Circle CEO Jeremy Allaire (the man in charge of USDC) has made a bold prediction about the future of digital assets. In a recent interview, he suggested stablecoins could capture a significant portion of the electronic money market.
Allaire compared stablecoins to online videos. He noted how streaming gradually eroded cable TV's dominance. He believes stablecoins will do the same to bank-held electronic money.
"You have currently a total addressable market of about $100 trillion of legal electronic money," Allaire stated. He added, "Most of that is bank-intermediated electronic money."
Allaire reckons stablecoins will chip away at this market. He cited their "internet-scale utility" and "programmability" as key advantages.
His forecast? In a decade, stablecoins could snag 5% of global electronic money. "That would be extraordinary and seems very achievable," he said.
It's a pretty wild claim. But Allaire's not just blowing smoke. He's got some solid reasoning behind it.
Stablecoins, he argues, will slash transaction costs. They could make moving money as cheap as sharing information online.
"I believe the same principle is going to apply here with blockchain networks and stablecoins," Allaire explained. He predicts the cost of storing and moving value will approach zero.
This cost reduction could be a game-changer. Allaire believes it'll ramp up the velocity of money big time.
As a result, he expects demand for stablecoins to skyrocket. It could even outstrip demand in the current system.
Allaire admits the exact implications are unclear. But he's certain the total addressable market for money will expand. Why? Because "we've restructured the actual economics of how this works."
It's a hefty prediction from a major player in the crypto world. Only time will tell if Allaire's crystal ball is on the money.