You have just announced that Circle will be setting up its European headquarters in Paris. Why Paris and not another European city?
For us, there were several reasons for setting up in Paris. Firstly, there is the ecosystem, which is very dynamic both in crypto, but also in financial services in the broadest sense.
The political will and discourse displayed also played a role. As you know, all the French authorities, right up to the President of the Republic Emmanuel Macron, are very mobilised, and this is an essential point for a company like Circle.
Has there been a direct meeting with Emmanuel Macron or with the Minister of Finance; Bruno Le Maire?
No, not yet, but we are in contact with them. We'll have a strong presence in France over the next few months, and I think we'll have the opportunity to see them at one or more events.
In any case, maybe in France you don't see it that way, but from abroad, France is increasingly seen as a leader in crypto, both in Europe, and even globally.
How are you going to set up in France?
We are obviously going to recruit, although it's difficult to say at the moment how many. In the meantime, we have submitted our application to the AMF to become a PSAN (service provider for digital assets) and also our application to become an electronic money institution. Our vision is to import our digital euro into Europe.
Today, you manage one of the biggest stablecoins on the planet. What is your long-term goal?
There are several ways of looking at things, but I'd like to make it clear that we don't like the notion of "stablecoin", because it covers very different realities. We have nothing to do with stablecoins like Terra Luna's UST. USDC is much more a competitor to Visa, Mastercard or PayPal.
Are you really competitors to Visa and Mastercard?
Yes of course. In areas like Europe, where you lack alternatives to Visa and Mastercard, we can be a solution.
Could you become a competitor to central bank digital currencies?
No, not at all, and it's very funny you should think about it. Central bank digital currencies are first and foremost a response to the Libra project (Meta's stillborn digital currency project, editor's note).
Before 2019 and that project, no central bank had come up with the idea of creating a central bank digital currency. Today, there are more than 120 central banks working on this kind of project.
We are not in any way competing with these types of currencies. Quite the contrary. We simply want to make commercial money, i.e. private money, more efficient.
Will you be offering financial services around the USDC and EUROC, your euro stablecoin launched in 2022?
Our job is not just to ensure the stability of our stablecoins (USDC and EUROC), but also to increase their everyday use.
Today, the USDC is compatible with Visa and Mastercard, and is also integrated into Moneygram. We're in the process of doing the same with our euro stablecoin.
What's in it for financial players to work with you?
It's quite simple: for most financial players, crypto is a nightmare because it's going to disintermediate them. And in a way, they're right to be scared because users might not need them any more. At least in theory.
With us, it's the other way around. We are partners with the banks. In the US, we already have 6 partners like BNY Mellon, which is one of the major US banks. BNY Mellon holds part of our reserves, especially cash, and BlackRock holds another part (sovereign bonds). We are part of a large value chain and we want to do the same thing with the European banks.
What do you think of the lack of clarity in US regulation?
You know, in the United States, we are more the type to respond to crises rather than anticipate them. That's what happened with the Internet: we waited for the bubble to burst in the early 2000s before reacting and establishing rules. The same happened in 2008 with the financial crisis. With crypto, it's the same thing again, and we know it won't be easy...
The USDC has been hit by the collapse of Silicon Valley Bank, which holds part of your reserves ($3.3 billion). The stablecoin lost parity for 48 hours. How can you prevent this from happening again?
Honestly, it's been a difficult experience, but one full of lessons.
For years, all the world's regulators, from the Bank for International Settlements to the Financial Stability Board, have been obsessed with the fear of contagion from traditional finance through crypto. But what we've seen in recent weeks is the complete opposite. Here, it's banks that have impacted the crypto ecosystem, which is still the last straw.
So, yes, we've been affected, but we know how to manage that. It was just a temporary loss of parity. We are still able to repay any dollar.
Could you deposit your entire reserves with a central bank?
It is possible. Today, the USDC is 20% cash and the rest is invested in short-maturity US Treasury bills. We have a very liquid reserve.
The next step will be to be regulated at federal level and potentially to deposit our reserve with the US central bank (Fed).
You stopped the Circle Yield product a few months ago. Why did you do this? Could you relaunch it?
Yield was a good experience for us. We wanted to test this product, the demand, but we launched at a time when the markets were falling, so customers weren't there.
Could you relaunch such a product?
It will all depend on the market context.
A majority of the USDC's reserve is invested in Treasury bills. Could you do the same with the EUROC?
It's possible. Today EUROC only represents 32 million euros, so it's still relatively small. But our ambition is to increase these volumes, in particular by working with European banks.
Are you in discussions with French banks?
Of course, we're in the middle of discussions. But we want to be regulated first before going any further.
