As long as money has existed, trust has been essential. It is the primary source of value for fiat currencies. Without trust, money cannot fulfill its historical functions as a store of value, a medium of exchange or a unit of account. When governments, financial institutions, and other key stakeholders in the system behave responsibly and transparently, they instill confidence in the underlying financial system and associated financial assets gain in value.
This is where blockchain-based digital assets have struggled. The deeds of bad actors have soured the view of digital assets for many. Despite these headwinds, the future of digital currencies looks bright as enterprises consider the benefits of this transformative internet layer.
Enterprises are exploring the blockchain
In an earlier chapter of this series, Circle CTO Li Fan shared how enterprises are migrating an increasing share of their data to the cloud. This shift to the cloud shows no signs of slowing. Corporations now store 60% of their data in the cloud, with around 9 in 10 large enterprises adopting a multi-cloud architecture and 76% of organizations worldwide use at least one shared and one private cloud.
Blockchains represent the next phase of this evolution, with the promise of increased efficiency, security and transparency for not just enterprise data, but also financial assets. According to the Forbes Blockchain 50 List, some of the world’s biggest corporations are actively engaging with blockchain and employing a digital asset strategy in 2023. Even traditional financial heavyweights like Goldman Sachs and Mastercard are exploring the technology to improve speed, efficiency, and service delivery.
While enterprises are aligned around the goals of greater operational efficiency, less cost and more data visibility, there are some things they don’t want from blockchain and digital assets, starting with volatility. Stablecoins like Circle’s USD Coin and Euro Coin were created with the express purpose of blockchain-based value transfer without volatility and unpredictable price swings.
Share of the top 100 companies by market cap that are using blockchain
How Circle is Building Trust in USDC
Our business is fairly simple – our customers entrust their dollars to us, and we empower them with internet speed, scale and programmability. When the USDC stablecoin was created in 2018, trust and reliability were among the top objectives.
We developed an approach to building trust in USDC through:
- Structural safety
- Independent oversight
- World-class risk management
These attributes address how digital dollars are reserved and redeemable, how we operate under current US and international regulatory requirements, how we publicly disclose USDC backing and reserve composition, and how we operate in ways that identify and mitigate risk.
We fully understand the importance of building trust in USDC among our customers. This is why our customers can redeem USDC 1:1 for US dollars.
Learn more about Circle’s multi-pronged approach to safety, compliance, and digital currency security in full report “The New Global Operating System for Money”.