Circle CEO Jeremy Allaire on cryptocurrency market turmoil
NEW YORK (AP) — Circle is the cryptocurrency company behind USD Coin, the second-largest so-called “stablecoin” in the crypto industry.
Unlike more popular cryptocurrencies like bitcoin, stablecoins are typically backed by gold, government bonds, cash or other assets, and are typically priced on a 1:1 ratio with the U.S. dollar. More than $50 billion is stored in USDC, second only to Tether, a rival stablecoin with $70 billion in assets.
Co-founder and CEO Jeremy Allaire spoke to The Associated Press about Circle’s launch of Euro Coin, its euro equivalent of USD Coin. He also spoke about broader turmoil in the cryptocurrency space.
Q: Why are you launching a new cryptocurrency, Euro Coin, during this troubled time for the industry?
A: In some ways, it’s a great time to be launching products that increase the utility value of blockchain technologies. The market turmoil has been a really positive catalyst for USDC. It has been the flight to safety for crypto. (...) With the launch of Euro Coin, we’re bringing the same technology, regulatory framework, trust, transparency, and reporting that we put into USDC.
Q: How will you back Euro Coin? Are you going to hold Eurobonds like you hold Treasuries for USDC?
A: It’s going to be just euro currency, held in euro-denominated banking accounts. That’s it. We’re starting in a really simple way.
Q: Terra, a so-called “algorithmic stablecoin,” collapsed in May, erasing $40 billion in wealth in hours. This month the company Celsius froze all deposits and appears to be the crypto equivalent of a bank failure. What’s going on here?
A: It reinforces our view, whether it will be with stablecoins or cryptocurrencies, that it should be done inside the regulated U.S. banking system. And that’s why we’ve run USDC as we have for four years. And that’s holding up.
Q: What do you make of Congress’ efforts to regulate crypto?
A: You’re seeing two approaches on this issue. You can take the targeted approach like regulating stablecoins, or you can take the omnibus approach and regulate the entire industry. But my view has been that the Biden administration and Congress — Democrats and Republicans — will agree on the need for clear national policy on stablecoins. It’s the lowest hanging fruit.
Q: Turmoil in the crypto industry has caused layoffs at many firms. Coinbase laid off 18% of its staff this week. How are you being impacted?
A: I think Circle’s position is very strong right now. Our primary business is USDC, and its stability means we’re sort of counter cyclical to the broader sell off. We’ve got 115 open roles that we’re recruiting for right now. I think we’re kind of located in a slightly different place in the ecosystem.
Interview edited for clarity and length.