“More than the next material incarnation of the dollar”
The eye of providence on a dollar note. Image of Adrian8_8 via Flickr.com. License: Creative Commons
USDC, the leading fully regulated stable coin, is on the upper. The dollar token can become the great profiteer of the dematerialization of the money. In an annual report, the editor Circle explains how the USDC ecosystem develops-and why.
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Josh Burek, Senior Director of Strategic Positioning at Circle, reports on the company blog from the World Economic Forum in Davos. He manages to get to the point with two quotations, which makes cryptocurrencies and stable coins like Circle so powerful.
On the edge of the forum, the economic historian Niall Ferguson and Circle Ceo Jeremy Allaire met on the stage of an event of the Financial Times. Ferguson predicts that in five years you will no longer enter credit cards on websites and use banknotes and checks. This “dematerialization of money”, says Burek “can pave the way for the fundamental vision of Circle”: the friction -free exchange of values. USDC is not just the next incarnation of the dollar. It is a “new type of financial infrastructure”, a “uniform layer for money, commercial and capital markets that is installed directly on the Internet.”
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Cryptocurrencies make the traditional definition of money – as a means of payment, invoice unit and value memory -. This was explained by Circles chief economist Gordon Liao, also in it, but at an event of the circle lounge. “The programmability of the money […] will be a key feature of the money of the future.“Smart contracts make money more intentional and corruption -resistant. They allow “promising applications transcend finance, such as better visibility in global supply chains.”
The German sociologist Niklas Luhmann already set the appropriate definition of money in 1988: Money does not solve the problem of scarcity, “It is only brought into a different form that is compatible with higher complexity: in the form of shortage of money.”
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The success seems to be right. “In almost every metric and every trend, the USDC economy grows in a healthy way to be a primary strength to scale the economic activity of the Internet,” writes CEO Jeremy Allaire on the circle blog. He announces the first annual report on the condition of the USDC ecosystem. While “The era of speculation on Bitcoin and other crypto-assets” went through a tumultuous year, “ring digital currencies such as USDC the necessary change to a phase of usefulness and programming of blockchains.”
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According to Allaire, retailers are ready to accept USDC, and many traditional payment providers – checkout.com, Mastercard, Plaid, Stzrip, Visa, WorldPay – are already working with USDC to bring the stable coins to the dealers. Public blockchains will enable “almost-like, highly sucking, programmable and inexpensive payments”.
In the report you will find some facts that cover allaires optimism. Since the start of 2018, the number of $ 860 percent has grown per year. Today, 45 billion USDC circulated, and the Dollartoxes are circulating on eight blockchains. With a Cross-Chain-API recently published, Circle supports this trend to make the token more independent of the specific blockchain. Ideally, the user does not even know which blockchain the token is running, since the wallet supports them all.
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In Ethereum alone, $ 4.5 trillion was transferred to $ 4.5 trillion in Ethereum alone. About 60 percent of the volume – $ 2.7 trillion – were connected to Smart Contracts. More than 200 protocols interact with USDC, which caused users to lend and lend money, trade token to offer NFTS and donate for charitable purposes. Blockchain-based games like Axie Infinity or NBA Top Shot have also integrated USDC. The programmability of money is a killer feature. Stable coins and smart contracts bring money to a new level of complexity.
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The reporting authors estimate that Circle made it possible for an economic activity of $ 30 billion in 2022. These activitities are diverse, “they range from digital commerce and entrepreneurial treasury to foreign aid in countries plagued by conflicts.“There are 2 million wallets on various blockchains, which have spread with USDC, more than 75 percent less than $ 100 hold.
What the users do with the USDC can only guess Circle from the public blockchain data. 15 percent of all transactions flow from wallet to wallet, which is much more than with traditional payment systems. “This indicates this,” concludes the report, “that USDC is subject to a significant part of real economic transactions.“Circle drives this trend forward by entering the strategic partnerships with companies in payment and working with charity organizations, such as UN refugee aid UNHCR.
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In a way, one could say that circle gives away an essential element of the blockchain revolution-the creation of a new money that is independent of central banks, as it is Bitcoin. To do this, the USDC gets rid of the volatility of Bitcoin and other cryptocurrencies as well as the existential dependence on a primary blockchain. You don’t have to like this program to recognize that it promises a further development of the current monetary system. And apart from that, it seems to be well received on the market. Blockchains do not bury the dollar – they revive it again.
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