good cross-currency interoperability and allow applications to be easily accessed and used between different currencies.
The issuance of each currency is very complicated, involving a large number of legal and regulatory issues, and also considering the preferences of the local central bank, market acceptance, etc.
We will also evaluate the market size, such as how big the market for this currency is, which is also the point we mentioned earlier.
We sincerely believe that in this Internet financial system era, the status of the US dollar will only become more and more important, and the US dollar stablecoin (USDC) will be the core of it. So our main focus will definitely still be on this.
At the same time, of course, we also want to open up entry and exit and establish interconnections in different markets around the world. We will continue to promote this and we are very happy to see the development of other projects.
But from a business or ecosystem perspective, we dont think we have to do all of these non-dollar currencies ourselves.
From the perspective of monetary theory - whether from the perspective of the central bank or from the perspective of commercial banks - there is actually a concept called neutral interest rate. This interest rate is neither loose nor tight.
We experienced a long period of zero interest rate lower bound after the 2008 financial crisis, accompanied by the monetization of government debt to hedge against the crisis. Later, as inflation soared, the central bank responded with strong tightening. Interest rate policy is actually such a cyclical cycle.
But whether it is the nominal interest rate or the neutral interest rate, it essentially fluctuates around a target range. Some economists now believe that the neutral interest rate may be around 2.75% to 3% - this level will neither suppress the economy nor over-stimulate it.
Therefore, whether you are a central bank or a bank, high interest rates do not mean good. Of course, banks or institutions like us may benefit from the increase in interest income from reserve assets on their books, but overall, this environment is tight - economic activity is reduced, the velocity of capital flows is reduced, capital investment is slowing down, and risk appetite is reduced.
When interest rates fall, it is true that the interest income from our reserve assets will also fall, which is an objective fact. But at the same time, funds become cheaper, liquidity increases, capital investment increases, and economic operations accelerate - this is good for the venture capital market, the real economy, and entrepreneurial activities. And these will in turn promote the use and growth of stablecoins.
We have experienced easing cycles and tightening cycles. The next cycle may be a milder one, which we cannot predict. But we always believe that:
On the one hand, there are macroeconomic forces at work, which are beyond our control, such as the direction of the global economy and central bank decisions;
But on the other hand, we have built a platform network ourselves, with a user growth flywheel and a developer ecosystem flywheel. We are creating a highly practical form of digital currency and a powerful development platform - the system itself has an inherent growth logic.
Today, the total market size of legal electronic currency in the world is over $100 trillion. I think a subset of it - the stablecoin market represented by the US dollar stablecoin and the euro stablecoin - will continue to expand, regardless of whether interest rates are high or low.
What we see now is that the total size of the entire stablecoin is only 160 billion US dollars (now over 200 billion), accounting for only 0.16%. This is obviously still a very early stage.
If you agree with how Internet-level utility has reshaped media, communications, travel, and software distribution, then you will also believe that this new form of Internet currency may be equally transformative in the future.
If all goes well, perhaps in the next 10 to 20 years, we can see 10% of the worlds currencies become stablecoins. This doesnt sound exaggerated - because it takes more than a decade or even decades for Internet products to achieve a 10% penetration rate, but it will indeed change the world.
We hope Circle can be an important player in this change.
