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According to the CEO of issuer company of prominent stablecoin USDC Circle, Jeremy Allaire, the institutions involved within traditional finances are in a state of vulnerability given the notion of full-reserve banking systems. The opinion of the Circle CEO came during a recent discussion with a famous Shark Tank investor.
As per the report, Jeremy Allaire was discussing the changes within the financial landscape with Kevin O’Leary, a known Shark Tank investor. Circle CEO says that in comparison to the traditional systems which are used by the banks in tradinila financial systems the new age blockchain technology is mocy more efficient and reliable when it comes to move money from one place to another and to track it.
Allaire says the technology used in moving money to make it slow or fast could be expensive or cheap respectively. But there are a lot of models which are just like the given models which are immensely outdated. Such systems default in terms of keeping track of much such information whereas blockchains act as more transparent, accessible, auditable, real-time, open and publicly available infrastructure.
Further he added that banking giants like JPMorgan and similar institutions seem to be feeling uncomfortable and threatened due to stablecoins. Citing this, Allaire says it explains their discomfort explains their friction in embracing the technology publicly.
Allaire put it in this way that a stablecoin as a payment solution is a representation of cash itself in a token form. This makes it a mixture of cash in vision of the fed and short term treasury bonds of the US government.
He continued that in some ways, this could act as the safest form of digital dollar all across the world. For instance, any commercial bank’s deposit where it is at JPMorgan or any similar entity implies that a bank’s loan and the money lent by the banks and receiving a claim over it are different.
The CEO of USDC backing company thinks that the notion behind full reserve banking systems and dollar payment systems is an immensely strong concept, a concept whose time seems to come. He added that he thinks that this is what is threatening the institutions who have created their payment systems for the fractional reserve lending systems.
Circle announced during August month of last year that it was planning to transform into a full reserve commercial bank. It added that the firm would be working under the United States Federal Reserve’s supervision along with the other agencies that fall under the control of the Treasury Department.
Circle CEO said at the time that they believe that a full reserve banking system, based in the digital currency technology would be more efficient that just being a radical system. It would be a more safe and resilient financial system.
With a background in journalism, Ritika Sharma has worked with many reputed media firms focusing on general news such as politics and crime. She joined The Coin Republic as a reporter for crypto, and found a great passion for cryptocurrency, Web3, NFTs and other digital assets. She spends a lot of time researching and delving deeper into these concepts around the clock, and is a strong advocate for women in STEM.
