USD Coin is the second-biggest stablecoin with a current market cap of over $25 billion, as per CoinGecko

Digital currency will help the US dollar maintain its power and support a new infrastructure for transactions and exchanges, Circle CEO and co-founder Jeremy Allaire told Yahoo Finance at the World Economic Forum (WEF) in Davos, Switzerland.

Currency competition in the future is a technology competition, it is not just a monetary policy competition, Allaire said. The dollar is the world’s reserve currency, but the US cannot take that for granted.

Circle — the issuer behind the stablecoin USD Coin (USDC-USD) that is pegged to the US dollar — is a key player in the $135 billion stablecoin market. USD Coin is the second-biggest stablecoin with a current market cap of over $25 billion, as per CoinGecko.

The firm, which confidentially filed for initial public offering last week, has been building a platform that allows near-instant settlement of transactions and low-cost global payments. The ability to use the US dollar more efficiently for cross-border transactions is one way that the currency can continue to lead the pack globally.

I think the opportunity internationally is, you know, how can digital dollars play a bigger and bigger role in humanitarian aid, in the effective use of remittances and international transactions? Allaire added.

In spite of rapid growth and broader adoption within the stablecoin market, the US has not yet passed a regulatory structure for the digital asset — a necessary next step for the digital dollar.

There is a digital currency space race, and the US needs to put laws in place that allow for digital dollars to thrive, and let the private industry and regulated private markets grow, Allaire added.