Now that spot bitcoin ETFs have been approved by the US Securities and Exchange Commission, many on Wall Street are interested to see where the ETFs go from here and what it means for the broader acceptance of the cryptocurrency.
Circle CEO Jeremy Allaire joins Yahoo Finance's Brian Sozzi and Julie Hyman at the World Economic Forum in Davos, Switzerland to discuss everything crypto and how to navigate the ever developing world of digital assets.
When asked directly on how to avoid the hype, Allaire responds: "I take a very long-term perspective. I try and think about what can the world look like over 5 years, 10 years, 15 years and really just try and focus on what are the kinds of things we need to be doing now. What is the infrastructure and partnerships and technology?... Yes there have been things that have been flying fast here, there, and we just sort of diligently focus on incrementally building what that is." He continues with "Just staying long-term focused, looking what's in front of you, taking those next steps, trying to do it deliberately allows one to not be constantly jarring back and forth over what the latest hype is."
This interview is part of Yahoo Finance's exclusive coverage from the World Economic Forum in Davos, Switzerland, where our team will speak to top decision-makers as well as preeminent leaders in business, finance, and politics about the world’s most pressing issues and priorities for the coming year.
For more expert insight and the latest market action, click here to watch this full episode of Yahoo Finance Live.
JULIE HYMAN: Unlike in the go go crypto days of years past at Davos, where there was crypto signage everywhere, this year there is some signage, it's a little more limited. One of the companies that has a little space here and a sign is Circle, the stablecoin company. And joining us now is the CEO, Jeremy Allaire. Good to see you, Jeremy. Thanks for being here.
JEREMY ALLAIRE: Thanks, Julie. Great to be here.
JULIE HYMAN: So we're at yet another interesting moment in crypto, among many. When you are here in Davos, what are the conversations you're having, what are the goals here, and kind of where are we in the global crypto arc, so to speak?
JEREMY ALLAIRE: Sure. Well, for Circle, really, since inception, our focus has been how do we take the traditional financial system, traditional money, like dollars, and connect it to this technology, connect it to blockchains, and build new kinds of payment systems, value exchange systems built on top of that? So we've always had a little bit of a different approach.
And I think the kinds of things that we're trying to accomplish here are also, as a result, a little bit different. So it's working with governments around the world, many of whom are putting in place stablecoin regulations as we speak. This year. It's a big movement, working with financial institutions who are increasingly getting involved in this industry in different ways. You see that reflected in some of the major names involved in some of the launches last week.
And then, of course, I think the opportunity internationally is how can digital dollars play a bigger and bigger role in humanitarian aid, in the effective use of remittances, in international transactions. And so, those are the things that kind of run at the core of what we do. And a lot of the agenda that we have here at the forum.
BRIAN SOZZI: You're the co-founder of Circle, and you're also a crypto shakeout survivor. At Davos, are you getting questions, Jeremy? How did you do this? Are you getting a lot more street cred because you have survived the crypto shakeout?
JEREMY ALLAIRE: Well, I think we've always tried to go that trusted, transparent, compliant path. And I think that's been core. And I think we've always had a reputation as a firm that tried to do things the right way and work with regulators and others.
And I think through the turmoil of 2022 and parts of 2023, I think a lot of projects and a lot of companies that didn't have that as their DNA, and I think you saw some of the outcomes from that. Whether they turned out to have financial fraud and they had no controls and/or I think we're out ahead of themselves in terms of financial crimes and other things.
So look, we've done things the right way. We've also focused on the non-speculative part of this, which is how do you take dollars, digitize them, and make them run on the internet using blockchain technology. And so our whole focus has not been what's going to be the next token that you're going to trade, it's really been on how do you make this a useful infrastructure. And I think that kind of infrastructure play is critical. I mean, I think the killer app of blockchains is, without question, stablecoins. And so we're part of that kind of evolution.
BRIAN SOZZI: As a leader, let me just press back on it, how do you not get sucked into the hype?
JEREMY ALLAIRE: Well, look, I take a very long-term perspective, . I try and think about what can the world look like over 5 years, 10 years, 15 years. And really, just try and focus on what are the kinds of things we need to be doing now, what is the infrastructure, or the partnerships, the technology. And yes, there have been things that have been flying fast here or there, and we've just sort of diligently focused on incrementally building what that is.
And I think, at the end of the day, when you zoom out and you look at what we've been able to accomplish over 10 years, it's pretty extraordinary. And so, I think just staying long-term focused, looking at what's in front of you, taking those next steps, trying to do it deliberately, allows one to not be constantly jarring back and forth over what the latest hype is.
JULIE HYMAN: Speaking of next steps, you guys have filed for an IPO. I know there's not much you can say about it, but can you tell us why you've decided to go ahead with that particular step right now?
JEREMY ALLAIRE: Yeah. I mean, I can't make specific comments about any regulatory filings or things like that. We have been very clear for a very long time that we want to build one of the most trusted, transparent, and compliant firms in our industry. And ultimately, we've said that becoming a US-listed, publicly traded company is an important part of that. And so we are committed to that path, and we're committed to ultimately being that. Again, can't comment on any specific filings and things like that, but I think it's important to have the kind of trust and transparency and compliance that comes with ultimately being a public company.
JULIE HYMAN: It's so interesting to me in crypto because there are so many ways, even though crypto, sort of, faithful or pure folks would like a world to exist just on crypto, there are so many places where crypto and fiat, crypto and the traditional TradFi intersect. And you guys are really a good example of that. You have USDC, but you have reserves, you're going public in the US regular financial markets. Is that just how it's going to be? Do people just have to accept that they have to work together?
JEREMY ALLAIRE: Well, I think for companies that are trying to build products and technologies, whether they're regulated products or not, that kind connect the existing financial system and this, then yes, absolutely have to go through that. Anyone who wants to be an intermediary and to handle customer money or conduct transactions that have risks of crime or other things, there are obligations, and you need to do that. And you need rigorous standards of audit and other things like that. So that is really vital.
At the same time, the technology is the technology. And so, a technology like Bitcoin is truly decentralized. And so there will be what I like to refer to as these digital commodities, just like there's no government that issues oil or there's no government that issues gold, digital commodities are a fact of life now. And I think the world has to figure out, OK, well, how do these digital commodities exist, and are there rules around who can buy them and sell them and the markets for them, and you see that with other commodities as well. So I think that's sort of emerging to.
BRIAN SOZZI: Talked to the head of public policy over at Coinbase, and he's stopped short at saying that crypto, or I believe he's probably talking about Bitcoin, would rival the US dollar. Do you think we'll hit that day where the dollar is rivaled?
JEREMY ALLAIRE: Look, I think the dollar is the world's reserve currency. And my own belief is that the US can't take that for granted. We live in a world, we've seen dollar weaponization, we've seen balkanization, we see different geo-economic blocs that are forming and want to form alternative payment systems. That's happening. I mean, that's widely discussed.
And so if the United States wants the dollar to remain the predominant currency, then it needs to have a strategy for that. And the currency competition in the future is a technology competition. It is not just a monetary policy competition, or who's able to repay their debts competition, which is sort of the basis of the dollar. But it's a technology competition.
And there, there is a kind of digital currency space race. And the US needs to put in place the laws that allow for digital dollars to thrive and allow the private industry and regulated private markets to grow. And so, that's why we've been such advocates for dollar stablecoin laws because it's actually part of how the US can win the digital currency space race, so cannot take it for granted.
I think in 10 years, the currency regimes that have embraced this next wave of internet technology are actually going to be in a stronger place. And so, I think, to the question of whether a commodity money like gold or a digital commodity like Bitcoin could play a larger role as a store of value or a reserve asset, I'm open-minded about that. I think that could grow over time.
JULIE HYMAN: Jeremy Allaire, thank you so much. Good to see you.
