FTX Scandal Sparks Increase in USDC Activity: Circle’s CEO
• Jeremy Allaire, co-Founder and CEO at Circle, discussed the silver lining of the FTX scandal at the World Economic Forum in Davos, Switzerland.
• He believes the scandal has made investors wary of risks in the crypto market and incentivized them to look for safe investments, leading to an increase in activity on Circle’s USDC stablecoin.
• Daily transactions with USDC have surpassed those of USDT several times over, due to its regulated and transparent nature, allowing users to verify the company’s reserves through an independent monthly audit.
At the World Economic Forum in Davos, Switzerland, Jeremy Allaire, co-Founder and CEO at Circle, shared his thoughts on the state of the market following the FTX scandal. Allaire believes that the bankruptcy of FTX and ensuing scandal has made investors warier of risks in the crypto market and incentivized them to look for safe ways to navigate digital assets. As a result, Circle has seen increased activity on its USDC stablecoin, even as other similar USD-backed stablecoins have seen a reverse trend.
Allaire believes this is due to USDC’s regulated and transparent nature, allowing users to verify the company’s reserves through an independent monthly audit. Daily transactions carried out with Circle’s USDC on the Ethereum network have seen a significant increase in recent times, surpassing those of USDT several times over. The added confidence in the stability and reliability of USDC has been credited to Circle’s focus on transparency and oversight.
When asked about the potential fallout of the FTX scandal in 2023, Jeremy Allaire confirmed that many companies in the crypto space would not survive due to poor risk management and the inability to raise funds. Despite this, Allaire remains optimistic, believing that the scandal has taught investors to be more wary of risks and to look for safer investments. He also believes that the increased activity on USDC is a testament to the trust that investors have in Circle’s regulated and transparent nature.