Jeremy Allaire talks USDC, multi-chain support and new stablecoin guidance

Circle's Jeremy Allaire has spent decades at the cutting edge of technology. 

Before building crypto payments firm Circle, he launched a company during the heady days of the early Internet, dubbed Allaire Corporation, to create development software for the nascent Web. To build out Centre's USDC, Allaire is taking a leaf out of that playbook: interoperability.

"You couldn't just use the Web on Windows," Allaire said in an interview. "We need more and more support for USDC on different blockchains."

Centre recently announced that Algorand would be available alongside Ethereum as a blockchain it would support to better scale USDC. Already, the supply of the stablecoin has surpassed $2.4 billion, making it the second-largest behind ecosystem behemoth Tether. The token's supply has increased by 362% over the course of the last year, as shown in the chart below:

Source: Coin Metrics, The Block Research

In an interview with The Block, Allaire declined to comment further on how many blockchains USDC would support in the near-term, but he said the overarching goal of the project is for it to be a protocol that works across different blockchains. USDC is not alone in taking such an approach — Tether supports an array of blockchains, including Tron, Ethereum and Solana. 

Still, Circle is launching a cross-chain token swap facility. The service would allow a developer, for instance, to connect to Circle's APIs and seamlessly move their USDC between different chains — to start, between Algorand and Ethereum.

To date, much of the growth of USDC has been fueled by trading use cases and decentralized finance. Crypto users can park their USDC on decentralized and centralized platforms in the pursuit of token yield, for example. Moving forward, Allaire expects more adoption of crypto-dollars among FinTech firms and banks. Recent guidance from the Office of the Comptroller of the Currency could hasten that adoption.

On Monday, the U.S. regulator said national banks and federal savings associations can hold reserve funds for some stablecoin issuers — specifically, those that back their tokens one-to-one with fiat-denominated reserves. To be sure, banks have already been involved in stablecoin activities. USDC relies on Bancorp to hold the reserves tied to USDC, for example.

Still, Allaire said the news is a good branding moment for crypto-dollars, effectively signaling to the broader markers that they are a "significant innovation as a major building block for financial market participants."

"For a lot of banks, you can run it up the flag pole and compliance is like, 'I don't know if we can touch this stuff,'" he said. "And they are not going to do anything until they know it is OK."

As stablecoins grow, entities like USDC and Libra will need more banking partners in the market.

"What does it look like when you have a more meaningful payment rail, when you have tens of billions of stablecoins," he said. "The capacity to hold those reserves has to grow."