First a lot of warnings: Circles is a novel concepts and a wide range of answers to this question is possible. The easiest would of course be: 0 - it is just issued out of “thin air” and not backed by anything and therefore the default assumption should be 0. Now - of course the person or many people connected via the group mechanism can do various things to actually give their CRC a value. The most easy to measure is put some colleteral (ETH, BTC, Gold, sDAI) behind it and thus simply give it a direct price. But other forms are possible as well - offer goods and services at a specific CRC price. E.g. in Bali at some point there was a pricing orientation point: 1 CRC = banana.
However - we can also look systemically at the question and make some big assumptions:
Lets assume CRC would completely replace the EUR, $, YEN, REAL …
A simple calculation can go like this:
The EURO zone has currently a total money supply of 15.31 Trillion EURO. If we divide that by the population of the EURO zone we get €43,698 that exist per person. In CRC we know that eventually 120804 CRC per person will exist. The total supply will be only approximated over ~20 years. If we would assume the EUR would not exist and the whole EUR economy would run on Circles we could come to the conclusion that the purchasing power of 120804 CRC would than equal that of 43,698€ or simply 1 CRC = € 0.3617 (or $0.38)
We can also take a step back and look at the ratio of money an economy needs compared to its GDP. Note that there is no economic rule that would say that at least x money is needed to have an economy of the size y. In fact, if the velocity of money is ultra high - and it is used only as a medium of exchange and unit of account - and basically never as a store of value (e.g. every time you receive money it is automatically converted into your favourite assets) then this ratio could be extremly low (very little money is “needed” to run a large economy).
However - in practice holding value at least short them in the form that is used as “MoE” and “UoA” is useful to mitigate exchange costs and price risks of other assets. If we just look empirically at major currencies it seems that the amount of money in existence pP very roughly equals the GDP pP. There are exceptions with China where apparently more than 2 times as much wealth is “stored” in money compared to other economies. The other extreme is Nigerea where the currency holds very little value (even in ratio to the lower GDP pP).
(Note - all the data is queried with ChatGPT - I tried to double check but no guarantees).
| Currency/ Region | M2 in Mio | Population in Mio | CUR per Person | Per Person in $ | GDP per Capita in USD | Money/GDP pp Ratio | Potential CRC value | Value at ratio 1 | |
|---|---|---|---|---|---|---|---|---|---|
| US Dollar (USD) | $21,221,200 | 334 | €63,537.00 | $63,537 | $86,601 | 0.73 | $0.526 | $0.717 | |
| Euro (EUR) | €15,310,000 | 350.36 | €43,698 | $46,320 | $43,350 | 1.07 | $0.383 | $0.359 | |
| Chinese Yuan (CNY) | ¥309,480,000 | 1,426.70 | ¥216,920 | $29,501 | $12,597 | 2.34 | $0.244 | $0.104 | |
| Japanese Yen (JPY) | ¥1,259,999.7 | 124.6 | ¥10,109,938 | $67,400 | $37,950 | 1.78 | $0.558 | $0.314 | |
| British Pound (GBP) | £3,003,000 | 67.33 | £44,599 | $54,141 | $52,423 | 1.03 | $0.448 | $0.434 | |
| Indian Rupee (INR) | ₹252,560,000 | 1,429.10 | ₹176,773 | $2,130 | $2,701 | 0.79 | $0.018 | $0.022 | |
| Swiss Franc (CHF) | CHF 928,012 | 8.94 | CHF 103,804 | $119,375 | $94,696 | 1.26 | $0.988 | $0.784 | |
| Canadian Dollar (CAD) | CAD 2,452,000 | 39.3 | CAD 62,393 | $45,620 | $53,834 | 0.85 | $0.378 | $0.446 | |
| Brazilian Real (BRL) | BRL 7,550,000 | 203 | BRL 37,192 | $7,438 | $8,917 | 0.83 | $0.062 | $0.074 | |
| Australian Dollar (AUD) | AUD 2,703,000 | 26.6 | AUD 101,018 | $64,653 | $65,966 | 0.98 | $0.535 | $0.546 | |
| Nigerian Naira (NGN) | NGN 107,182,219.49 | 223 | NGN 481,341 | $626 | $2,470 | 0.25 | $0.005 | $0.020 | |
| South African Rand (ZAR) | ZAR 4,343,350 | 60.14 | ZAR 72,251 | $3,902 | $6,300 | 0.62 | $0.032 | $0.052 | |
| Egyptian Pound (EGP) | EGP 10,896,956 | 110 | EGP 99,063 | $3,170 | $4,400 | 0.72 | $0.026 | $0.036 |
In summary: the value of 1CRC will depend on the GDP of the society that it is used in. It further depends to what extend CRC is used as a store of value (SoV) and thus the ratio of Money/GDP pP. If it would be used in rich societies and with a similar SoV usage as today (US, UK, Swiss) the value of 1CRC could be between $0.50 and $1.
Further note that the total CRC will only approach 120k pP over a period of 20 years. E.g. after 3 years there will only be <25k CRC pP in existence. In that case - to justify the though experiment that comes to those CRC price suggestions 20% of the GPB of a “group” would need to run in CRC. After ~20 years when the full 120k pP are reach it would need to be 100%.
Again - those are just very high level numbers trying to get an perspective on the ratio of money to the economy it is used in. We suggest to let actual price finding for CRC decentralized and on DEXs as layed out here.