Jeremy Allaire: The three pillars of stablecoins' future—AI agent economy, mainstream financial adoption, and groundbreaking user experience

Article: Techub News Compilation

Recently, Circle co-founder, Chairman, and CEO Jeremy Allaire appeared in an interview with the well-known startup incubator Y Combinator. As the issuer of USDC, a stablecoin with a market cap close to $80 billion, Allaire is one of the most influential thinkers and builders in the crypto and fintech fields. During the nearly half-hour conversation, he not only reviewed Circle’s entrepreneurial journey rooted in the grand vision of the “HTTP protocol for money,” but also focused on the future, elaborating on three major trends that will profoundly change the stablecoin industry, and offering unique insights into AI agent economies, global regulatory developments, and emerging market opportunities. This article is organized based on the interview content.

From Internet Infrastructure to the “HTTP Protocol for Money”: Circle’s Entrepreneurial DNA

Jeremy Allaire’s entrepreneurial story began at the dawn of the internet. As early as the 1990s, he was involved in building open networks, distributed computing, and other internet infrastructure, a passion for “internet-native DNA” that has run through his decades-long career. After two successful startups and leading a company to go public, around 2012, Bitcoin and cryptocurrency technology entered his view.

Meanwhile, the 2008 global financial crisis prompted Allaire to deeply consider the nature of money and the operation (or failure) of the international financial system. His academic background in international political economy led him to ask: What is money? How do central banks and fractional reserve banking systems actually operate? Is there a better system?

When blockchain technology represented by Bitcoin emerged, Allaire, as an infrastructure builder, keenly realized that this was a breakthrough in computer science—a missing layer of internet infrastructure. His vision at the time was: to use this technology to build a protocol for the US dollar on the internet, and to run software, programming, and intermediary economic activities on top of it. This was not just about rebuilding the financial system, but about reconstructing a broader economic system natively on the internet.

This is the core idea behind Circle’s founding, and also the prototype of today’s USDC—a “protocol for money” akin to HTTP. Allaire emphasized that, based on his philosophy of money, he believed this foundational layer must be a fully reserved currency, not fractional reserve, to ensure safety. At the same time, it should function like an internet protocol, allowing anyone to connect and build. Although this was not feasible in 2013, the advent of Ethereum made this concept realizable, and ultimately, in partnership with Coinbase, USDC was launched to the market in 2018.

Allaire admits that at the time, the idea of connecting a regulated monetary system with a public computing network (blockchain) as a “hybrid model” was highly controversial, even causing him to be “booed off stage” in many settings, because it clashed with the prevailing “Bitcoin maximalism.”

Current Applications and Future Trends of Stablecoins: Beyond Payment Infrastructure

When asked about the most compelling current use cases, Allaire pointed out that early builders focused on consumer-facing native stablecoin wallets and Visa card bundles, which are still proliferating in many regions worldwide.

But a clear trend is that more builders are shifting toward serving enterprises. They are abstracting functions needed for corporate treasury management and broader payment flows. From giants like Stripe and Ramp to numerous startups focused on cross-border settlement, stablecoins are seen as ideal settlement infrastructure. Additionally, platforms like Y Combinator that use stablecoins for capital formation are increasing.

Allaire highlighted the explosive growth in AI agent payment domains starting last year. He believes we are in a period of massive technological and economic disruption, where countless AI agents will emerge—performing tasks and consuming outputs from other AI agents. Therefore, an agent economy system becomes essential. This is not just about “agents shopping for you,” but a fundamental change in the relationship between labor and capital.

Work will be decomposed into services executed and provided by intelligent agents. In an economy potentially involving billions of agents, there will be a need for contracts and economic execution mechanisms. This is not just about payments or fund transfers, but a transformation in how economic activities are organized. Even from a payment perspective, AI agents will dramatically accelerate economic activity, and the only feasible way to manage this high-speed economy is through stablecoins and blockchain. Circle is designing extensively at the infrastructure level to prepare for this future.

To unlock this agent economy, Allaire believes key infrastructure components include:

Identity verification: “Know your agent” and identity proof are critical.

Dispute resolution mechanisms: Handling failed transactions, disputes, and even arbitration by AI agents themselves.

Insurance markets: Insurance for various outcomes in the agent economy (not just payment fraud) will become vital.

Three Major Drivers Transforming the Stablecoin Industry

At the end of the interview, Allaire summarized three things that will truly change the stablecoin industry in the coming year:

First, the AI agent economy. This is Allaire’s most exciting area. Its importance lies not only in its known impacts but also in the unknown, rapidly evolving possibilities. AI agents will give rise to entirely new paradigms of economic activity and payment needs.

Second, the full adoption by mainstream financial systems. Allaire calls this “more mundane but equally exciting.” After years of effort, stablecoins like USDC are gaining regulatory classification as “cash equivalents” in the U.S., meaning that SEC, CFTC, and banking regulators are beginning to clarify their nature at the federal level. This is opening the door to traditional finance:

• Derivatives markets: CFTC has authorized derivatives exchanges and participants to use USDC as qualified collateral for trading oil futures and other traditional derivatives.

• Systemically important banks: They are starting to use USDC for internal global treasury management and cross-border capital movements, serving as a “pipeline” for internal capital flows.

• Asset managers: Using USDC as a cash layer for creating and redeeming digital assets and tokenized products.

• Foreign exchange settlement: Banks are using stablecoins for intraday FX operations between major currencies, addressing the limitations of current currency settlement systems, reducing settlement times from T+3 to instant or next-day.

These developments mean stablecoins are deeply penetrating core areas of capital flow, risk management, and market building. The potential market size is not only trillions of dollars in currency supply but also the vast utility of all these activities that rely on money.

Third, breakthrough user experiences. Allaire predicts that in the future, truly beautiful, simple, seamless user experiences will emerge—making using stablecoins feel no longer like using a “cryptocurrency app.” These revolutionary UX breakthroughs will find product-market fit and drive growth.

Global Regulatory Landscape and Opportunities in Emerging Markets

Regarding global regulation, Allaire provided a key background: about five years ago, the G20, through the Financial Stability Board, began formulating stablecoin policy recommendations. Japan was the first country to enact specific regulations, followed by Europe, Singapore, Hong Kong, the UK, and the UAE. The U.S. was actually a latecomer. In 2021, the President’s Working Group on Financial Markets issued recommendations, but only recently has federal legislation been passed.

Due to the dominance of the US dollar in stablecoins, U.S. legislation is prompting other regions to reevaluate their regulations. Currently, not only G20 countries but many emerging and developing markets are establishing stablecoin rules. Allaire predicts that over the next two to three years, many laws regarding stablecoins will be enacted worldwide, and through coordination mechanisms like the G20 and efforts in key markets, various interoperability and mutual recognition frameworks will be created, enabling stablecoins to operate under relatively consistent rules.

When asked about promising regions, Allaire pointed out that Southeast Asia (including Hong Kong) and Latin America are very active. In Latin America alone, hundreds of startups are building new products around stablecoins. These regions’ businesses and individuals have a strong desire to use digital dollars as operational capital and stores of value, even if they still need to convert to local currencies to meet payment obligations.

Allaire concluded by saying that the story of stablecoins is far from over. They are transitioning from early consumer-driven and “behind-the-scenes stablecoin sandwich” models to large-scale enterprise and institutional adoption, and will play a central role in the AI-driven future economy. For global builders, a new era of stablecoins—characterized by clear regulations, robust infrastructure, and limitless innovation—is beginning.