Circle CEO: Stablecoin grows about 40% annually as banks enter the market

Jeremy Allaire, CEO of Circle, stated that the adoption of stablecoins is accelerating across the global banking system, with a compound annual growth rate of about 40% considered a reasonable baseline as banks transition from testing phases to actual deployment.

Speaking on CNBC in Davos, Switzerland, Allaire concluded that the debate over whether stablecoins should exist within the financial system has ended. The current focus is on deployment timing, integration capabilities, and expanding use cases in payments, capital markets, and tokenized assets. According to him, Circle has discussed with most major banks worldwide about deploying stablecoins operationally, while the volume of USDC continues to increase on payment networks like Visa and Mastercard.

Regarding long-term prospects, Allaire remains cautious about forecasts that stablecoins could reach a scale of over $6 trillion in the next few years. He mentioned that although the supply of USDC has grown by about 80% annually for two consecutive years, Circle projects more sustainable growth at 40% per year, mainly driven by payment and clearing needs rather than speculation.

Meanwhile, legal debates are narrowing around the issue of stablecoin “rewards.” The GENIUS bill bans issuers from paying interest directly to holders but does not prohibit third parties from offering incentives — a concern for banks that fear it could drain deposits from the traditional system. Allaire believes that stablecoins are fundamentally cash payment tools, and the current disagreement revolves around how to design incentive mechanisms, rather than questioning the existence of stablecoins.