Digital Currency and the Evolution of Money

Executive Insights

The dawn of the utility phase

The rise of digital currency beginning with Bitcoin’s launch in 2009 has taken the world by storm. But the past decade’s focus on price speculation and boom-and-bust volatility have distracted attention away from what we feel are the most promising aspects of this major breakthrough in money and technology. 

In our view, digital currencies and the blockchains on which they travel offer unparalleled utility as a new, unified infrastructure for payments, commerce and capital markets built directly into the internet. 

Together, they lay the foundation for a new “internet of money” that bypasses today’s fragmented, outdated settlement systems that impose trillions of dollars in costs per year and immeasurable delays on people and businesses around the world. 

This new internet of money enables financial value to move anywhere, at any time, almost instantly, at less cost, in a permissionless way so that everyone with an internet connection can access it. 

As more businesses and institutions recognize the transformative cost and speed benefits of internet settlement, we expect more existing payments, commerce and trading will shift to this new layer. This could help to release trillions of dollars in trapped value and unleash major changes that eventually spread throughout society. 

Within a few years, these changes could begin to transform the broader economy in ways that resemble what took place during the rise of the original internet in the late 1990s and early 2000s as millions of people — and then billions — gained access. 


All of these trends could accelerate the next wave of “software eating the world,” as Marc Andreessen wrote in 2011 about the way the original internet disrupted books, music, video, advertising and other industries by making them faster, cheaper and easier to consume and operate while reducing barriers to entry 2.


Revenue decreases in traditional industries, 2002-20203


To put the opportunity in perspective, we think digital currencies and blockchains could begin eating significant portions of the $35 trillion market for global payments4 and the $130 trillion M2 money supply5, just as previous internet iterations devoured many legacy industries through digitized creative destruction.

The tokenization of everything

While immense, today’s financial flows are just the start of what we think this new internet layer could eventually subsume. Past internet history is not only marked by the radical reshaping of existing industries, but also by the creation of entirely new business models that weren’t possible – or even conceivable – prior to the advances in tech and connectivity.

One of the biggest blockchain breakthroughs is that it enables “real-world” assets like houses, cars, office buildings, factories, concert tickets, customer loyalty points, stock certificates and countless others to be represented online as uniquely identifiable digital tokens. These tokens can make it easy to track, transfer and store ownership proof of the corresponding assets online in a digital wallet. 

Embedding ownership of these assets onto the internet — directly alongside their accompanying financial flows — could open up a potential future where almost anything can be tokenized, financed and traded by anyone, anytime, anywhere, all without the need for traditional financial intermediaries (in Part 3 of this series, we go deeper into how the decentralized nature of blockchain makes this possible).

This new world of tokenized finance can effectively reduce the settlement time for friction-filled transactions like property sales from months down to just seconds (see Part 5 of this series for a deeper look at today’s nascent tokenized markets). 

In its early state today, most tokenized commerce revolves around digital art. But we see a strong potential for tokenization to create deeper market liquidity and greater transparency for many types of real-world assets that are historically illiquid and opaque.

As the physical and digital worlds converge across this 24/7, permissionless, blockchain-based financial internet layer, the business opportunities could be truly immense.

The stablecoin breakthrough

Stablecoins, discussed in-depth throughout this series, are a major key to unlocking this potential future on a global scale. They have enabled dollars and other government-issued currencies to finally migrate online, just as most other forms of data have already done throughout the past few decades. 

This true digitization of usable money means it can travel like email, text messages and video files— ubiquitously, globally, almost instantly and with less expense. 

Paired together, stablecoins and blockchains represent a significant evolution in the history of money that can bring the scale and speed benefits of the internet to today’s global payments realm and unleash a potential future where both finance and real-world assets are broadly tokenized. 

Traditional businesses, multinational corporations, individual merchants, governments, blockchain-native companies, institutional investors and billions of people globally could benefit from this faster, more inclusive financial system. 

How it could play out

In 1995, no one dreamed of streaming a movie on a mobile device while riding a subway or walking through a crowded city. Yet for countless people around the world, it’s now impossible to imagine daily life without it. 

Today we’re on the cusp of a similar leap in regards to what’s possible with money, now that it exists as internet data. The next FAANGs are already hard at work creating a new generation of internet services and apps that will reshape our lives in ways we can only begin to imagine. Digital currency and ubiquitous internet availability are fueling a future where money can be made to do practically anything, anytime.


The evolution of Amazon6


All info in footnote 6 from CNN, except where noted


While widespread adoption will likely play out over a number of years, many major payments use cases are primed for disruption right now, including merchant and supplier payments, global remittances and settlement of financial asset trades (see Part 4 and Part 5 for a deeper look). 

Businesses can use this technology to stream payroll in real time to employees. Homebuyers and sellers can instantaneously sell and settle residential property transactions. Artists and musicians can create ownership contracts that automatically entitle them to a share of secondary market sales. International suppliers can receive cross-border payments almost instantly and cheaply, providing crucial working capital to keep global supply chains running smoothly. A coffee shop can get paid irrevocably in near-real time, and without interchange fees eating up several percent of sales. Institutions can trade tokenized versions of real government-issued assets on-chain, with the trades finalized in moments rather than multiple days later.

These scenarios all represent the release of value and productivity that are needlessly trapped by antiquated settlement technology. They could become commonplace in the near future, just as mobile push notifications have unshackled the news from its legacy forms so that it can reach people in seconds on a smartphone screen, instead of a day later on the front porch. 

And these scenarios could all happen in a permissionless, trusted way through apps where the counterparties can securely verify their identities using decentralized credentials — without disclosing personally identifiable information.

This could be just the start. Most digital currencies and blockchains are open-source and programmable, which provides businesses and developers with entirely new levels of creativity. Despite the slowdown, developers armed with $50 billion in recent venture funding8 are accelerating this major evolution in how economic value is created, transacted and stored globally, and their products and services are likely to blow our minds in ways we can’t yet anticipate, much as the idea of mobile streaming movies would have back in 1995.  

Where Circle fits in

Circle is a financial technology company at the epicenter of these massive changes. Our mission is to increase global economic prosperity through the frictionless exchange of value. We are dedicated to using the breakthroughs of this next internet layer to help money flow freely, making the world more equitable and prosperous. 

In 2018, we launched USD Coin (USDC), a programmable stablecoin that has grown past $40 billion in circulation as of January 16, 2023. Because it is widely trusted and easy to work with, USDC is powering many of the rapid developments in internet-native finance. USDC is emerging as the next form factor of the U.S. dollar as it evolves beyond banknotes and legacy electronic money that only circulates on a closed loop among traditional financial intermediaries. 

The emergence of stablecoins like USDC means this evolution could quickly reach mass adoption, just as the birth of the smartphone and the global embrace of mobile took the desktop internet era to new heights. We think this future is inevitable, and we’re committed to making these benefits widely accessible for businesses everywhere.


USDC growth over time


For many business leaders, the world of digital assets consists of little more than coins with dog faces and cartoon monkey pictures. This article series is designed to help you look beyond the hype, differentiate the meaningful innovation from the ephemeral noise and prepare for this major turning point in the evolution of money and the internet.

Throughout the next four articles, we take you through many aspects of this unique moment so you can evaluate the opportunities as the traditional and digital asset economies converge. We explain where blockchains fit in the broader history of the internet, how to obtain and store stablecoins and other digital currencies, ways to use them for B2B and merchant payments, how they are rewiring capital markets and other essential concepts. 

First, let’s take a closer look at how USDC transforms regular bank dollars by equipping them with the cost and speed superpowers of the internet.

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