The Role of Stablecoins with Jeremy Allaire

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“The global economy is a perpetual motion machine… and what is happening right now has never happened in the history of the world, which is; you have effectively stopped the machine.”
— Jeremy Allaire

SHOW DESCRIPTION

Location: Zoom
Date: Friday, 10th April
Project: Circle
Role: CEO & Founder

By complementing Bitcoin trading, and making it easy to send digital dollars around the world, stablecoins continue to grow in popularity.

Commercial banks operate on a fractional basis, holding only a small % of deposits. During challenging economic times, this can lead to what is known as a run on the bank, where depositors attempt to withdraw their funds.

Unlike fractionally reserved banks, some stablecoins claim to be fully backed, meaning (for example) that for every 1 USDC, GUSD or USDT, the company claims they hold an equivalent $1. Stablecoins come with their risks and trade-offs, from the risk of being hacked to platform dependency. 

In a time of economic uncertainty, do stablecoins offer a better saving solution than our banks? And what are the pros and cons of self custody vs the high-interest rate savings accounts?

In this interview, I talk to Jeremy Allaire, the CEO & Founder of Circle, the company behind the USDC stablecoin. We discuss the use case for stablecoins, the benefit of being fully backed rather and the impact on the economy from coronavirus.

TIMESTAMPS

00:04:45: Introductions
00:08:35: Update on Circle
00:14:03: Stablecoins on Ethereum
00:18:48: Bootstrapping the network
00:21:09: How can we trust USDC?
00:28:35: Network fungibility and CENTRE consortium
00:33:18: Issuers of USDC
00:35:54: What happens if Ethereum fails?
00:39:54: Ability to track USDC transactions
00:43:11: Privacy models on Ethereum
00:49:05: Immutability of USDC
00:52:18: USDC future uses including credit and lending
00:58:24: Criticisms of USDC
01:02:01: Blacklisting addresses
01:05:55: USDC uses in poor communities
01:10:17: New normal post-coronavirus
01:18:07: Post-coronavirus positive predictions
01:22:33: Final comments

 

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SHOW NOTES

PodcastPeter McCormack