Apr 24, 2020
Date: Friday, 10th April
Role: CEO & Founder
By complementing Bitcoin trading, and making it easy to send digital dollars around the world, stablecoins continue to grow in popularity.
Commercial banks operate on a fractional basis, holding only a small % of deposits. During challenging economic times, this can lead to what is known as a run on the bank, where depositors attempt to withdraw their funds.
Unlike fractionally reserved banks, some stablecoins claim to be fully backed, meaning (for example) that for every 1 USDC, GUSD or USDT, the company claims they hold an equivalent $1. Stablecoins come with their risks and trade-offs, from the risk of being hacked to platform dependency.
In a time of economic uncertainty, do stablecoins offer a better saving solution than our banks? And what are the pros and cons of self custody vs the high-interest rate savings accounts?
In this interview, I talk to Jeremy Allaire, the CEO & Founder of Circle, the company behind the USDC stablecoin. We discuss the use case for stablecoins, the benefit of being fully backed rather and the impact on the economy from coronavirus.