Stablecoins are the ‘highest utility form of money,’ but industry is yet to reach ‘iPhone moment’: Circle CEO

Jeremy Allaire, founder and CEO of Circle, the USD Coin (USDC) issuer that went public this month, called stablecoins the “highest utility form of money ever created” in an X post on June 15. He added, however, that the stablecoin industry is yet to experience a significant disruption.

Programmability of stablecoins will usher in change

Allaire’s comments were a response to an X post by Sam Broner, partner at a16z Crypto, who claimed that “stablecoins are better because they encourage competition.”

Broner noted that with fixed and marginal costs of building a fintech becoming lower, now “anyone can program money.” This means competition, which in turn leads to cheaper and better services that are more accessible, he wrote, adding:

“Speed & cost (< 1 second, 1 cent) matter, but it’s the permissionless programmability that’s going to change the market.”

In other words, stablecoins need to provide less than 1 second speed of transactions, and the cost needs to be around $0.01. However, it is the permissionless programmability that will usher in a revolution.

Stablecoin industry has not reached iPhone moment yet

When Apple launched the first iPhone in 2007, it revolutionized the mobile phone industry, triggering a wave of programmable smartphone adoption. The iPhone moment, therefore, refers to a disruptive innovation that pushes the technology towards widespread adoption.

According to Allaire, the stablecoin industry is yet to reach that tipping point, but he foresees it to be “soon.” At that tipping point, “developers everywhere will realize the power and opportunity of programmable digital dollars on the internet,” he noted.

Several members of the crypto community also believe that stablecoins have yet to go mainstream. One X user named Omar wrote:

“Today, stables are more expensive relative to a range of other choices – leaving a subset of customers who they make sense for [sic] (i.e. those without other options).”

Omar added, however, that he expects the cost of stablecoin transactions to “flip over time.” Another user noted that while stablecoin’s proliferation in the payments space dominated by cards has been minimal so far, it has the potential to grab a significant bulk of the market share in the future.

It is worth noting that just last month, Nobel prize-winning economist Paul Krugman said that “stablecoins do not serve any clearly useful function.”

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