Circle CEO Hints How AI and Crypto Ledgers Can Drive GDP Growth

In the debate bordering on the factors that may drive the growth of US Gross Domestic Product (GDP), Circle CEO Jeremy Allaire has spotted the role of AI and crypto. Though many proponents had highlighted on many occasions what role both technologies play in this regard, Allaire dove in deeper.

AI and Crypto Can Amplify Value Movement

At the core of the take from Jeremy Allaire is the movement of value in the economy. He believes the push by Central Bankers to lower interest rates in a bid to boost the economy might not work under currently digital climate.

He believes lowering interest rate have its advantages including reducing the cost of borrowing. This might in turn spur industrialists to land more capital to build new products that can trigger economic boom. However, Allaire noted this model may not necessarily work as there are other factors that might interfere with its success.

This morning’s DealBook from @andrewrsorkin laid out the pros/cons on whether AI would contribute to global GDP growth over the next decade. I’m not going to weigh into that specific debate, but it prompted me (you catch that?) to share what I do think will materially increase…

— Jeremy Allaire – jda.eth / jdallaire.sol (@jerallaire) July 13, 2024

On the other hand, he pointed out that AI and crypto innovations like digital ledgers, compute, proofs and credentials can introduce efficient risk intermediation. He said a globally efficient financial system has what it takes to “provide the foundation for dramatic economic expansion, and, in theory, should contribute MORE to global GDP growth than a given specific technology improvement such as AI.”

Crypto innovators, including stablecoin issuer Circle, are building solutions that can amplify these financial system. To Allaire, the integration of AI into almost all sectors is a strength that crypto can use to make crucial changes.

The Regulatory Constraints

Already, there’s a wide proliferation of AI and crypto innovations around the world. Despite their role in boosting finance, trade and market health, regulatory constraints still abound.

Many regional governments are making the push to circumvent this bottleneck. The European Union for instance is in the implementation phase for the Markets in Crypto Assets (MiCA) regulation. Under the MiCA law, many stablecoins like Tether (USDT) are not supported, forcing some platforms like Kraken to cut support for such tokens.

Jeremy Allaire’s Circle, however, has secured a very important license that might advance the role of USDC and EURC stablecoins in the region. The projections that AI and Crypto will fuel GDP growth might take time, but at current level of innovation, he believes it is inevitable.

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