Circle CEO Says Crypto Is a “Much More Significant” Innovation Than the Web
01.10.2019

The Reddit AMA is this week’s crypto publicity stunt. Just ask the Winklevii, who held one on Monday as part of their latest Gemini marketing push. Or the cofounders of Circle, Jeremy Allaire and Sean Neville, who took to Reddit this morning to discuss their 2018 accomplishments.

Besides linking to a Medium post about their self-described success last year, Allaire and Neville’s AMA announcement also gives users a handy list of topics to discuss, which look like a carefully crafted PR email (indeed, the PR email about the AMA includes nearly the same copy). There are many bullet points, since Circle is a wide-ranging crypto company. It has an investment platform, a Venmo-like payment app, a trade desk, a large exchange (Poloniex, which Circle bought in February 2018), and a stablecoin (USDC). Last year, Circled reported $24 billion in trade volume and 10,000 OTC trades. Circle’s cofounders made sure to mention all of this in their AMA introduction.

While a clear promotional move, the AMA did prompt some good questions from Redditors and left readers with some interesting points. Neville did not appear to contribute, but both Allaire and a  number of Circle other and Poloniex colleagues chimed in. Here are a few highlights:

How did Allaire get into crypto in the first place? The former CEO of video service Brightcove says he’s been thinking about decentralization and how it could “dis-intermediate governments and media companies and create a radically more open and connected global society” since the ‘90s. “In my view, crypto is a much more significant and disruptive innovation than the web, and its impact on society, politics, economics, governance will be far, far greater for humanity over time.”

In response to a question about the biggest regulatory hurdles Circle faces, Allaire pointed to the “lack of specific guidance from the SEC on how to classify various crypto assets.” While Circle and other companies involved in cryptocurrency trading may see clear lines between commodities, currencies, and securities, that’s legally meaningless without an official distinction from the government.

A few people asked about how regulatory rules apply to privacy coins like Monero, but no one got a clear answer. However, chief compliance officer and head regulatory counsel for Circle, Robert Bench, wrote in the AMA, “The use of privacy coins is one factor that we may use in the risk assessment of our customers, and their use may require enhanced due diligence from our risk and compliance teams. While these blockchains are opaque now, I wouldn’t underestimate the ability of smart industry and government participants to find solutions to provide transparency on these coins.”

On buying the USDC stablecoin using credit cards, a Circle rep wrote that the company is “exploring various options for connecting traditional fiat rails to crypto rails, especially to USDC.” Again, regulation comes up as an obstacle to making this happen expediently.

One intuitive Redditor asked whether Circle is accruing interest from the U.S. dollars they’ve deposited to back USDC and whether customers are seeing any of that money. Patrick Corker, head of treasury at Circle, responded that yes, they do receive interest, and no, customers don’t see it—but the Circle team is “actively discussing ways” to change that.

Blockchain and cryptocurrency as a safe haven from digital censorship was a hot topic in 2018 (and will likely continue to be this year), particularly for people and groups associated with the “alt-right.” Asked if he believes that “crypto will play a role in defeating online censorship,” Allaire responded “We are not far away from a world where it will be possible to ‘print’ text and rich media into forms that can’t be censored… So, yes, I absolutely believe that crypto will play a role in defeating online censorship, but I also believe there are serious and challenging social governance questions that emerge in a world such as this and they are non-trivial.”

Lastly, for longtime Poloniex users who miss the exchange’s “trollbox” (a now-defunct live chat on the platform), there’s a possible light at the end of this trollbox-less tunnel. According to Poloniex rep Christina Pawlikowski, bringing back the trollbox is “something we’re actively exploring.”