Circle CEO Jeremy Allaire – “More Insolvencies Likely In 2023”
Circle CEO Jeremy Allaire on Tuesday said the crypto market will witness more insolvencies in 2023 as companies continue to struggle in the early. However, he remains optimistic about technological developments in the market and an uptick in the crypto adoption rate in 2023 due to progress in regulatory frameworks and rules.
More Insolvencies in 2023, But Outlook Remains Optimistic: Circle CEO
During the World Economic Forum in Davos, Circle CEO Jeremy Allaire on January 16 said crypto contagion will continue to impact the crypto market in 2023 as crypto companies and businesses will struggle to raise capital or survive.
He believes heightened scrutiny from regulators and law enforcement agencies put more challenges on some players and may cause distress for the crypto market. However, he remains optimistic about the crypto market in 2023, with regulations positioning cryptocurrencies in focus.
While regulating the crypto market will take time, the crypto market will learn to differentiate between good players and bad players.
Jeremy Allaire asserts that 2023 is about innovations happening on Layer-1 blockchain, Layer-2 scaling solutions, and new technologies for privacy, security, and identity. The crypto market will not see technological innovations slowing down.
Commenting on the impact of USDC on the economy and markets, Allaire mentioned the release of the “State of the USDC Economy” report. The report highlights USD Coin‘s (USDC) prospects in the payments industry and becoming part of the M2 money supply in the future.
According to the report, Circle backs USDC with U.S. dollar assets, with 80% reserves held in 3-month U.S. Treasuries and 20% in cash held at banks. By January’s end, Circle will move reserves into the Circle Reserve Fund, which is 100% owned by Circle, managed by BlackRock, and custodied by The Bank of New York Mellon.
Crypto Regulations in 2023
Major markets such as the U.S. need statutory definitions of digital assets to provide regulatory clarity for the crypto market. The U.S. Congress will proceed with signing several digital assets bills in 2023, resolving the crypto jurisdiction dispute between the SEC and the CFTC.
Meanwhile, European Union will take the final decision on the Markets in the Crypto-Assets (MiCA) bill in April. However, the MiCA rules will not come into effect until 2024, but will increase crypto adoption in the region.
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