50 - Crypto-Dollars, Regulation, and DeFi | Jeremy Allaire

Feb 1, 2021

Jeremy Allaire, Co-founder and CEO of Circle, dives into the world of stablecoins, focusing on USDC's role in decentralized finance. He discusses the rapid evolution of stablecoins and their potential to reshape traditional banking. Allaire argues for a full-reserve money system inspired by Austrian Economics and highlights the importance of regulatory collaboration in the crypto sector. The conversation also touches on the transformative possibilities of DeFi amidst economic pressures and the future of crypto dollars in enhancing financial access.

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INSIGHT

Circle, Coinbase, and USDC

Circle and Coinbase co-founded the Centre Consortium, which governs the USDC stablecoin.
This consortium model promotes credible neutrality and scalability for USDC.

ANECDOTE

USDC and the Pandemic

The growth of stablecoins, particularly USDC, was significantly influenced by the 2020 pandemic.
Jeremy Allaire recalls discussing potential company downsizing with his board, days before the lockdown, due to uncertainty about the future.

INSIGHT

Disrupting Commercial Banking

Crypto dollars, like USDC on Ethereum, offer advantages over traditional banking for settlements.
This disintermediation could impact commercial banks' profitability from payment processing fees.

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------ 50 - Crypto-Dollars, Regulation, and DeFi

Guest: Jeremy Allaire

Jeremy Allaire is a serial entrepreneur and the Co-founder and CEO of Circle, the firm behind USDC. He advocates for the U.S. crypto industry in Washington, paving the way for current and future regulation of cryptoassets.

USDC and other stablecoins saw a massive influx throughout 2020 into Ethereum and DeFi as demand skyrocketed, providing a glimpse of possible long-term impacts on the future of money. Jeremy argues for a full-reserve money system based on Austrian Economics, moving away from the money creation inherent to today's fractional-reserve systems.

Jeremy details the synergy between fiat stablecoins and non-sovereign, store-of-value, commodity assets. He envisions a future of synthetic digital currencies balanced by a basket of non-sovereign assets. This is a vital time for instituting effective regulatory measures for cryptoassets and protocols, and as a front-line advocate, Jeremy stresses the importance of the crypto industry itself taking the initiative to front-run regulatory issues via creative innovation.

Jeremy self-describes as "cautiously optimistic" about establishing meaningful dialogue with regulators like Gary Gensler, Janet Yellen, and FinCen, focusing on specific issues like criminal abuse, self-sovereign identity, and consumer protection.

Jeremy concludes with broad market predictions and analysis of DeFi as a massively underrated space, with the long-term goal of DeFi interacting broadly with real-world identities.

This was an extremely interesting conversation that shed some much-needed light on stablecoins in a regulatory context, and Jeremy remains a key component throughout this development.

------ Resources: Jeremy Allaire on Twitter https://twitter.com/jerallaire Circle https://www.circle.com/ USDC https://www.circle.com/en/usdc Centre Consortium https://www.centre.io/

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