Our Davos Dispatch from Day 2 at WEF23 dives into how Circle is helping to drive the evolution of money to create the frictionless exchange of value.
In his now-classic work, “The Ascent of Money,” historian Niall Ferguson makes an important point about the nature of money. “[M]oney is a matter of belief, even faith,” he writes. “Money is not metal. It is trust inscribed.”
For centuries, the form of this trust has evolved, from clay tablets, metal coins and paper bills to plastic cards and digital entries. Today, the pace of this evolution is accelerating. “Five years from now,” Ferguson posited at an FT Live event with Circle CEO Jeremy Allaire in Davos this week, “you won’t enter credit card numbers on a random website, or use bank notes, or paper checks.”
This dematerialization of money could help pave the way for the fundamental vision that drove Circle’s founding 10 years ago: the frictionless exchange of value.
USDC – the fully-reserved, transparent, regulated, and always-on payment stablecoin issued by Circle – is not just the next form factor of the dollar. It operates on a new kind of financial infrastructure. Think of it as a unified layer for payments, commerce and capital markets built directly into the internet. It can enable financial value to move anywhere, at any time, almost instantly, at less cost, in a permissionless way – so that anyone with an internet connection can access it.
As leaders in the public and private sector adopt this infrastructure, they may also need to expand their understanding of money. The traditional definition of money includes three pillars: 1) medium of exchange; 2) unit of account; and 3) store of value.
According to Circle Chief Economist Gordon Liao, this taxonomy is outdated. “The classic three-pillar definition of money needs a re-evaluation,” he said at an event hosted at Circle’s lounge. “The programmability of money – making money as easy to program as data – will be a key feature of the future of money.”
This programmability via smart contracts doesn’t change the fundamental relationship between debtor and creditor, but it does give money greater intentionality and corruption-resistance. It also opens up promising applications that transcend finance, such as greater visibility into global supply chains. Want to know exactly where your next pair of shoes or plate of seafood comes from? The integration of programmable money with the traceability of blockchain can provide unprecedented clarity into manufacturing and provenance, incentivizing cleaner, greener and fairer standards across industries.
Such macro benefits must be grounded in micro rights, beginning with personal privacy.
Preserving privacy and the integrity of digital identities are twin points that Circle’s executives have been making across Davos. “We don't need governments protecting our data,” Circle CEO Jeremy Allaire said at a World Economic Forum session this week. “We need to own our data, because this represents our digital identities and they've been expropriated from us. We need to get our identities back so that we can manage them responsibly for ourselves.”
