Davos Consensus Emerges: Payment Stablecoins Defined as Payment-Grade Cash Instruments, Circle CEO Proposes "New Physics of Money"

Odaily News During the Davos Forum, stablecoins became a hot topic. Industry insiders generally believe that stablecoins have the potential to reshape the global payment system, but their associated risks should not be overlooked. Jeremy Allaire, Co-founder and CEO of Circle, stated that under regulatory frameworks such as those in the US and EU, payment stablecoins are clearly defined as "cash instruments" for payment and settlement. Therefore, issuers must not pay interest to holders, a design he personally supports. Regarding some stablecoin projects subsidizing users through "rewards," Jeremy Allaire believes concerns within the banking industry about "deposits being drained and credit drying up" are overly amplified. He pointed out that historically, the rise of money market funds did not cause substantial damage to the banking credit system. Furthermore, Jeremy Allaire introduced the concept of the "New Physics of Money," arguing that stablecoins significantly enhance capital flow efficiency and monetary velocity. In the future, society may require a much smaller monetary base to support large-scale economic activities. He also predicted that within the next 3 to 5 years, billions of AI agents will participate in the operation of the economic system. (Caixin)