Author: Compiled by Techub News
Recently, Circle co-founder, Chairman and CEO Jeremy Allaire was interviewed by renowned startup incubator Y Combinator. As the issuer of USDC, a stablecoin with a market cap of nearly $80 billion, Allaire is one of the most influential thinkers and builders in the crypto and fintech space. In the nearly half-hour conversation, he not only reviewed Circle's entrepreneurial journey starting from the grand vision of "the HTTP protocol for money," but also focused on the future, elaborating in detail on three major trends that will profoundly change the stablecoin industry. He also provided unique insights into the AI agent economy, global regulatory progress, and emerging market opportunities. This article is compiled based on the interview content.
From Internet Infrastructure to "the HTTP Protocol for Money": Circle's Entrepreneurial DNA
Jeremy Allaire's entrepreneurial story began at the dawn of the internet. As early as the 1990s, he was involved in building internet infrastructure such as open networks and distributed computing. This obsession with "internet-native DNA" has run through his decades-long career. After two successful entrepreneurial ventures and taking companies public, around 2012, Bitcoin and cryptocurrency technology came into his view.
Meanwhile, the 2008 global financial crisis prompted Allaire to delve deeper into the nature of money and the functioning (or malfunctioning) of the international financial system. His original academic background in international political economy led him to ask: What is money? How do central banks and fractional reserve banking actually work? Is there a better system?
When blockchain technology, represented by Bitcoin, emerged, Allaire, as an infrastructure builder, keenly realized this was a breakthrough in computer science, a missing infrastructure layer on the internet. His vision at the time was: to use this technology to build a protocol for the US dollar on the internet, and on top of it, run software, program, and intermediate economic activity. This was not just about rebuilding the financial system, but about natively rebuilding a broader economic system on the internet.
This is the core idea behind Circle's founding, and the prototype of today's USDC—an "HTTP protocol for money." Allaire specifically emphasized that, based on his philosophy of money, this foundational layer must be full-reserve money, not fractional reserve, to ensure its security. At the same time, it should function like an internet protocol, allowing anyone to connect and build upon it. Although this was not feasible in 2013, the emergence of Ethereum allowed this concept to materialize, ultimately leading to the launch of USDC in 2018 in partnership with Coinbase.
Allaire admitted that at the time, the idea of a "hybrid model" connecting the regulated monetary system with public computing networks (blockchains) was highly controversial, even getting him "booed off stage" in many settings, as it ran counter to the prevailing "Bitcoin maximalism."
Current Applications and Future Trends of Stablecoins: Infrastructure Beyond Payments
When asked about the most compelling current use cases, Allaire noted that early on, many builders focused on consumer-facing native stablecoin wallets bundled with Visa cards, and such applications continue to proliferate in many parts of the world.
But a clear trend is that more and more builders are turning to serving enterprises. They are abstracting the functions needed for corporate treasury management and broader payment flows. From large companies like Stripe and Ramp to numerous startups focused on cross-border settlement, stablecoins are seen as ideal settlement infrastructure. Additionally, platforms like Y Combinator are increasingly using stablecoins for capital formation.
Allaire specifically highlighted the AI agent payment field, which exploded starting last year. He believes we are in a period of massive technological and economic disruption, where a vast number of AI agents will emerge, both performing work and consuming the output of other AI agents. Therefore, an agent economy system becomes essential. This is not just about "agents shopping for you," but a fundamental shift in the labor-capital relationship.
Work will be broken down into services executed and provided by intelligent agents. In an economic environment potentially involving billions of agents, contracts and economic enforcement mechanisms are needed. This is not merely about payments or moving money; it's a transformation in the organization of economic activity. Even from a payment perspective alone, AI agents will cause an explosive increase in the speed of economic activity, and the only viable way to manage this high-speed economy is with stablecoins and blockchains. Circle is doing a lot of design at the infrastructure level to prepare for this future.
To unlock this agent economy, Allaire believes the key infrastructure that needs to be supplemented includes:
- Identity Verification: "Know Your Agent" and identity proof are crucial.
- Dispute Resolution Mechanism: Handling transaction failures, disputes, etc., potentially even arbitrated by AI agents themselves.
- Insurance Markets: Insurance markets for various outcomes in the agent economy (not just payment fraud) will become critical.
Three Major Drivers Transforming the Stablecoin Industry
At the end of the interview, Allaire summarized three things that will truly change the stablecoin industry in the coming year:
First, the AI agent economy. This is the area Allaire is most excited about. Its importance lies not only in its known impacts but also in its unknown, rapidly evolving possibilities. AI agents will give rise to entirely new paradigms of economic activity and payment demands.
Second, full adoption by the mainstream financial system. Allaire calls this "more mundane but equally exciting." After years of effort, stablecoins like USDC are gaining regulatory classification as "cash equivalents" in the U.S., meaning the SEC, CFTC, and banking regulators are beginning to clarify their nature at the federal level. This is opening the doors to the traditional financial world:
- Derivatives Markets: The CFTC has authorized derivatives exchanges and their participants to use USDC as eligible collateral for trading traditional derivatives like oil futures.
- Global Systemically Important Banks: Starting to use USDC for internal global treasury management and cross-border capital mobilization, as a "pipeline" for their internal capital flows.
- Asset Managers: Using USDC as a cash layer for creating and redeeming digital assets and tokenized products.
- Foreign Exchange Settlement: Banks using stablecoins for intraday FX operations between major currencies to achieve continuous risk movement that existing currency settlement systems cannot, compressing settlement times from T+3 to instant or next-day.
Third, breakthrough user experiences. Allaire predicts that truly beautiful, simple, and seamless user experience products will emerge, making using stablecoins feel less like using a "crypto app." These breakthrough UX experiences will find product-market fit and achieve growth.
Global Regulatory Landscape and Emerging Market Opportunities
Regarding global regulation, Allaire provided a key context: about five years ago, the G20, through the Financial Stability Board, began formulating stablecoin policy recommendations. Japan was the first country to enact specific regulations, followed by Europe, Singapore, Hong Kong, the UK, the UAE, etc., with the U.S. actually being a latecomer. The U.S. made recommendations via the President's Working Group on Financial Markets in 2021, but only recently passed federal laws.
Due to the dominance of the US dollar in stablecoins, U.S. legislation is prompting other parts of the world to re-evaluate their own regulations. Currently, not only G20 countries but also a large number of emerging and developing markets globally are formulating stablecoin rules. Allaire predicts that in the next two to three years, we will see a large number of laws regarding stablecoins enacted around the world, and through coordination mechanisms like the G20 and efforts in key markets, various forms of interoperability and reciprocity frameworks will be created, allowing stablecoins to operate under relatively consistent rules.
When asked which regions he is bullish on, Allaire pointed to Southeast Asia (including Hong Kong) and Latin America as areas with very concentrated activity. Just in Latin America, there are hundreds of startups building new products around stablecoins. Businesses and individuals in these regions have a strong desire to use digital dollars as working capital and stores of value, even though they may still need to convert to local currency to fulfill payment obligations.
Allaire concluded that the story of stablecoins is far from over. It is moving from early consumer-driven and "behind-the-scenes stablecoin sandwich" models towards mass adoption by enterprises and institutions, and is about to play a core role in the AI-driven future economy. For builders globally, a new era for stablecoins, defined by clear regulations, powerful infrastructure, and unlimited innovative use cases, is dawning.
