The excitement and international scrutiny that surrounded Facebook’s Libra announcement last month suggests that cryptoassets have come of age and are here to stay, said Jeremy Allaire, chief executive of Circle on Wednesday, July 3.
But shouldn’t Bitcoin have fallen like a rock following Facebook’s news that it was to launch its own cryptocurrency next year? A strong rival to Bitcoin’s dominance of the cryptocurrency market should have had a negative impact on the BTC price.
Instead, June was the strongest month for Bitcoin since December 2017.
Facebook Entering the Market
Allaire, who co-founded peer-to-peer payments technology company Circle in 2013, said on Wednesday's edition of Squawk Box on CNBC that he believes the addition of a rival from such a large player as Facebook, only adds legitimacy to digital assets and is endemic of their growth.
He said that the crypto industry – powered by blockchain technology – continues to grow and has already moved from just 10s of millions of users to 100s of millions of users in a decade.
I think the excitement around Libra is obviously – do we go from 10s or 100s of millions of users to billions of users? People will be asking: do I want something that's provided by a consortium led by Facebook or do I want something that's more open and free to use on the internet?
The interest that this debate is driving – with potential consumers, regulators, central bankers and treasury officials around the world – is what’s been driving the price of Bitcoin and its peers during the past month, Allaire added.
Reaction From International Officialdom
And as for the policy attention surrounding Facebook’s Libra launch: “I think it’s outstanding that we finally have international scale focus on crypto,” he said, as crypto has been an issue that has previously been on the sidelines and policymakers dismissive of it.
What's very clear now is that cryptocurrency is here to stay. It's going to be massive scale and will play a fundamental role in the transformation of the economic system as we build a digital-based economy.
And he had a message for those policymakers who continue to sit on the sidelines:
We need to listen and learn from the innovators because the technology is moving at an incredible pace. Now is the time for policymakers to learn, because this is a major breakthrough in the global economy.
Crypto critics, of course, argue that Bitcoin and its rivals are yet to make the real breakthrough into being used as a substitute for fiat currency, as they are yet to prove themselves as efficient methods of exchange or reliable stores of value.
“When will I be able to pay my taxes with Bitcoin?” asked Kevin O’Leary, a venture capital investor and fellow panelist on CNBC.
Maybe sooner than you think if Facebook continues to build partnerships for its Libra project. But Allaire was unflustered, calling the rise of crypto-assets a “major cultural and infrastucture shift.
It's a megatrend that will be larger than the web and will ultimately be the foundation of pretty much every major financial transaction that's traded in the world.