The CEO of the company behind USD Coin (USDC) says that traditional financial institutions feel vulnerable to the idea of full reserve banking systems.
In a new discussion with Shark Tank investor Kevin O’Leary, Circle CEO Jeremy Allaire says that blockchain is much more efficient than the systems banks use to move and track money.
“The technology that makes money move slow or fast or expensive or inexpensive is very similar to these incredibly old fashioned models of keeping track of this information and blockchains are much more open, accessible, transparent , auditable and real. -time, publicly available infrastructure.”
Allaire says that banks like JPMorgan or other large institutions are likely to be threatened by stablecoins, which he says could explain why they are hesitant to adopt them publicly.
“A payment stablecoin, which is essentially like a token representation of cash, which is essentially a mix of cash in short-term and federal government treasury bonds.
In some ways it would be the safest digital dollar in the world whereas a deposit in a commercial bank whether it’s JPMorgan or anyone else is a loan to the bank and the bank lends the money and you have a claim on that but is different.
I think the idea of full reserve banking and full reserve dollar payment systems is a really powerful concept whose time has come and I think it threatens the institutions that have built their payment systems around reserve lending fractional”.
In August of last year, Circle Announced its plan to become a full commercial reserve bank under the supervision of the Federal Reserve and agencies run by the US Department of the Treasury.
“We believe that full reserve banking, based on digital currency technology, can lead to not only a radically more efficient financial system, but also a more secure and resilient one.”
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