Circle CEO refutes stablecoin interest rate risks, advocates for innovative payment solutions

At the recent World Economic Forum held in Davos, Circle CEO Jeremy Allaire made a significant statement, outright dismissing the bank panic narrative that stablecoin interest payments are a threat. According to Foresight News, Allaire vigorously countered market concerns about stablecoins impacting the banking system at the forum, emphasizing that interest payments can actually increase user engagement without undermining the fundamentals of monetary policy.

Misreading Bank Risks and Clarifying the Facts

Allaire compared the interest income from stablecoins to U.S. government money market funds. The latter has grown to approximately $11 trillion, and although there were concerns about its impact on bank deposits, it has not hindered the normal operation of bank lending activities. This analogy clearly illustrates that interest payments themselves are not a threat to the banking system. In fact, as a new payment tool, stablecoins are gradually penetrating various payment scenarios, including innovative payment card solutions, with the goal of improving rather than weakening existing financial infrastructure.

Deep Transformation of the Credit Market

Allaire further emphasized that the U.S. credit system is undergoing a structural shift—from traditional bank-led lending models to private credit and capital markets. Circle has recognized this trend and is committed to developing innovative credit solutions based on stablecoins. Through applications like payment cards, stablecoins can more conveniently connect traditional finance with the digital economy, providing users with seamless cross-border payment experiences.

Payment Infrastructure in the AI Era

Allaire pointed out that stablecoins also possess far-reaching strategic potential—to become the only feasible payment system for billions of AI agents in the future. In an era of explosive growth in AI applications, these autonomous agents will require efficient, transparent, and trustless payment mechanisms. Thanks to their decentralized nature and real-time settlement capabilities, stablecoins are naturally suited to serve this role. Circle’s vision extends beyond traditional payments, aiming to upgrade payment infrastructure into a key foundation for the intelligent era.