“Stablecoins are a more powerful innovation than the closed-loop, wallet garden proprietary types of payment systems of the past,” Allaire said Friday on CoinDesk TV’s “First Mover.” “They deserve a greater degree of transparency.”
In recent weeks, a growing number of observers have scrutinized the stablecoin sector over the lack of transparency and are calling for greater insight on the assets backing the digital tokens.
While most of the criticism has focused on Tether’s USDT, the largest stablecoin by market capitalization, its closest rival USDC, which Circle operates, has also been called out for the lack of detail in its monthly “attestations.”
Circle announced Thursday that it is going public via a merger with Concord Acquisition Corp., a special purpose acquisition company (SPAC), in a deal that values the payments infrastructure provider at $4.5 billion. The company projected a USDC circulation of $190 billion by 2023, seven times more than it is now.
When asked Friday why Circle hasn’t provided more information about USDC’s reserves, Allaire said the company has been involved in a complex process for months preparing the Concord transaction.
The parties are required by the U.S. Securities and Exchange Commission (SEC) to file a Form S-4 detailing the proposed merger, he noted, suggesting that more pertinent information would come soon.
“Our intention is to include greater reserves transparency there,” Allaire said.
SEC filings are “the appropriate venue and medium to publish and share that kind of information,” he said.
Allaire also spoke about the possibility of stablecoins challenging the decades-old SWIFT messaging system as a medium of international transactions.
“Dollar digital currencies can transact globally without touching SWIFT and other currencies like bitcoin can transact globally without touching SWIFT,” he said, noting that electronic currency is an invention that goes beyond stablecoins and central bank digital currencies (CBDCs).
“Internet-native money is here, it is growing rapidly and will continue to grow and that’s something that the world has to adjust to,” he said.