Jeremy Allaire, the CEO of blockchain-based, crypto-inclusive money transfer company Circle, said that the firm has long held that major fiat currencies would eventually be tokenized.
Significant digital currencies
In an interview on Aug. 21 on the podcast Global Coin Research, Allaire said that Circle has thought for years that sovereign currencies would eventually be digitized. He stated:
“When we got started with Circle back in 2013, I think our belief has been that there will be significant non-sovereign digital currencies that grow in use and that will be attractive to people for a wide variety of reasons, and Bitcoin obviously being the most noteworthy. But we also have believed that the major reserve currencies of the world, the major trade currencies of the world, would become digital currencies.”
A radical change
Allaire also believes that the world is headed toward a system of cheap, instant monetary transactions with traditional, fiat money — regardless of which countries happen to launch digital fiat money. Moreover, he thinks that this will be a radical change in the way that payment systems, the monetary system and economic interaction at large will work.
Allaire explained that he does not think digital currencies will simply be tokenized via blockchain, but otherwise operate the same as they do now. Instead, he predicts that global money tokens, backed by baskets of reserve currencies, will emerge and become the preferred monetary model.
However, he projects this as the “mid to long-term outcome” of countries’ current endeavors with tokenization. Allaire also believes there are some detrimental factors preventing immediate progress, including issues such as nationalism, trade conflict or even a resurgence of so-dubbed economic mercantilism.
National banks move to issue digital currencies
As previously reported by Cointelegraph, a number of central banks are looking to issue digital currencies. Rwanda’s central bank is one of the latest to indicate its interest, and it joins a long list of other countries including Uruguay, the Bahamas, China, Sweden, Ukraine and the Eastern Caribbean Currency Union.
China in particular appears to be approaching a digital currency launch quickly, with some sources saying that Facebook’s Libra has provided inspiration for further testing.