Circle founder personally stated: Why did I dare to go all in stablecoins 7 years ago?

Source: BlockBeats

Original title: Circle Founder: How did I become all in stablecoins 7 years ago

Circle, the world's second-largest stablecoin giant, was listed on the NYSE and began trading. It is the second-largest native US listed company born in the cryptocurrency industry after Coinbase, the largest cryptocurrency trading platform in the US in 2021. Four years ago, the listing of Coinbase ushered in the peak of Bitcoin, and four years later, just in time of the cryptocurrency cycle, the listing of Circle showed everyone a new narrative of cryptocurrencies — stablecoins.

Simply put, a stablecoin is the tokenization of the US dollar, and the value is anchored to the dollar. 1 token = 1 dollar.

Stablecoins, and the RWA (real-world asset chain) concept behind them, have been clearly different from previous years. The advantages of the US stablecoin policy and Hong Kong's stablecoin policy, combined with Wall Street's attention to the RWA project represented by Wall Street giant BlackRock and the current situation where old money is entering stablecoins, have quickly taken off the RWA and stablecoin concepts. Circle was not so favored earlier. With BlackRock and Mu's sister Cathie Wood scrambling to buy the IPO share, the IPO valuation rose again and again, from 5.4 billion US dollars to about 7 billion US dollars now.

In the Bitcoin white paper, the definition of Bitcoin is: a peer-to-peer electronic cash system. However, today's Bitcoin has long been a financial product, and no one will use Bitcoin for payment. The only thing that can be used for peer-to-peer electronic cash systems is now the only thing that can be used with stablecoins. This is the real imagination of stablecoins.

Jeremy Allarie, founder of Circle, saw it all seven years ago.

Below is a summary of Jeremy from Groove BlockBeats.

The “shovel seller” in the Web 1.0 era

I first came into contact with the internet in 1990, and what really interested me was to experience firsthand the power of open networks, distributed systems, decentralized architectures, open protocols, and open source software. I often call these the “DNA of the internet.”

During that time, I was also watching the process of the dissolution of the Soviet Union. I was deeply shocked by this structural transformation. At the same time, I began to study technology in depth, and became more and more convinced that the Internet would change the world.

By 1994, the first graphical web browser technology was introduced. At the time, I suddenly realized that we finally have a kind of software that can display content, applications, and various things on a web page, which gave birth to the concept of “the Web as an application platform.”

So my brother and I co-founded Allaire and launched ColdFusion, the first commercially available web programming language.

Although there was Perl at the time, and others would write dynamic page logic in C on web servers, ColdFusion really made web application development simple and easy — as long as you had an idea and about a thousand dollars, you could use it to make a web application that can be used interactively in a browser.

In 1995, this was already a big breakthrough, and with the rise of websites, e-commerce, and online content, we jumped on this wave. Allaire has also developed a complete set of tools, and millions of developers around the world use our software.

As the market matured, we successfully listed our company in early 1999.

It was a bit “alternative” at the time because we went public profitably — but during the internet bubble, most companies lost money when they went public. But we are more like “sellers” in the Internet 1.0 era, providing basic tools for the entire industry.

After going public, we merged with Macromedia, which was also a giant building internet and content development tools at the time. After the merger, I became the CTO of the new company and began to drive the development of Flash applications. It was a very powerful software at the time, which allowed web pages to achieve more complex multimedia presentation and interactive experiences.

The 'political economist on the couch' falls down a crypto rabbit hole

Back when I first came into contact with the Internet, I was originally studying international politics and economics. My focus was on comparing various economic systems and political systems, and I was very interested in macroeconomic topics such as the international economic system. I was then excited about the internet, and I was deeply attracted to the changes in the way information is delivered and software distributed by these open networks.

In the Macromedia era, as early as March 2002 (yes, 2002, not 2022), we added the ability to play videos seamlessly into Flash Player, making video playback ubiquitous on the internet.

For the first time, anyone can easily embed a video in a browser. YouTube's explosion was built on this technology—it was first implemented on Flash Player.

Then I started another company called Brightcove. Brightcove's philosophy is still based on the underlying genes of the Internet: open networks, open protocols, distributed systems.

My thought at the time was - can any company, any media organization post video and TV content directly on the internet? You know, it was 2004, when there was only broadband, Wi-Fi was first available, and there were no smartphones, but people were already talking about the future of “connected devices.”

What is very clear is that I can see that in the future, there will be a large number of connected devices, including Wi-Fi and mobile broadband, and video transmission will be completely liberalized.

So we created an online video distribution system — understood as an “online TV platform.”

This is an extension of the Internet's capabilities: it is becoming richer, more and more realistic, what people thought of Web 1.0 back then came true, and in the Web 2.0 era, Brightcove's business was also very successful, and it was finally successfully launched in early 2012.

Why was Circle founded?

When the 2008 financial crisis struck, it inspired my early academic thoughts. I became a “political economist on the couch” and frantically read all kinds of materials about the nature of money, central banks, the international monetary system, and partial reserve systems. I'm thinking, “What's going on with this?” Also starting to think about whether there is a better monetary system? Is there a better way to structure the international financial system?

Of course, this isn't the kind of thing you do when you wake up and say, “I want to start a company that disrupts the global monetary system.” At the time, it was 2009 and 2010, and there was no realistic path to achieve this; I was just constantly researching.

But in 2012, soon after Brightcove went public, I came into contact with cryptocurrencies, and since then I've been stuck in this rabbit hole.

Brightcove 时期的 Jeremy Allarie

I myself am a technology and product person, and after entering this field from a technical perspective, I saw something shocking: this was a real technological breakthrough.

Some computer science problems have been solved, and these solutions are powerful. For the first time, I synced the Bitcoin blockchain on my laptop and completed a peer-to-peer transaction through it — a transaction completed directly on the internet and completely dependent on an open protocol. That moment was like the first time the Mosaic browser opened a webpage — I thought, “Oh my god, this is the real missing internet infrastructure!”

Next, my co-founder and I went deeper into the research, especially in the tech community at the time, and we came across a lot of discussions:

In addition to Bitcoin, can other types of digital assets be issued on such networks? Today we call them “tokens” or “digital assets.” And I myself have worked on virtual machines, programming languages, etc., so I naturally participated in discussions:

How can these digital assets be “programmable”?

How to implement a “programmable currency”?

How to build a smart contract?

At the time, these things were just ideas on napkins. Some white papers had just appeared, but we knew very clearly that they would all come true; it was only a matter of time.

So we combined all of these ideas with another question: how can we build a safer and more open financial system? These thoughts came together and became the only thing on my mind, and I almost became obsessed, and finally decided to start Circle.

Our original intention was it possible to create an HTTP-like protocol for “money”? Can an open internet agreement be created for the US dollar? This protocol is open, programmable, etc.

This was our idea ten years ago, and now it's a true “killer app” in the field of cryptography. Although it took a long time to build this system, it is now quite large, although it is still in its early stages.

USDC's path to rise

In the spring of 2018, the crypto market experienced a sharp correction, then the entire industry fell into a severe cold winter, and almost the entire market fell sharply. Our products, which were supposed to bring in revenue and profit at the time, either became barely balanced or started losing money, so we began to burn money very fast.

By 2019, the deepest part of that cold winter, financing had become extremely difficult. Meanwhile, our operating costs are out of control, and we're running out of cash — if we don't act, we're facing bankruptcy.

It was at this time that we officially launched USDC in October 2018.

A big gamble

DeFi protocols began large-scale access to USDC in 2019, and early PMF also appeared in the market. Although the market still fluctuated greatly at the time, on a technical level, Ethereum was mature enough to actually support these use cases. With MetaMask and other related products, developers can finally start actually using these tools.

Although the trading volume was still small at the time, USDC was highly accepted by the developer community. We saw this and realized that this was our company's original vision, that was our core, and that was what we really wanted to do.

As a result, in a very short period of time, we quickly sold three businesses — sold the Poloniex exchange, the Circle Trade OTC business, sold Circle Invest products for retail investors, and shut down and liquidated the payment app we had launched.

By selling these assets, we received urgently needed capital and completely restructured the company. Some employees were transferred to these divested businesses, and the company as a whole made drastic adjustments.

By the fall of 2019, we were once again on the verge of bankruptcy, but at the same time, USDC began to show early vitality in the market. So we made a decision — fully betting on USDC, and decided to put all our energy into building a complete platform around it to drive widespread adoption.

This is equivalent to a “gambling company” decision. At the time, USDC itself had not brought in any revenue, or even the entire company had almost no revenue. But I was very convinced at the time that the era of stablecoins had arrived, that they would eventually become a core component of the global monetary system, and that stablecoins were the most suitable monetary architecture in the Internet age.

We had the right products at the time, and as long as we persevered, we would definitely be able to find the right path and make something valuable. So we're doing our best to push it forward.

This is the first real major challenge in USDC's development. Although we have experienced many difficulties before, this moment is a critical moment for the survival of the entire company. Although USDC had early growth momentum back then, it wasn't enough to support a large-scale company.

We are directing all of the company's resources to USDC, and we are betting all of our capital on it. I remember very well that we officially announced this strategy in January 2020, when the homepage of Circle's official website was completely revamped and turned into a huge billboard promoting “stablecoins are the future of the international financial system.” The only action button on the page is “Get USDC.” For this one, all other features have been removed.

Then, on March 10, 2020, we released the Circle platform upgrade, fully upgraded the USDC account system, and launched a complete set of new APIs to facilitate developers to seamlessly access payment systems such as banks and bank cards to enable USDC deposit and withdrawal operations. The entire platform is built around USDC.

Just three days later, on March 13, the world went into lockdown due to the COVID-19 pandemic. What's interesting is that USDC actually started growing in February 2020, before our official launch. I think this is because users in the Asian market are aware of the seriousness of the epidemic and are beginning to respond early.

A very complex intertwined phenomenon occurred during that period: many people began to transfer capital to digital dollars out of distrust in the domestic financial system; at the same time, governments also introduced large-scale emergency stimulus policies one after another in an attempt to inject liquidity into the market to prevent the economy from falling into the “Great Depression.”

As a result, you can see that highly coordinated ultra-loose policies have emerged around the world, leading to a massive influx of capital into the market. People sit at home with government subsidy checks and start thinking, “How can I use this money?”

At that time, the world also experienced a huge turning point — the digitization process of the whole society suddenly accelerated.

The concept of the metaverse began to be popular at that point in time, and people were all “online” overnight. All digital products have experienced explosive growth. From Zoom (which almost became the representative company of that period), to Peloton for home fitness, to e-commerce, online retail, digital payments, and online markets—almost every digital industry experienced a five-year level of growth at that stage.

At the same time, the adoption of blockchain technology and the digital asset market have also entered an explosive phase.

The summer of 2020 is known as the “summer of DeFi,” and USDC also soared from $400 million in circulation in early 2020 to $40 billion in one year, which can be described as a drastic and explosive growth.

稳定币市值增长曲线

Prerequisites for the popularity of stablecoins

Over the years, and arguably just a year or two ago, people are still often asking, “How can this thing really be popularized on a large scale?” And my consistent answer in the past is: We need to address three key questions. Of course, “we” here doesn't just mean Circle, but the entire industry, and everyone needs to work together to promote it.

The first issue is infrastructure, the blockchain network itself.

My model of thinking about blockchain networks is: they are like “the operating system of the internet.” What we need is an operating system-type blockchain network with higher performance and higher throughput. Over the past few years, great progress has been made in this area. We have now entered the “third-generation blockchain network” era — that is, a high-performance Layer 1 public chain, and a Layer 2 expansion network.

This means higher transaction throughput can be achieved, and the cost of a single transaction is extremely low, possibly less than a penny, or even less than a cent.

Coinbase CEO Brian Armstrong also previously said “transaction time is less than one second and cost less than one cent,” but now we have actually basically achieved this state of affairs. The progress of these high-performance networks is also driving the growth of the entire ecosystem. Because you've reduced unit costs, marginal costs, and increased transaction speed — this is like moving from the era of dial-up Internet to broadband Internet, from Web1.0 to Web2.0.

The second issue is network effects. A stablecoin like USDC is actually a web-based product platform, and developers will build applications based on it. The more applications connected, the greater the utility of the entire network. The more users with stablecoins, the greater the utility of the network, which will form a positive cycle.

At some point, developers will even realize that if my products don't support USDC, then I'm probably falling behind in the competition. Therefore, once the infrastructure upgrade is completed, this network effect between users and developers will really take effect.

Then there is the third problem, also known as “usability” improvement, which is actually closely related to infrastructure upgrades. Remember two or three years ago, if you wanted to use stablecoins, you had to go to a certain platform and then install a browser plug-in wallet. In order to be able to use the wallet, you had to buy Ethereum first, pay expensive processing fees, and then transfer ETH to your own self-hosted wallet. The whole process was extremely troublesome. It can be said that the whole process was completely out of common sense.

At that time, if someone said, “Who would want to use this thing?” It's actually totally understandable.

But now you can directly access the wallet system through the web interface or mobile app. The whole experience is just like signing up for WhatsApp. You may only need a phone number, a facial recognition or biometric code, no memorization, and no complicated settings.

The combination of all these changes is creating a good usage environment, making stablecoins easier to accept and use.

The final ultimate hurdle is government regulation.

What is most exciting is that now around the world, almost all major jurisdictions, from Japan, Hong Kong, and Singapore to all of Europe, the United Kingdom, the United Arab Emirates, and the US, are introducing relevant laws one after another to clarify stablecoins as legal electronic money and incorporate them into the formal financial system.

Once these laws are implemented, the use of stablecoins will expand from early crypto natives to a wider range of ordinary people. So we believe that by the end of 2025, stablecoins are likely to become part of a broad legal integration in the global financial system.

Of course, we also need to be aware that all of this is still at a very early stage. You can use the “crossing the divide” theory proposed by Geoffrey Moore to see the current state of affairs: we are in the process of jumping through that “divide” in the air, and we have yet to actually land, and we are still likely to fail or fall. But I'm sure we'll skip it.

We can see more and more institutions that I call “FinTech-friendly banks,” or “emerging digital banks (neobanks),” starting to natively support the use of stablecoins. Examples include Latin America's NuBank, Europe's Revolut, or brokerage apps like Robinhood.

Of course, it also includes large crypto companies, such as Coinbase and Binance, which together have more than 400 million users. To a certain extent, they have actually become “financial super apps”: you can save your balance, receive wages, bind a card to spend, and the process of obtaining and using USDC has also become very smooth.

We are indeed seeing a trend — people are starting to use the “dollar” as a unit of stored value, but its underlying form is actually USDC.

Moreover, we are now cooperating with Visa and MasterCard. They all have projects that allow card issuers to issue such cards: ostensibly Visa or MasterCard, but they actually use stablecoins, such as USDC, for actual consumption.

This model is already popping up in large numbers in emerging markets. Users obtain a physical or virtual card through a new bank-style digital wallet app, which is tied to their stablecoin balance. Because many people want to hold dollars, and these cards allow them to continue spending in traditional card networks, the back-office settlement method has changed to USDC.

Even for these card issuers, clearing funds they paid to Visa or MasterCard can now be done directly through USDC. In other words, USDC has actually been used as a clearing channel between financial institutions and card networks, which in itself is very interesting.

At the same time, we're also seeing some changes on the other side — that is, merchant billing parties are also starting to join in. Companies such as Worldpay, Checkout.com, Nuvei, and Stripe are providing merchants with the option to pay in USDC.

At the beginning of this year, we saw a really cool example: Stripe co-founder John Collison made a “finale launch” at their annual conference, as in previous years. His original words were almost: “Crypto is back, but this time it's not Bitcoin, it's USDC, it's a stablecoin.”

On the spot, he demonstrated a new feature in the Stripe Checkout product—a product that allows merchants to embed Stripe's payment portal directly into their website or app. In the demo, USDC is shown side by side with a credit card as a payment method, and merchants can choose to receive USDC.

Collison was very excited to show the whole process on stage, and also said, “This is how the payment should be.” In the demo, they used the Solana network. Settlement was made in real time, and the processing fee was very low.

As the legal status of stablecoins gradually becomes clear, more and more financial institutions will regard them as a basic clearing layer.

For example, a merchant might say, “I'm willing to accept USDC because I can receive money right away and save on processing fees, which is a better choice for me.”

On the user side, more and more types of terminal products are also emerging — whether traditional banks, emerging digital banks, or super encrypted apps, they are creating a seamless experience that allows users to complete payments by simply scanning a QR code.

Another big thing I mentioned on Twitter earlier this year: iOS has begun opening NFC to third-party wallets. This means that Web3 wallets may support “tap to pay” (Tap to Pay) in the future. Users can directly use USDC wallets in their phones to complete payments on physical merchant terminals.

Of course, achieving this requires cooperation from many parties. For example, payment processors (processors) and acquirers (acquirers) must support on-chain transactions, wallet developers need to integrate NFC functions into their products, and they also have to pass Apple's approval.

However, these are all already being planned, and it is expected to be implemented on a larger scale in 2025. This is indeed an exciting development.

The policy environment continues to be favorable

Circle's philosophy from day one was to stand at the intersection between the traditional financial system and the new world of blockchain, and to do this, the US government already made its legal position clear as early as March 2013:

If you are a company that connects the banking system to the virtual currency world at the same time, then you are a “money transmitter” (money transmitter), you must register with the federal government, have a complete anti-money laundering procedure, and apply for a license in every state with relevant legal requirements.

We are the first company in the crypto industry, from inception to obtaining a full set of compliance licenses. We were the first crypto company to obtain an Electronic Money Authority (EMI) license in Europe, and the first company to obtain a so-called “BitLicense” in New York — the first regulatory license established specifically for the crypto industry. After that, for almost a year, our family was the only one holding this license.

We always adhere to the concept of “supervision first” and always choose the “front door” route to ensure that we have a good and stable compliance system. Incidentally, it is with this foundation of compliance that we can achieve another key goal: liquidity.

What is liquidity? That is, you can actually create and redeem stablecoins, connect to real bank accounts, and use fiat to buy and redeem stablecoins. If you're a dubious offshore company and no one wants to open a bank account for you, then you can't do this at all. You don't even know where your bank is.

We were the first company to establish a high-quality banking partnership, and also introduced strategic partners like Coinbase to distribute USDC on a large scale on the retail side, making it easy for any ordinary user with a bank account to buy and redeem USDC. We also provide institutional-grade services. In other words, from transparency, compliance, and regulatory frameworks to actual liquidity, we've done it.

At the level of technological innovation, we are also constantly exploring what else the agreement itself can do. We think of USDC as a stablecoin network protocol, and have been thinking about how to cooperate with developers to promote its integration and application. These basic principles are the fundamental reason we have been able to get to where we are today. We are still building them, not just for the US market.

In terms of payment stablecoins, all parties in the US have actually done a great deal of work. In my opinion, the “Stablecoin Payment Act” is quite mature. The House of Representatives has bipartisan support, and the Senate leadership is actively participating. We have also seen great attention from government levels, including the White House, the Treasury, and the Federal Reserve. This topic has been one of the government's priorities for several years.

(Translator's note: The US Senate passed a procedural vote on the “2025 US Stablecoin Innovation Guidance and Establishment Act” (GENIUS Act) at 66:32 on May 19 to try to provide federal regulation for dollar-linked stablecoins)

Many key issues, such as how to ensure financial security and soundness while supporting private innovation, how the Federal Reserve should play a central role (setting standards for US dollar stablecoins), and how to provide a path for issuers and regulators in various states, similar to the current “two-track banking system” — you can be a state-chartered bank or a federally chartered bank — are actually all under way.

The financial system itself is a highly regulated industry. The energy system is highly regulated, the transportation system is highly regulated, the space system is highly regulated, and pharmaceutical production is also highly regulated. In fact, most critical technologies or infrastructure in society are under intensive supervision.

The software industry has probably been an exception for the past three decades, where there has been little regulation. But now if you're doing something really big and cutting-edge, such as artificial intelligence, hardware combined with autonomous driving, or you're building a global digital currency system — these fields have begun to intersect with traditional highly regulated industries, and they have a huge potential impact on society, it makes sense to be regulated in this situation.

I don't think “as long as it's an innovation, it shouldn't be regulated.” If something becomes extremely important to society as a whole, then it needs a contractual spirit and social responsibility framework that matches it. This is a system that actually exists. Regulation is important — global systemically important banks (G-sibs), for example, are far more regulated than a local community bank.

So if what we do becomes systemically important in the future, then not only will our relationship with the US government change, but our relationships with other governments will change as well. Of course, these are all things that are far away in the future, and we can't talk about them right now.

What we are really focusing on now is how to implement our vision of an internet financial system and how to make an “open, programmable, and combinable currency” a reality. We want this innovation to actually take hold and not be stifled. And to do this, it actually requires policy makers and governments to give more free space to innovate — just as the Internet has received in other fields.

Circle's business model

I believe Circle is one of the most transparent financial institutions in history. If you look at a bank, insurance company, or other type of financial institution, you'll notice that they don't disclose product operations in real time, nor do they disclose basic balance sheet data every day, and this is exactly what we've been doing.

How exactly was this done? First, once we receive dollars, these dollars are pre-deposited into a reserve account before minting USDC. These reserve funds are segregated accounts established for the benefit of customers in accordance with legal requirements. Legal and regulatory requirements require that these funds be segregated, and electronic money instruments can only be issued after the quarantine is complete, and ownership of the funds belongs to the customer. Therefore, we are strictly complying with everything from law and regulation to actual operation.

How to ensure the safety of reserves

So what are these reserves made up of? Currently, the reserve is mainly divided into two parts:

Currently, about 90% of the reserves are held in an account called the Circle Reserve Fund (Circle Reserve Fund). This is very important. We want anyone who wants to understand USDC to clearly see the composition of these reserves in a regulated structure. That's why we partnered with BlackRock, the world's largest asset manager, to establish the Circle Reserve Fund.

This fund is essentially a government bond fund, and can also be understood as a government money market fund whose sole purpose is to hold USDC reserve assets. It is issued as a security, is regulated by the U.S. Securities and Exchange Commission, and has an independent audit and independent board of directors.

The Fund's entire assets are fully transparent and updated daily. If you search for “USDC” online, you can go to BlackRock's official website to clearly see the denomination, purchase time, and maturity time of each treasury bond. All treasury bonds are maturing within 90 days and are extremely liquid and stable dollar assets.

At the same time, there are also assets in the form of “overnight treasury bond repurchases”, which are guaranteed by the world's largest systemically important banks (G-sibs), which are essentially equivalent to treasury bond assets.

As a result, every component of this reserve structure is visible and transparent. Anyone familiar with market liquidity and financial assets will tell you: if we need to redeem all of our assets within 24 hours, we can do it.

In addition, about 10% of the reserves are basically stored in cash in a number of systemically important banks around the world, commonly known as “big but not going to fail.” Currently, there are about 50 such banks around the world, institutions like JPMorgan (JPMorgan). We have publicly disclosed some of our partner banks. Due to their large size and stable reputation, these banks actually enjoy hidden government endorsements.

Additionally, we have established a global infrastructure to support institutional clients in creating and redeeming USDC. And the reason we are able to do these businesses is because we are a regulated company. Banks and regulators around the world are therefore willing to let us operate in local markets.

We currently have regulatory approvals in Singapore and Europe, and are also cooperating with Japan and other places to establish compliant distribution channels, which means institutions can open accounts and create or redeem USDC in the Singaporean banking system, the Hong Kong banking system, the Brazilian banking system, the US banking system, and the European banking system.

In other words, as long as you have a bank account in these countries or regions, whether an individual or an institution, you can create and redeem USDC, and the funds will flow directly into the reserve structure described above.

Therefore, from the operational side of the local banking system, you have the liquidity to create and redeem; from the perspective of underlying reserve assets, you have the most liquid and stable asset support in the world; at the same time, you also have a reserve fund structure registered by the public and disclosed on a daily basis, superimposed by global regulators.

Circle's future plans

You should remember that before the iPhone appeared, there were about 17 different mobile operating systems on the market: Symbian, Windows Phone, Palm, BlackBerry, and NTT Docomo systems — all kinds of systems, and every company was pulling developers to settle in and distribute their own mobile phone systems.

To be honest, those systems had a terrible experience and didn't work at all. You go to the Mobile World Congress and see a bunch of people showing things they've developed based on Symbian, but the result is a bunch of trash.

So what I want to talk about is, to some extent, how to ensure reserve safety — although these systems are very advanced in terms of architecture, they are actually very inexperienced in use.

They're more like a set of operating systems, competing for ecology, developer resources, feature friendliness, etc. But let me be very clear: we haven't arrived at the blockchain “iPhone moment.”

What we really need is a blockchain network that not only hosts a world of financial transactions.

It should also support social networking, games, content, intellectual property, AI data traceability, AI agent transaction flows, retail-scale applications, digital tokens for mass use, etc. — all of which cannot be done yet. Throughput isn't enough, the system can't support it, and the infrastructure isn't scalable.

In the long run, what we need is a network capable of processing millions of transactions per second, which is an attainable goal. At the same time, software engineers' development experience and user experience are still very early.

Looking back on my past experiences in platform software, developer tools, and user experience, I feel like we're not fully prepared. Of course, I agree — we're pretty close.

But even if we actually have a “click and go” blockchain platform, I think new levels will continue to be superimposed on top of it, and more networks will appear.

You can anticipate this situation for a while: for example, you are a large Asian internet company with 500 million users, and now you want to introduce digital tokens, stablecoins, and smart contracts to these users. Once you open it up for use, all the infrastructure currently on the market will simply collapse — it simply won't be able to carry this much traffic.

However, you can imagine that one day, this model will evolve like AWS's “virtual private cloud” (VPC), and a similar “dedicated blockchain” will emerge, forming a network model of chain to chain interconnection to support large-scale expansion. This will essentially lead to more “fragmentation,” but it also means more infrastructure development.

As Circle, our goal is to ensure that stablecoin network protocols such as USDC, EURC, CCTP (cross-chain transfer protocol), and gas fee abstraction can be easily invoked in these environments — without worrying about the complexity behind it for users and developers.

So whether the future supports 15 chains or 50 chains, I can't give you the exact numbers, but what is certain is: we will continue to expand, deploy, and release stablecoin infrastructure to support more blockchain networks.

As for when the “iPhone moment” will actually arrive, or when the marginal benefits will decline, I don't know.

Speaking of currencies, we have now introduced USDC and EURC. I can't say that we will definitely issue more coins in the future, but what is certain is that globally, whether in emerging markets or developed countries, stablecoin regulations are being implemented one after another, and we are also seeing more and more high-quality stablecoin projects being launched.

I think by 2025, you'll see more and more fiat stablecoins such as Mexican pesos, yen, Australian dollars, and pounds. And we at Circle don't need to be an issuer for all of these coins. What we really need is a compliant, high-quality local team to issue these stablecoins using the infrastructure we have established, so that we can achieve good cross-currency interoperability, so that applications can easily access and use between different currencies.

The issuance of each currency is very complicated. It involves a large number of legal and regulatory issues, as well as consideration of the local central bank's preferences, market acceptance, etc.

We will also evaluate the size of the market, such as how large the market for this currency actually is. This is the key point we mentioned earlier.

We truly believe that in this “Internet financial system era,” the US dollar's position will only become more and more important, and that the US dollar stablecoin (USDC) will be the core of it. So our main focus will definitely be on this.

At the same time, of course, we also want to open up imports and exports and establish connectivity in different markets around the world. We will continue to promote this, and we are also very happy to see the development of other projects.

But from a commercial or ecosystem perspective, we don't think we have to make all of these non-dollar currencies ourselves.

From the perspective of monetary theory — whether from the perspective of central banks or commercial banks — there is actually a concept called “neutral interest rate.” This interest rate is neither easy nor austerity.

We experienced a long “zero interest rate floor” era after the 2008 financial crisis, which was accompanied by the monetization of government debt to hedge against the crisis. Later, due to soaring inflation, the central bank reacted strongly to austerity. Interest rate policy is actually such a cyclical cycle.

However, whether it is a “nominal interest rate” or a “neutral interest rate,” they essentially fluctuate around a target range. Some economists now think that the neutral interest rate could be around 2.75% to 3% — a level that would neither suppress the economy nor excessively stimulate it.

So, whether you're a central bank or a bank, high interest rates don't actually mean “good.” Of course, banks or institutions like us may benefit from rising interest income from reserve assets, but overall, this environment is tight — reduced economic activity, declining capital flows, slowing capital investment, and reduced risk appetite.

And when interest rates fall, it is true that interest income from our reserve assets also falls. This is an objective fact. But at the same time, capital has become cheaper, liquidity has increased, capital investment has increased, and the economy is running faster — this is good for the venture capital market, the real economy, and entrepreneurial activity. And these will in turn promote the use and growth of stablecoins.

We have gone through cycles of easing as well as cycles of austerity. A milder cycle is likely to follow, and we can't predict it yet. But we've always believed that:

On the one hand, there are macroeconomic forces at work, which we cannot control, such as global economic trends and central bank decisions;

But on the other hand, we have built our own platform network, with a user growth flywheel and a developer ecosystem flywheel. We are building a highly practical digital currency form, and we are also building a powerful development platform — the system itself has an inherent growth logic.

Today, the total global market for “legal electronic money” is over $100 trillion. I think a subset of these — the stablecoin market represented by US dollar stablecoins and euro stablecoins — will continue to expand regardless of whether interest rates are high or low.

What we are seeing now is that the total size of the entire stablecoin is only $160 billion (now over 200 billion), accounting for only 0.16%. This is clearly still a very early stage.

If you agree with how “internet-level utility” has reshaped media, communications, travel, and software distribution, then you'll also believe that the new form of internet money may be just as transformative in the future.

If all goes well, maybe in the next 10 to 20 years, we can see 10% of the world's currencies become stablecoin-like. This doesn't sound exaggerated — because it does take ten or decades for an internet product to reach 10% penetration, but it will indeed change the world.

We want Circle to be an important player in this transformation.