Circle CEO Says Tokenized Fiat Currencies Are on the Horizon

Jeremy Allaire, the CEO of blockchain-based, crypto-inclusive money transfer company Circle, has said that the firm has long believed major fiat currencies will 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 go digital. He added:

“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 interactions 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 current endeavors with tokenization. Allaire also believes there are some detrimental factors preventing immediate progress, including issues such as nationalism and trade conflicts.

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 and Ukraine — as well as 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.