Circle chief executive Jeremy Allaire thinks digital currencies will enable the same ballooning transformation for money velocity as the internet did for information publishing and software development.
In a new interview with Empire, Allaire says that the “physics of the internet,” which he defines as the capacity of interconnected computer networks to synchronize states, is allowing people to move value across borders at costs closer to zero.
He mentions Solana (SOL) co-founder Anatoly Yakovenko who said that the goal of the Ethereum (ETH) rival is to enable blockchains to transact at the speed of light.
“The marginal cost of storing and moving value will go to zero. It will go to something approaching zero. And when you have the marginal cost of storing and moving value go to zero, money velocity can really explode…Â
And it’s the exact same thing that happened with the internet.”Â
The Circle executive says that the world will witness a surge in productivity once money moves without friction.
“What happens if money velocity means that the amount of transactions that can happen in the world go up 1,000X from where they are today?
So the transaction volumes that we even talk about with dollars today are actually probably extremely small compared to what they will be when this technology takes hold. And that’s exciting because money moving in the economy is what creates economic value, and it’s one of the reasons why our mission statement as a company from day one has been to raise global economic prosperity through the frictionless exchange of value.
And the idea is that if you can actually take all the friction out of exchanging value – and I don’t just mean payments, I mean more structured forms of value exchange, that’s borrowing, lending, contracts – but if you can take that cost down and increase the efficiency and velocity, you create net new economic output.”
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