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Bitcoin will be part of the global banking order, says Circle CEO

The future of bitcoin will be determined by central banks, standards bodies and corporate contributors. That’s the view of entrepreneur Jeremy Allaire, who used a Monday morning keynote address in New York to set out out a vision of the digital currency that is decidedly unlike the decentralized dreams of many early bitcoin backers.

Allaire, whose startup Circle is vying to taking bitcoin into the consumer mainstream, spoke at Inside Bitcoins, one of a growing number of event franchises capitalizing on a spike of interest in payments and virtual currencies.

According to Allaire, bitcoin’s emergence as a global payment platform will depend on governments altering anti-money-laundering laws, and helping bitcoin service providers integrate with the world’s existing banking infrastructure. In his view, the choice between bitcoin and conventional fiat currencies doesn’t represent an “either/or” proposition. Instead, he predicted the two systems will one day become intertwined through commercial banks and ATM networks.

More remarkably, Allaire also suggested that national governments could one day establish treaties to regulate bitcoin mining cartels, and act as market makers for bitcoin through their central banks.

All of this is a bit mind-boggling at a time when the average consumer has no idea what bitcoins do in the first place, and when the currency remains impractical as an everyday payment platform. While Allaire, along with west coast rival Coinbase, are clamoring to change this, it’s still unclear when — or if — bitcoin will go mainstream.

Like others, Allaire is fond of comparing today’s bitcoin ecosystem to the world wide web in 1994, when Netscape suddenly brought the internet to everybody.

“There is not yet the killer app for bitcoin,” he said, despite the upwards of 2,000 bitcoin-related start-ups and companies that Allaire claims are now operating around the world.

So what will it take to get bitcoin to go from techie fetish to common currency? Allaire said that cryptocurrencies, recently dubbed a “fifth protocol” for the internet, require better standard systems and a company akin to Red Hat – a corporation that packages open-source software into practical commercial products.

5 Responses to “Bitcoin will be part of the global banking order, says Circle CEO”

  1. Interesting, but Bitcoin is just the tip of the iceberg in the crypto-currency world. You should do a piece on an alternative coin, like Zetacoin. They are about to become one of the major mobile payment solutions around Africa, lead developers are in meetings right now to make it happen. You can get Zetacoin on most major coin exchanges Bter/Cryptsy/Mintpal. As of today Zetacoin are 1,000 times cheaper than Bitcoin. They will be all over the news in the next few weeks! Do a research piece on Zetacoin for people who don’t know what alternative coins are, or want to get on the bandwagon before they get to $100 per coin. Right now they’re only about $0.01 each

  2. Mark McKenzie

    I firmly believe the Bitcoin and the existing banking system will likely co-exist even complement each other. I think regulation is key for the continued evolution of Bitcoin. I think the proponents of Bitcoin need to be little more open in their attempt to win mass public support. The complexities of how Bitcoin work need to be better explained.

  3. johnb820

    I have zero issues with governments and/or banks entering the cryptocurrency space. In the end it just means we trade a debt based inflationary paradoxical currency for a fundamentally stable mathematical based currency with no interest, no debt, and hardcoded limitations on its creation. And with cryptocurrency’s decentralized inclusiveness, one does not have to use any financial services offered. I can still be my own bank and any services offered over the network would simply be for convenience rather than necessity. If governments were smart they would issue their own cryptocurrency, allow it to be used to pay taxes, tightly regulate the exchanges, and watch it compete with current debt based currencies.

    And yes, of course all current cryptocurrencies will continue to fill the space that bitcoins currently occupy in the face of a government issued cryptocurrency. If governments/banks do not act now, bitcoin will continue to dominate to the point where those institutions become threatened and are no longer able to utilize its advantages. What we are talking about here really is a money that has been created by the public that literally does not allow any single individual to control its creation or supply. The role of banks as financial services providers is not threatened. The only losers are the central bankers who control the money supply and enslave all peoples including governments in the form of interest that can literally never be paid off. To our politicians, they could champion the removal of many taxes which currently go directly into paying off that interest winning the adoration of their constituents.

    Do we choose to wait decades for the slow but steady domination of bitcoin? Or do we fully embrace what this technology has provided to correct our economic problems right now? Some developing country will do it and take the plunge, hopefully sooner rather than later and the world will be watching…

  4. Greg Matthews

    Great article. I think the future can be found not only in bitcoin but in decentralized cryptocurrencies in general. If you look at where the major innovation is emerging today, it’s coming out of altcoins, like Goldcoin (GLD) for example, which is about to release a new multi-threaded java daemon and cross-currency client.

  5. Hope for the future

    That maybe true but it defeats the point of decentralization. If Bitcoin undergoes corporate/government take over another cryto-currency will take its place. This decentralization isn’t limited to “money”, the possibilities are endless.