Money After AI: Meet the New Digital Dollar Built for the Internet "Stablecoins" w/ Jeremy Allaire, Emad Mostaque & Salim Ismail | EP #200

Peter Diamandis (0:00)

There's a lot of conversation going on around the world, a lot of chatter about the potential of the US losing its position as the global reserve currency.

Jeremy Allaire (0:08)

What can the United States do about it? And that's where stable coins come in. Jeremy Allaire is here.

Peter Diamandis (0:13)

He's the co-founder and CEO of Circle.

Jeremy Allaire (0:15)

We think that the world needs a full reserve banking system. We think that the world needs much safer base layer money, and that's what stable coins represent.

Peter Diamandis (0:26)

When you deposit, say, a million dollars into a bank, what happens?

Jeremy Allaire (0:29)

They're borrowing a dollar from you, and then they're permitted to lend it out 12 times.

Peter Diamandis (0:34)

That's insane.

Jeremy Allaire (0:35)

That's what fractional reserve banking is. One of the motivations for starting Circle was, okay, is there a way to have a full reserve payment system money separated from lending money? We could construct that on the internet, actually, and in fact, it's totally necessary on the internet.

Emad Mostaque (0:50)

Money is about to go from static to supercharged. You've talked to lots of central bankers. Are they even aware about what's coming?

Jeremy Allaire (0:57)

The really smart people are like, oh my f**king god.

Peter Diamandis (1:02)

Now, that's the Moonshot, ladies and gentlemen. Everybody, welcome to Moonshots. I'm here with my Moonshot mates, Salim Ismail and Emad Mostaque. I'm Peter Diamandis. And today, a special guest, a new friend, someone I hope to have in my life for many decades to come, Jeremy Allaire. He's best known as the co-founder, chairman and CEO of Circle, the company behind the stable coin, USDC. By the numbers, USDC has market cap of $76 billion, over 90% year-on-year growth. And this past summer did an IPO and raised a billion dollars. Welcome, Jeremy. It's a pleasure.

Jeremy Allaire (1:42)

Thank you, Peter. I'm psyched to hang out with you guys.

Peter Diamandis (1:44)

Yeah, I like to call what you've done at Circle an overnight success after 12 years of hard work.

Let me set the goal here for our listeners. So the way our banking system works today is kind of insane when you look at it. And I hope to dissect that with you. At the end of the podcast today, my hope is that our listeners are going to understand why stable coins on the blockchain are the future of money, the future of payments and transactions. And while stable coins, while they're safer, they're also more ethical and operate internet speeds. And finally, I want to discuss why America needs stable coins. So does that sound good to you?

Jeremy Allaire (2:24)

Yeah, absolutely. And I think we can we can bridge off of that into a lot of adjacencies as well that hopefully will be, you know, build on that too.

Peter Diamandis (2:33)

I think we should begin with a definition on stable coins and USDC. Do you want to take a shot or should I?

Jeremy Allaire (2:41)

I'm happy to. Yeah, I'm happy to. I've been thinking about this a long time.

Peter Diamandis (2:45)

I think so.

Jeremy Allaire (2:45)

And the and the semantics of all this. So look, there are a lot of things that call themselves stable coins. And so what I don't want to do is try and describe the entire topology of of things that that are stable in name only or whatnot. And so I'm going to use a more narrow definition. And actually, that narrow definition is now really being enshrined in law all around the world. So the major governments of the world are actually enshrining this definition of stable coins in law as they codify this as a form of legal electronic money in the global financial system. So I'm going to use that narrower definition. So in our conception, a stable coin is a representation of a fiat denominated currency, such as a dollar, a euro, RMB, yen, et cetera. It is a representation of a fiat denominated currency as a cryptocurrency. So operating on the Internet as a on public networks, on these public Internet networks, colloquially known as blockchain networks. So operating on these public networks. And they're notable in that they're not just denominated in fiat.

They are actually fully backed and fully reserved by such fiat currency. And there's a lot of nuance in there which we can get into. But fundamentally, it is a backed one for one. So that when you have one of these stable coins, well, a they're stable, meaning that you can always create them or redeem them for the unit, a dollar, a euro, et cetera. So you always have that one for one creation and redemption. And so therefore, the mechanism by which you get the stability is that full reserve. So they're designed to be very safe, safer than commercial bank money forms of digital currency. But that then operate on the public Internet and inherit all of the public Internet's superpowers, which we've all come to love, which is openness, interoperability, global reach, programmability, with marginal costs of moving things that approach zero and move at the speed of the Internet. So that is what stable codes are. And the legal term in the United States under recently passed federal law is what is called a payment stable coin, meaning it's good for payment. It's money good to settle a transaction, basically.