ince the advent of bitcoin’s whitepaper, pseudonymously published by Satoshi Nakamoto and released in 2008, the quest for internet native forms of money and the corresponding networks of value transfer have triggered nothing short of a space race for the future of money and payments. For this future to be inclusive and lift all ships through low-friction, high-trust digital financial services, it must be open. A new generation of internet born financial services firms have emerged showing that digital financial services, digital currencies, and radically empowering business models can coexist with strong regulatory and prudential oversight. Circle is precisely such a firm, building the most trusted treasury and payments infrastructure for the internet, including the fastest growing dollar digital currency, USDC.
Espousing an open platform that imports the fundamental resilience and democratization of the internet itself does not come at the expense of the many rules that reign global financial services markets. Rather, if harnessed correctly, the power of digital currencies, public blockchains and the many exponential technologies that ensure financial access does not equate to financial risk, can shine a light on the dark recesses of the global economy where risks are allowed to fester. Backward-looking, opaque, and largely analog approaches to core financial services imperil the system writ large. Or, by today’s standards, preclude extending the perimeter of financial inclusion or enabling new business models, which have left billions of people on the margins of economic access (a human right), and trillions in potential future economic value stranded. The technology that underpins this wave of responsible financial services innovation is long out of beta and what are often dismissed as “novelty use cases” are showing the art of the possible with safe, secure and internet-borne programmable money.
Trusted digital currencies, public blockchains and open-source technology development are catalyzing a wave of breakthrough innovations in payments, financial assets and in combating illicit finance—where for far too long, the favored approach was the heavy-handed redlining of entire continents and regions, rather than micro-targeting bad actors and following illicit money flows in near real time. In a word, an open wave of internet-ready financial services can augment broad public policy goals, rather than erode them. Open does not equal insecure. User-directed payments with no intermediation does not equal more risk. To the right side of lawful, the use of money should be privacy preserving, irrespective of its form and should enshrine a number of first principles espoused by free markets and democracy itself. After all, in free economies, power is granted by the people and the use of money and financial services should be equally empowering.
Real progress has been made in the age of blockchain. We must be steadfast in this endeavor and like the internet before it, which decoupled connectivity and information flows from costly and risk-prone fixed infrastructure, a new generation of digital financial services are decoupling our fundamental right to financial access from cost prohibitive brick and mortar or antiquated business models.
Real progress has been made in the age of blockchain. We must be steadfast in this endeavor and like the internet before it, which decoupled connectivity and information flows from costly and risk-prone fixed infrastructure, a new generation of digital financial services are decoupling our fundamental right to financial access from cost prohibitive brick and mortar or antiquated business models.
Designing first principles into digital financial services and importing sound monetary policy and market conduct from independent central banks into stablecoins and trusted digital currencies, like USDC (now used by some of the most exacting and trusted financial institutions in the world), are adding crucial optionality, competition and reach to today’s financial services. Circle is at the center of this wave of innovation and building on solid public policy and regulatory footing will ensure the safety, soundness, and case for open innovation advances in lockstep and moves confidently around the world.
With nearly 90% of the world’s central banks contemplating some form of digital transformation of their national currencies and corresponding payment rails, the best way to complete and modernize the global financial system is through vigorous, rules-based competition and alignment of public and private priorities. Headlines often betray the level of harmonization that already exists between responsible digital financial services platforms and regulatory and public policy leaders. This betrayal reads in headlines that frame private sector innovations with digital currencies and the advent of central bank digital currencies (or CBDCs in digital numismatic parlance) as a clash or bitter contest for the future of money and payments. The fact remains that in vibrant, free, and competitive economies, most value-added money is in fact privately issued and enjoys strong public sector oversight and alignment. Just as the two-tiered banking system enables the creation of economy growing credit and lending and just as private global value transfer networks have shrunk the world and enabled global prosperity (for those born in the “right” countries or postal codes), privately issued, openly accessible and well-regulated digital currencies show the bridge to the future has already been built.
Whether enshrined on a plastic card that plugs into a global payment network—one such as Visa—or in the form of commercial lending or credit courtesy of the two-tiered banking system, the transformation of money has always tapped private sector ingenuity. The future of money and payments, whether conveyed on cutting-edge technology or on analog rails, will be no different. For fiat money to gain the properties sought after by consumers and required by global markets, a vibrant private sector must continue to innovate and modernize fundamental infrastructure for commerce, value transfer and the enablement of new business models. Blockchain-powered financial services, assets and financial integrity solutions represent exponential opportunities for safe, always on, internet-borne forms of money and value transfer.
For the last decade with the rise of bitcoin and breakthrough innovations made possible by the marriage of cryptography, blockchain and open-source technology standards, a now trillion-dollar asset class has moved from aspirational to operational. These breakthrough innovations add critical on-ramps to the digital economy and are a key path to 21st century economic competitiveness and resilience. If anything, the exacting human and economic toll of the COVID-19 pandemic has shown that the void of digital financial services with national or global scope is a vulnerability exacting the heaviest toll on those who can least afford it. Indeed, historically recession resistant global remittance flows, traditionally a larger sum than foreign direct investment (FDI) and official development assistance (ODA), lost more than $200 billion dollars during 2020 subjecting both the senders and the receivers to potentially perilous and certainly costly physical transactions. By prevailing standards, if an innovation called cash was proposed for regulatory approval, it would likely be declined for its risk-prone nature, opacity and, in the context of a public health emergency, the likelihood it would be a vector for spreading disease. Some countries resorted to physically laundering cash because of fears of spreading COVID-19, while some companies refused to accept it, accelerating a move to digital first, e-commerce and contactless payments.
In the years ahead, extending this circle of digital trust around the world will require deep public-private collaboration, especially on addressing the billion person identity gap, which relegates an unacceptably large share of humanity to the shadows for what is so obviously a birthright. When extended to the internet and access to the comparatively low cost, yet life changing information and services it carries, the void of digital identity and authentication conspires with low connectivity and prohibitive hardware or data costs to preclude ubiquitous, population-scale access to connectivity. Against these stubborn social challenges, Moore’s law, combined with a global entrepreneurial drive of tapping the fortune at the base of the pyramid and continuously reducing the costs of fundamental service, real progress has been made in the age of blockchain. We must be steadfast in this endeavor and like the internet before it, which decoupled connectivity and information flows from costly and risk-prone fixed infrastructure, a new generation of digital financial services are decoupling our fundamental right to financial access from cost prohibitive brick and mortar or antiquated business models. The social, economic, environmental and security imperative of enabling an internet of value to thrive is one of the great opportunities of our times.
a global affairs media network
The Case for Open Technology-Powered Prosperity
April 12, 2021
S
ince the advent of bitcoin’s whitepaper, pseudonymously published by Satoshi Nakamoto and released in 2008, the quest for internet native forms of money and the corresponding networks of value transfer have triggered nothing short of a space race for the future of money and payments. For this future to be inclusive and lift all ships through low-friction, high-trust digital financial services, it must be open. A new generation of internet born financial services firms have emerged showing that digital financial services, digital currencies, and radically empowering business models can coexist with strong regulatory and prudential oversight. Circle is precisely such a firm, building the most trusted treasury and payments infrastructure for the internet, including the fastest growing dollar digital currency, USDC.
Espousing an open platform that imports the fundamental resilience and democratization of the internet itself does not come at the expense of the many rules that reign global financial services markets. Rather, if harnessed correctly, the power of digital currencies, public blockchains and the many exponential technologies that ensure financial access does not equate to financial risk, can shine a light on the dark recesses of the global economy where risks are allowed to fester. Backward-looking, opaque, and largely analog approaches to core financial services imperil the system writ large. Or, by today’s standards, preclude extending the perimeter of financial inclusion or enabling new business models, which have left billions of people on the margins of economic access (a human right), and trillions in potential future economic value stranded. The technology that underpins this wave of responsible financial services innovation is long out of beta and what are often dismissed as “novelty use cases” are showing the art of the possible with safe, secure and internet-borne programmable money.
Trusted digital currencies, public blockchains and open-source technology development are catalyzing a wave of breakthrough innovations in payments, financial assets and in combating illicit finance—where for far too long, the favored approach was the heavy-handed redlining of entire continents and regions, rather than micro-targeting bad actors and following illicit money flows in near real time. In a word, an open wave of internet-ready financial services can augment broad public policy goals, rather than erode them. Open does not equal insecure. User-directed payments with no intermediation does not equal more risk. To the right side of lawful, the use of money should be privacy preserving, irrespective of its form and should enshrine a number of first principles espoused by free markets and democracy itself. After all, in free economies, power is granted by the people and the use of money and financial services should be equally empowering.
Real progress has been made in the age of blockchain. We must be steadfast in this endeavor and like the internet before it, which decoupled connectivity and information flows from costly and risk-prone fixed infrastructure, a new generation of digital financial services are decoupling our fundamental right to financial access from cost prohibitive brick and mortar or antiquated business models.
Real progress has been made in the age of blockchain. We must be steadfast in this endeavor and like the internet before it, which decoupled connectivity and information flows from costly and risk-prone fixed infrastructure, a new generation of digital financial services are decoupling our fundamental right to financial access from cost prohibitive brick and mortar or antiquated business models.
Designing first principles into digital financial services and importing sound monetary policy and market conduct from independent central banks into stablecoins and trusted digital currencies, like USDC (now used by some of the most exacting and trusted financial institutions in the world), are adding crucial optionality, competition and reach to today’s financial services. Circle is at the center of this wave of innovation and building on solid public policy and regulatory footing will ensure the safety, soundness, and case for open innovation advances in lockstep and moves confidently around the world.
With nearly 90% of the world’s central banks contemplating some form of digital transformation of their national currencies and corresponding payment rails, the best way to complete and modernize the global financial system is through vigorous, rules-based competition and alignment of public and private priorities. Headlines often betray the level of harmonization that already exists between responsible digital financial services platforms and regulatory and public policy leaders. This betrayal reads in headlines that frame private sector innovations with digital currencies and the advent of central bank digital currencies (or CBDCs in digital numismatic parlance) as a clash or bitter contest for the future of money and payments. The fact remains that in vibrant, free, and competitive economies, most value-added money is in fact privately issued and enjoys strong public sector oversight and alignment. Just as the two-tiered banking system enables the creation of economy growing credit and lending and just as private global value transfer networks have shrunk the world and enabled global prosperity (for those born in the “right” countries or postal codes), privately issued, openly accessible and well-regulated digital currencies show the bridge to the future has already been built.
Whether enshrined on a plastic card that plugs into a global payment network—one such as Visa—or in the form of commercial lending or credit courtesy of the two-tiered banking system, the transformation of money has always tapped private sector ingenuity. The future of money and payments, whether conveyed on cutting-edge technology or on analog rails, will be no different. For fiat money to gain the properties sought after by consumers and required by global markets, a vibrant private sector must continue to innovate and modernize fundamental infrastructure for commerce, value transfer and the enablement of new business models. Blockchain-powered financial services, assets and financial integrity solutions represent exponential opportunities for safe, always on, internet-borne forms of money and value transfer.
For the last decade with the rise of bitcoin and breakthrough innovations made possible by the marriage of cryptography, blockchain and open-source technology standards, a now trillion-dollar asset class has moved from aspirational to operational. These breakthrough innovations add critical on-ramps to the digital economy and are a key path to 21st century economic competitiveness and resilience. If anything, the exacting human and economic toll of the COVID-19 pandemic has shown that the void of digital financial services with national or global scope is a vulnerability exacting the heaviest toll on those who can least afford it. Indeed, historically recession resistant global remittance flows, traditionally a larger sum than foreign direct investment (FDI) and official development assistance (ODA), lost more than $200 billion dollars during 2020 subjecting both the senders and the receivers to potentially perilous and certainly costly physical transactions. By prevailing standards, if an innovation called cash was proposed for regulatory approval, it would likely be declined for its risk-prone nature, opacity and, in the context of a public health emergency, the likelihood it would be a vector for spreading disease. Some countries resorted to physically laundering cash because of fears of spreading COVID-19, while some companies refused to accept it, accelerating a move to digital first, e-commerce and contactless payments.
In the years ahead, extending this circle of digital trust around the world will require deep public-private collaboration, especially on addressing the billion person identity gap, which relegates an unacceptably large share of humanity to the shadows for what is so obviously a birthright. When extended to the internet and access to the comparatively low cost, yet life changing information and services it carries, the void of digital identity and authentication conspires with low connectivity and prohibitive hardware or data costs to preclude ubiquitous, population-scale access to connectivity. Against these stubborn social challenges, Moore’s law, combined with a global entrepreneurial drive of tapping the fortune at the base of the pyramid and continuously reducing the costs of fundamental service, real progress has been made in the age of blockchain. We must be steadfast in this endeavor and like the internet before it, which decoupled connectivity and information flows from costly and risk-prone fixed infrastructure, a new generation of digital financial services are decoupling our fundamental right to financial access from cost prohibitive brick and mortar or antiquated business models. The social, economic, environmental and security imperative of enabling an internet of value to thrive is one of the great opportunities of our times.
