{"id":28451,"date":"2025-11-21T15:36:56","date_gmt":"2025-11-21T15:36:56","guid":{"rendered":"https:\/\/www.macalester.edu\/160-news\/?p=28451"},"modified":"2026-03-16T18:15:43","modified_gmt":"2026-03-16T18:15:43","slug":"banking-on-the-future","status":"publish","type":"post","link":"https:\/\/www.macalester.edu\/news\/2025\/11\/banking-on-the-future\/","title":{"rendered":"Banking on the Future"},"content":{"rendered":"

By Daniel Oberhaus, Photos by Andres Hernandez<\/strong><\/p>\n\n\n\n

When Jeremy Allaire \u201993 testified before the Senate Committee on Homeland Security in November 2013, the fledgling cryptocurrency industry was in crisis. <\/span><\/p>\n\n\n\n

A month earlier, the FBI had arrested Ross Ulbricht, the operator of a notorious dark web marketplace called the Silk Road that had become synonymous with cryptocurrency in the public mind. The site allowed people to buy drugs and other contraband, paying with cryptocurrency to evade detection. A few days after Ulbricht\u2019s arrest, Allaire launched Circle, a company designed to bring cryptocurrency into the mainstream by making it easier to move money between dollars and the dominant cryptocurrency, Bitcoin. <\/span><\/p>\n\n\n\n

Circle\u2019s launch might have seemed like bad timing. But for Allaire, the fear and uncertainty swirling around the cryptocurrency ecosystem had created an opportunity for companies that were willing to work with regulators. He had come to Washington to sell lawmakers on Circle\u2019s vision for the regulated future of digital currency. <\/span><\/p>\n\n\n\n

\u201cI believe that global digital currency represents one of the most important technical and economic innovations of our time,\u201d he told the committee. \u201cAs this technology moves from early adopters into mainstream acceptance, it is critical in my view that federal and state governments establish policies surrounding digital currency.\u201d  <\/span><\/p>\n\n\n\n

Cryptocurrency got its start in 2008 with the launch of Bitcoin, a peer-to-peer digital currency that allowed anyone with an internet connection to transact without going through a regulated central intermediary like a bank or payment process. Allaire was one of the few early crypto entrepreneurs who actively sought regulation\u2014a maverick approach in crypto\u2019s Wild West culture. <\/span><\/p>\n\n\n\n

But, twelve years later, Allaire\u2019s strategy of working with regulators has proven prescient. Circle has become critical infrastructure for the nearly $4 trillion crypto industry and a key player in its mainstream adoption. It processes trillions of dollars in transactions annually and has been adopted and used by major legacy payment platforms like Visa and Mastercard and global financial powerhouses like BlackRock, Robinhood, Stripe, and others. <\/span><\/p>\n\n\n\n

The key to Circle\u2019s success is an innovation in digital money called a stablecoin, a particular type of cryptocurrency that is typically backed by real dollars and is designed to maintain a stable price. The first stablecoin, BitUSD, was released by a pair of programmers in 2014 and promised to make even cross-border transactions as simple as sending an email. For years, internet users have been able to digitize and share music, images, and text. But money could move only via proprietary systems such as wire transfer services and Venmo. Stablecoins change that by allowing people to send money between different payment platforms because they share a common protocol. It\u2019s the same concept that allows emails to be sent and read despite users having different email providers.    <\/span><\/p>\n\n\n\n

At Circle, the company\u2019s stablecoin, USDC, is able to maintain a stable dollar value because it is backed one-to-one with actual cash and Treasury bills held in highly regulated custody. \u201cA stablecoin is essentially a very safe version of a dollar,\u201d says Allaire. \u201cBut it has all these superpowers that we love about internet communication and information access.\u201d<\/span><\/p>\n\n\n\n

Besides making it easier to send money between payment platforms, stablecoins enable billions of people without traditional banking access to participate in the global economy for the first time. \u201cThis is important for the democratization of the financial system and ultimately the ways in which credit becomes available to people and businesses around the world,\u201d says Allaire, who traces the inspiration for Circle to his time at Macalester. \u201cIf it wasn\u2019t for my liberal arts education and my ability to think from an interdisciplinary perspective about society, political systems, and the economy, I couldn\u2019t do what I\u2019m doing today,\u201d he says.<\/span><\/p>\n\n\n\n

Macalester was where Allaire first explored the internet when his first-year roommate connected their dorm room to an early research network that preceded the commercial web. <\/span><\/p>\n\n\n\n

\u201cI was communicating with people behind the Iron Curtain as they were witnessing tanks rolling by during the collapse of the Soviet Union,\u201d he says. \u201cIt blew my mind.\u201d<\/span><\/p>\n\n\n\n

Allaire decided to spend his career working on the technology. In 1995 he and his brother, J.J. \u201991, developed ColdFusion, a web development platform that made it easy for anyone to build dynamic websites and was adopted by companies including Boeing and Target. A few years later, Allaire launched his second company, Brightcove, which gave individuals, content creators, and brands the power to distribute content at the same scale as legacy television networks. <\/span><\/p>\n\n\n\n

Both companies expanded access to tools that had previously been unavailable to most people. With Circle, Allaire applied the same logic to money itself. <\/span><\/p>\n\n\n\n

The company has faced fierce competition from Tether, an offshore rival operating in regulatory gray areas. In 2022, the collapse of crypto projects such as FTX sent shockwaves through the industry, and Circle faced its own crisis when Silicon Valley Bank failed with over $3 billion of the company\u2019s reserves trapped inside, causing USDC\u2019s price to briefly dip below its dollar peg.<\/span><\/p>\n\n\n\n

But those challenges have only validated Allaire\u2019s long-term strategy to advocate for and comply with federal regulation. This summer, President Trump signed the GENIUS Act into law, <\/span>creating the first federal regulatory framework for stablecoins and establishing guardrails such as maintaining 100 percent reserve assets kept in US dollars or similar safe assets. Circle used this regulatory clarity to overtake its rivals and become the dominant compliant stablecoin issuer, growing over 100 percent year over year. Earlier this year, it went public with a $1.1 billion IPO in one of the most successful tech IPOs in recent decades. It was exactly the type of mainstream validation for stablecoins that Allaire had been pursuing for more than a decade. But he sees this as just the beginning. <\/span><\/p>\n\n\n\n

\u201cWhen I was at Mac in the early 1990s and having these visions of the internet, it took twenty years for a lot of those ideas to happen,\u201d he says. \u201cI think we\u2019re in a similar place with cryptocurrency right now, and the transformations are going to be just as significant.\u201d <\/span><\/p>\n\n\n