The crypto space is in turmoil. Much of this can be related to the recent fall of Terra USD, a known algorithmic stable coin that ultimately lost its peg a few weeks ago and sent many assets into a freefall. Jeremy Allaire – the CEO of Circle, one of the largest stable assets out there – recently issued his thoughts on the ongoing crypto crash and what to expect in the future.
Jeremy Allaire on What Will Happen with Crypto
Allaire is now launching Euro Coin, which is the European equivalent of USD Coin (USDC), the second largest stable coin in history. He commented about why he would look to launch such an asset when the digital currency space appears to be suffering like it never has before. He stated:
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 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.
When talking about what will back the asset, he mentioned:
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.
Many stable coins are backed by fiat currencies, gold, or other physical assets/ collateral. The problem with algorithmic stable currencies like Terra USD is that the only things they are backed by are belief from traders and computer data. There is much difference between both “stable” categories.
Discussing Terra USD and the subsequent withdrawal halt on Celsius, Allaire mentioned:
It reinforces our view, whether it will be with stable coins 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.
Regarding the U.S. Congress’ efforts to regulate digital currencies, Allaire said:
You’re seeing two approaches on this issue. You can take the targeted approach like regulating stable coins, 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 stable coins. It’s the lowest hanging fruit.
Circle Is in a Solid Place
He also commented on the ongoing layoffs that seem to be occurring amongst many digital currency companies like Coinbase. He believes Circle is in a good place:
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.