Bridge Founder on Their $1.1B Stripe Acquisition | Zach Abrams

Stablecoins create a means of moving that same value in a way that is much more efficient and therefore much, much, much more scalable. You can see that in like a number of ways where you can move the same value for almost real time with almost no cost to people all around the world across dozens of different countries. You're not like making a bet that something will happen. Like, I guess you can. and that's one way to build a company. But a much better way to build a company is to make a bet that you can make something happen.

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Yeah, very excited to be here. Thank you for having me.

Yeah, you got the champagne right next to you. So for context, folks, Zach just sold the business. I don't know if the acquisition's fully done yet, but Bridge sold to Stripe, and we wanted to have Zach on. It's the first time that he's really gone on a podcast, talked about the acquisition. So I think we'll start this off talking about the acquisition, zoom out, talk about future of stablecoins and the future of money on-chain. So, Zach, I mean, let's just start with a big question on my mind and probably everyone's mind. Like, tell us how this acquisition came to be, man. Tell us the real story.

Oh, man, it's a good question. I mean, we— I think probably like The truth is that it's like pretty boring and that it started when we launched our APIs a couple of months ago and spent— or 18 months ago. And over that time, we just had a ton of folks build like core payments use cases using stablecoins. We had, you know, big global companies use stablecoins to manage their treasury. We have fintechs use stablecoins to to, to build neo-banking experiences. We have, you know, businesses use stablecoins to do cross-border payments. And through that, we kind of showed, I think, a lot of the world how stablecoins can and will likely become core, you know, regulated financial infrastructure. And I think that caught a lot of people's attention, at least now in hindsight. And so more than any moment or spark that happened somewhere, it started with the product and the problems that we were solving. And a lot of those problems that we were solving overlapped with folks who were building and using things with various Stripe products.

Nice. Let's talk about— I mean, I'm going to push you to go deeper on this deal. So you hit up Stripe and I mean, I'm assuming on your end you're like, they're a dream client. So you start reaching out to them. Did you originally reach out about an acquisition? Did you originally reach out about a deal, a partnership?

I mean, we started building a relationship with the— with folks on the Stripe team a while ago. I mean, Stripe has sort of been making a push into payments. They built their on-ramp product. They built— and most recently, maybe like at the last Stripe Sessions, they launched the Pay with Crypto product. And so John Collison got on stage and talked a bit about the importance of that product for their, um, for their customers and, and, and the excitement that they had internally to launch that product. So there was increased effort for them to build using blockchains and see what resonated with, uh, with Stripe merchants. And around that time, we, we had known many people at Stripe, but we started spending time with with the folks there, and we built a bit of a relationship with their crypto team. So that was probably like, you know, a year ago or so.

What does that actually look like? This kind of— okay, so the reason I'm going to push you on a lot of these questions is because I called some friends at Stripe and at Sequoia before the podcast, and they said Zach is— it was the most masterfully executed acquisition they have ever seen. So I'm just curious, like, how you really went about this, like, and how you kind of— I heard you kind of put on the full-court press with, like, different executives at Stripe. And I'm curious, like, when, when it turned from a, hey, we could partner with these guys and they seem to really like us, to, oh wow, I think there's a, I think there's a deal here. And then, oh wow, there might be a, you know, several hundred million, maybe billion dollar deal here.

I mean, I guess I would say, like, the first thing is, like, we, we, we didn't start the company to sell it. We didn't go into any conversations to, with the objective of selling the company. You know, like we, we started the company because we wanted to solve, like, we thought that stablecoins would be a core global payment rail. Like, we thought that this could happen and no one was building this infrastructure. And And, and, you know, we solve these cross-border payments problems, we solve these treasury problems, we solve these payout problems, we solve these fintech problems. And as we did that, we gained more and more confidence that what we believe to be true, like, would happen, and not just like would happen, like we could help make it happen. And we believe that more deeply now than, than ever. And we're still super early in this journey. So there's like years and years and years of investment that's needed to actually make what we're talking about be true. We're just showing there's just like glimmers of hope right now. And so we didn't go in to sell. We didn't start this company to sell. And, you know, when we started talking to folks at Stripe, we wanted them to be partners. And we thought that they would be a a great, you know, user of our APIs. And we thought that there would be many Stripe merchants around the world who could benefit from using stablecoins. And it really like that's, that's sort of, that's sort of our focus is like layering on more and more use cases that show people what's possible and then get other people to build more stuff with stablecoins.

Yeah, maybe I'll jump in with a question here. Like a lot of what I've thought about is like how hard had before the acquisition, like how hard was it to, you know, acquire these customers and convince them of the opportunity that you saw so clearly versus going in with Stripe and just, you know, their distribution and how was that math for you? Like I can continue to do this. Maybe it's a bit of an uphill battle. Stripe's already built massive distribution. It's probably better this way. Like, I'm curious, like, one, were you facing a lot of resistance? I know you have really big customers that you're already working with before the acquisition. How did you think about that trade-off? And, you know, what went into your thinking?

Yeah, I mean, we— it's a really good question. I mean, I would say that probably We're trying to affect a change in like one of the largest, most regulated markets in the world. And it was certainly true to us, or certainly like a core belief that we had, that together we could affect that change much faster. And we'll see if that plays out, but we certainly believe that to be true. I think that the thing that we have, we're not, we announced the acquisition, but the acquisition hasn't closed and we're not working directly with the Stripe team in any way right now. But post the announcement, we've immediately seen a change in tone. Across like banks, across potential customers, and so on, and an optimism around what could be built here. And it's what we hope happens is that this, you know, in a lot of ways before this, we'd go into a conversation with some regulated partner or regulator or what have you, and we would kind of enter the room and start at like, you know, negative 5. And we'd like spend the first conversation building our way back to neutral. And then maybe like the second, third, fourth conversation, we can build our way into the positive territory. And now we're able to start at neutral. We're able to, we're able to start at maybe even positive 1, which is like immediately speedruns, you know, a whole set of a whole set of conversations. And so we're seeing, um, the benefits from just the announcement alone play out, which is great. And it, and, and it's not like anything changes. It's just that it opens people's minds and gets them to be receptive to the fact that this could be solving a core problem, that this could be a useful technology, that there could be a lot of promise. And investing internally in stablecoin payments or stablecoin treasury management or whatever else.

Yeah. What do you think was going on, you know, John and the rest of the Stripe team's mind? You know, I'll quote— I think we all saw this tweet, which is incredibly powerful. I think we're going to be seeing it time and time again. It is definitely in my pitch deck, I'll tell you that. I'll quote. So Patrick Collison, one of the co-founders of Stripe, says stablecoins are room temperature superconductors for financial services. Thanks to stablecoins, businesses around the world will benefit from significant speed, coverage, and cost improvements in the coming years. Stripe is going to build the world's best stablecoin infrastructure, and to that end, we are delighted to welcome you guys, Stablecoin, yeah, Bridge, to Stripe. So Unpack that for us.

The core belief is that, you know, if you think about moving money like all around the world, moving fiat around the world is, you know, creates huge amounts of friction and requires huge amounts of effort to move, settle, store, transact in, and so on. And stablecoins create a means of moving that same value in a way that is much more efficient and therefore much, much, much more scalable. And, you know, I think that you can see that in like a number of ways where you can move the same value for almost real time with almost no cost to people all around the world across dozens of different countries, which is like just not possible in the world, in the fiat world. And I think that one of the things that they're super optimistic about, and we're super optimistic about, is that as you unlock this new efficiency, you enable all sorts of new use cases to be created. Because now you can— now that all of this friction is removed, The, the, like, you know, I think that, I think that we've seen over time, like when I was at Square, when I was at Coinbase, or what have you, when we created new core financial services that enable money to move cheaply, it opened up all sorts of new economic activity that wasn't possible before. And one of the things that we're most excited about here is all of the new economic activity that will be possible when this friction is, is removed. And, you know, I think much like, you know, what could be possible with room temperature superconductors, the same thing will be possible, you know, with money.

Yeah, it's actually real, not unlike room temperature superconductors.

Exactly. Exactly.

That would be the only flaw that I, that I'd point to this analogy, which is great. Yeah, maybe, yeah, maybe this would be a good time to zoom out a little bit for people that are not really familiar with what you've built to, you know, really unpack with the lens of, you know, Stripe's done a lot to facilitate, you know, through APIs, just remove some of this friction. I would characterize there's some systemic friction that because the financial system is just a patchwork of systems and very antiquated, You know, really stablecoins are that next step function improvement. But walk us through kind of what you've built. How does it perhaps differ from other solutions in the market? You know, you have Coinbase Commerce, you have other type of infrastructure. But yeah, walk us through that journey and for listeners.

Yeah, I mean, one of the reasons why we started the company is I look back, I spent most of my career in fintech. You know, Sean, who's my co-founder, Sean and I started another payments company. We sold to Square. I spent time at Square and Coinbase and Brex. One of my reflections after leaving Brex was that so much of fintech was built on the back of cards, and cards were this huge new payment platform. And people talk about new platforms like, you know, AI now, but before that, you know, cloud or mobile or internet or what have you. And cards were the financial services version of a new platform. And you had all of these companies build and create value on the back of this new theoretical platform, obviously the networks, but then the Stripes and the Adyans and the Squares and even the Brexes and so on. And our view was that that platform was maturing. And that stablecoins could become the next payment platform that would unlock a whole bunch of new economic activity that was not possible. And over the next decade or so, a bunch of— a lot of new core financial services would be built on top of it. And it's probably not, you know, if I'm being honest, the best reason to start a company because we didn't know, like, specifically what use cases it would solve. but we thought, like, theoretically, there were many that existed. And so we built a pretty generic set of APIs that enabled you to, you know, our, our sort of mental model was that you had a fiat layer that was sort of like a base layer, and then you had a scaling layer that would be these stablecoins that sit on top. And stablecoins are kind of like a layer 2 on top of the fiat financial system. And money would move up, across, and then back down. And we built Bridge to facilitate all of those money movements. So you'd have money in, like, the fiat layer and move up and settle in a stablecoin, and one stablecoin settle in a different stablecoin, or in a stablecoin and settle in fiat. And those are our core orchestration APIs. And we launched those APIs 18 months ago. And we immediately— we built with a few design partners that we thought were going to be successful. And what ended up happening is we We had some inbound customers come that we didn't know about. They built a bunch of cross-border payments use cases and showed us what was possible with cross-border payments and stablecoins. And specifically, they were taking, you know, Colombian pesos converting into stablecoins, sending into the US, or Mexican pesos converting into stablecoins and sending into the US and using this to sort of replace FX and SWIFT flows. And then we had the US government come to us to disburse aid payments. And then we had a bunch of fintechs come to us to build dollar-based apps. And then we had like big global companies come to us to do treasury management. And we've seen that like we've built these low-level APIs that enable you to do any of these money movements. Um, and they're generic enough such that, uh, anytime someone is thinking about building something with a stablecoin, they could come to our— come to Bridge, talk to us about it, and our APIs could help them support whatever use case they might be dreaming up. And the market has like kind of shown us what is possible. Uh, almost all of my experience was and has been in the US, and almost all of the product market fit for stablecoins is outside the US. Um, and you know, we wouldn't be great at building like end consumer or in-business experiences for an individual in Argentina or a business in the Philippines. But there are many people around the world who know those markets and have come to us and told us and what infrastructure is necessary to build those great experiences. We haven't yet entered the phase where people are building entirely new things that weren't even possible at all, because now you have these room temperature superconductors that can, that can move money, you know, effortlessly anywhere around the world.

That's—

yeah.

Walk us through. I can almost imagine a listener saying, well, that sounds too good to be true, you know, like a compliance officer at a bank saying, wait a minute, wait a minute, I am hearing Colombian pesos and cross-border payments. Like, how do you— how does compliance work here? How do you make sure that money laundering and fraud and all this stuff is mitigated and works within, you know, the current system really is good at that, you know, kind of the mentality. Yeah, like, I'm just, you know, for all the skeptics out there, you know, Zach's gonna— yeah, tell us why not.

I mean, it's a, it's a great question and one that, like, we get all the, all the time. Um, I mean, uh, about half of our team focuses on compliance as a result of this. Like, we— it is, you know, I think that I was asked this by someone recently, and I think the reality is we have the exact same compliance requirements as any other entity that's moving money globally. But the reality is that we have to adhere to a significantly higher standard because there is an assumption of guilt because we're using stablecoins. And so it's been, you know, compliance, you know, AML, all of this has been an incredibly important part of the offering that we built. And an incredibly important, you know, means through which we've gotten our banks and so on. You know, comfortable. Over, over the last year, we've had— we've done, you know, billions in transaction volume. We've had less than 1 basis point of fraud. Like, it is like we have an unheard of low level of like malicious activity moving through, moving through our APIs because we've been super, super selective around who we've worked with and how we've wanted to do it, knowing that we've kept sort of like the long game in, in our sights. Like, there were certainly ways along the way to work with folks that would have given us more volume or more revenue or something along the way, but would have, you know, uh, maybe damaged our reputation in, in some capacity. Um, and I think that's like played out for us. But, you know, it's still a really long journey, uh, to build. And like, we handle complicated money movement, you know, it's cross-border payments, it's onboarding people all around the world. It's like B2B payments and so on, which are, yeah, complicated. Yeah.

Give us an overview into your KPI dashboard, both from like, you know, your partners and also what you're tracking, like maybe from an onboarding perspective. Let's just start there. Like, do you go and convince like a Starlink or some company that's doing global payments because they have a global workforce, or do you go and target relationships with local banks that you know there's a lot of movement? Like, do you go through both? Like, how do you think about the go-to-market? And then, yeah, tell us what your KPI dashboard looks like.

Yeah, our KPIs are very simple. We like solely focus on active developers. So how many developers that we have on our platform that are moving money? Um, that's like the most important thing to us. Like, we've seen over and over again It's not how many customers we sign. It's not like, you know, if we have more active developers, developers moving money, then ultimately we have more developers who are growing. And then ultimately we have more developers who are moving more money through our system and then more developers who are using more of our products. And then all sorts of good stuff flows from that. But it's like by far most important for us to have developers who are not just hitting the APIs and so on, but actually moving money. That's the number one thing for us. I mean, volume is an important metric for sure, and one that like most payment companies measure themselves by, but ultimately volume is downstream of, you know, in customer, you know, people building products that are useful. People, you know, using our APIs, people signing up and so on. So that's where we focus. And then on the go-to-market side, we've been super fortunate. Like, our business has basically been entirely inbound driven from the beginning. When we first launched, we got all of our leads because I would tweet about it. And like, you know, I have like, at the time, you know, now I have like 7,000 Twitter followers or something, which is not a lot. And at the time, I had like 2,000, you know, and, and which gives you like a sense for the reach that I had. And I would like say like, you know, you could look back through my Twitter profiles, probably like, very shortly in like April of 20 23 or something when we, when we launched, we're like, hey, we have this product. And then we would get like 5 people to come to the website and they would sign up and we might sign 2 of them. And then the next month we would tweet and we would get 10, you know, and then the next month I would tweet again and we would get like, you know, 15. And, and then word of mouth started. Where people would see our product in the wild and they would come and use us or they would talk to another developer and they would come to use us. And so it's been pretty much entirely inbound. The other dynamic that is true for us, which I'm guessing is true for a lot of other companies that are sort of building in a phase that's similar to ours, is that it's really hard for us as a startup to be able to invest the time to convince someone to use stablecoins. Like, if you don't already want to use stablecoins or believe in crypto or what have you, there's a whole journey you have to go on. And I don't have the time or resources to take you on it, but I hope that someone else does.

No, you know, I'll just— I'll just hold on. I'll do the work for you. I'll acquire them and then just bring it, bring it. So that's the conclusion that I came out. Seriously, I just— I got tired of convincing people, I'm like, I've been trying to do it for 10 years and I just came to the conclusion that I need to do a buyout fund to go and do it.

Yeah, exactly, exactly.

What is the use case that you're not good at? You know, what are the areas, the particular applications or verticals that you're just not gonna— you're not good at, or you just decide not to serve? Curious if there are—

Yeah, I mean, I would say today there are like core areas of our product where we like heavily rely on partners that are not like our area of expertise. Like today, you know, with wallets and custody, we rely on partners to support us there. Like we don't do key management and that sort of thing, which is a core crypto competency. That we have not built in-house. I would also say that on the regulated side, at least to date, we have not pursued— we are sort of regulated in the US and Europe, and we have pretty complete payments infrastructure in both of those regions. But our payments infrastructure outside of those regions is extremely limited or nonexistent in many other places in the world. And we're solving that with other core products that we're building, like we're building a card product so that anyone who has a stablecoin balance, you could issue a card on top of it and spend and so on, which is a more scalable way of solving some of those problems. But building local rails and being licensed locally in, you know, 70 different markets is a really, really complicated task and not sure it's one that we would tackle specifically.

On that point, just want to double-click. You have to get the licensing or can you just partner with someone that has the license in a particular market?

It is very likely that we will partner with folks in these local markets. Like, for instance, in Latin America, we, Bitso was one of our first really big customers doing cross-border payments, and we partner with them to do local payments in Brazil and Argentina and so on. And so we will likely find partners in a lot of these regions. And like, one of the great things that's happened during like the last run-up is you had a lot of— I'm sure you all know this, but you had a lot of local exchanges that hit sort of like crossed a threshold of liquidity that they became like really viable sort of like FX businesses. Because in most of these markets, stablecoins represent the overwhelming majority of volume on an exchange. And as a result, the local exchanges, the Bitso, the Yellow Cards, you know, the Coin.phs and so on of the world are serving as like the connective tissue between these stablecoin rails in local currency. And we need, you know, we're probably like, you know, 4 or 5 years away from a lot of those gaining the depth of liquidity and building out the underlying payment infrastructure for payments to work end-to-end across a ton of different markets. But it's like you can, you can clearly see it happening today.

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Honestly, I think like, so I was a PM before starting this, you know, I started another company, but then I spent my time in as like a product manager. And so like, you know, I had a very high, I put a high importance on like the products that you build and the product strategy that you pursue. I think the thing that, but starting this company, it sort of made it, showed me that like, if you are just, this is like, yeah, I mean, maybe obvious, but if you are just really long-term oriented and like a good actor, It is meaningfully differentiating in the market. Like, I just cannot like even begin to, begin to express like, we are like super vested in all of our developers. Like, you know, we only think we succeed if they succeed. We like waive fees, we waive minimums, we go out of our way to support them. And in most cases, that's like ROI negative for us. But over time, the trust that that builds creates like amazing word of mouth and more people want to build on us. And it creates opportunities to get lucky with some other person or, you know, some other developer when they choose to come or they ask for referrals or what have you. And being really long-term oriented, you know, not making short-term trade-offs to boost volume or not making, you know, going into a market that you feel like could be a little bit dicey and it might put you in jeopardy with bank partners, but it's super lucrative or what have you, especially in the payment space. There's enormous opportunity. There's so much payment volume that's like that, that is struggling to find bank partners and so on that folks could take on and grow really, really quickly. And probably, you know, we've had a lot of success in a relatively short period of time. But I think so much of that success has just been not optimizing for some gain month over month and letting sort of trust and relationships compound over, over like a 2-year period. And it's like free. I mean, it is free. You don't have to be super smart or like what have you, as long as you go into a market that has legs and there's some customers there. If you act that way, it is, it's like meaningfully differentiating. The other thing I think that we did is that, that's more specific to us, is that we've been super honest with ourselves that we are not going to be the arbiters of what is and is not successful in this market. Like, you know, I said, I mean, I know the US market, I do not know what's going to be successful in Argentina or the Philippines or parts of Africa or what have you. And so we have purposefully stayed incredibly agnostic and built our APIs to be very low level, so that anybody building a use case across any of these markets could come and build with us and show us what is possible, show us what can be built on this platform, and show us where we need to be investing to build out our our infrastructure. And, you know, uh, that's been probably the best decision that we made. And like, very early on, people were like, oh, clearly cross-border payments is working, you have to invest there. Or then like, clearly payouts is working, you have to invest.

They want you to build APIs for cross-border payments, or APIs for—

yeah, or even go down and build like consumer applications, you know. Clearly cross-border payments, why don't you just go and like build a consumer application or B2B application? Like, win that use case end to end because, you know, Bridge, you're making X, but your customers are making so much more. And we never did it. And I still don't think we should do it. I mean, yeah.

What do you think it was in the acquisition that got them over, that got them so excited? Was it the tech stack and those low-level APIs? Was it the team? Was it the revenue set? Was it the customers? What was the standout thing there?

I also don't know, but I would say that it was—

Who knows about this acquisition? I'd like to— I'd like to—

Yeah, Yada's trying to sell his company to Stripe too, you know.

Patrick, if you're listening to this, my man, I got a nice media business for you.

So, so, I mean, I think it was all of those things. Like, I think the only way this, this worked was with, was with all of those things. I mean, our team is like, we have an exceptional, we've assembled like an exceptional group of people. Like, they are a lot of people who worked with us who were very early Square, a lot of people who worked with us who were very early Coinbase, a lot of folks who have built like distributed systems, a lot of folks who've like built like really, really scaled infrastructure. And so it's a very unique team that's been able to like build as quickly as we have, like, like our, our, to give you an example of stuff on our team is that we have, you know, we have 50 people, we have zero management in the company, and everybody parallelizes. So we're able to work on like 20 different projects all at the same time. And the only reason why that works is because we've we've hired a large number of people who are very senior and can work independently, which has enabled us to build so many things over an 18-month period. You know, I think the other big thing was, you know, the deep practical use cases, you know, that were so clear and like working and scaling, you know. And I think that, that their team has sort of believed that things were theoretically possible with stablecoins, but seeing people build those things that were theoretically possible and bring them to life using our APIs and so many folks doing it all coming inbound and many of those products really working is very, very exciting. Yeah, and, and, and that was probably it. And I think the other thing that I also mentioned, like in our announcement, is like just for us and them, like, we're just a really developer-oriented company. And, and so are they, you know, so there's like immense cultural alignment and who we serve and the, and the power that comes from serving those audiences really, really well. Um, yeah, yeah.

Before we go to the future, I want to spend some time on the present. Put, put some meat on the bone. Like, what tangible cost savings, um, are, you know, are businesses getting, you know, from, you know, maybe give us a few examples, different type of, uh, you know, selfishly I'm really interested because that's what I'm trying to do.

Yeah. Yeah, I mean, I mean, we had— so, so one of our early customers was, was a government agency dispersing aid payments. And before using stablecoins, about $0.60 of every dollar was getting to end recipients. So these were like large number of payments going out to many, many, many different recipients across Latin America.

They—

these payments were, were small. And so you know, they would send the money to another fiat provider who would send it on to another fiat provider in Latin America who would then do the local payment. And at each step, there was a fixed fee and a variable fee taken out of the transaction. Um, sometimes there were even 3 partners. And so as a result, you know, around 60% of the value was getting to the end recipients. They moved over to stablecoins, and now basically 99.9% of the value is landing in the end recipients. Wallets, which is, which is like an immense saving for the end, for the end consumer. The other thing that we see in a very different use case is cross-border payments. You have a business, you know, taking a Mexican peso and sending it into the US. There are, you know, the cross-border payments market is sort of roughly segmented into 3 areas where you have consumer You have enterprise and you have like small to medium-sized business. The consumer market is pretty efficient, um, but not like wildly efficient. And so you see companies like Felix Pago, uh, start to emerge over the last year who are competing in the consumer market in the most competitive remittance corridor, which is the US to Mexico, doing so against many of the largest companies, you know, like Remitly and so on, and able to be price competitive with them, even though they have no volume. And that's because they are able to take dollars, convert them into stablecoins, and use a company, you know, you— and then convert those stablecoins into Mexican pesos at basically the interbank rate. Um, and, um, the other thing you're able to do with these stablecoin payments, uh, across border is you're able to do local payments, local pay-ins and payouts on each side of the transaction. So like Wise, The way they can get money to move so quickly is they use a domestic US payment in, and then they would do a domestic, you know, payment in Mexico out, and they do netting on each side. So you have to hold money on each side. Well, with the stablecoin, you can get the same benefits of netting, local payment in, local payment out, but you don't have to hold working capital. So you can actually move the money between the two places. So it saves the business who's running that meaningful cost because you don't have to add millions, tens of millions of dollars into every single new country that you stand up. The other big thing is like we see a lot of fintechs building with stablecoins. If you're a fintech and you're serving people in 50 different countries, it is literally impossible. This is why you do not see like Cash App is still in the US. Even after they've tried to expand into many, many different countries. Like Revolut, which is probably the best in the world at expanding internationally, is in like 7 or 8 countries. But if you're building on top of a stablecoin stack, you're global from day one. You build on top of dollars, you can offer wallets to anyone all over the world day one. And so it like not only unlocks a huge opportunity, but if you theoretically were pursuing that with fiat infrastructure, the cost would be in the tens of millions of dollars. Yeah, I could keep going on. Like, you know, in the US, you have FBO banking products. This is the way every fintech is built today. An FBO bank account is a pooled bank account on top of which, you know, balances are ledgers. So if you use Chime or, or Cash or Venmo or whatever, all your money goes into an FBO bank account. Well, all these companies spend enormous sums of money building and maintaining the ledgers tied to these FBO bank accounts. Over time, all new fintechs are going to be built with stablecoins because you get those ledgers entirely for free. This is like what a blockchain provides. And so you're caught— you're not only is it easier to stand up and more scalable and global from day one, but you remove an immense source of like engineering cost and complexity by not needing to build and maintain, maintain the ledgers. Yeah.

From a working capital standpoint, I would imagine as well, right? There's just so much trapped cash in the system, especially in these Novo, Nostro accounts, like for, for corresponding banking networks, all this stuff. I mean, it's just— even locally in the US, like, you know, merchants get paid T+ at best 3 to 6 days, maybe even more. The smaller you are, the worse it gets. But even internationally, I mean, these banking networks are— have a huge drag on working capital.

Yeah, totally. I mean, I mean, this never went anywhere. But this is like a crazy anecdote that I like to tell. We had a, we had a government reach out to us pretty early on. And there were reasons why it didn't go anywhere. But practically, it should exist. It's a government that is entire, like a country that is entirely run on dollars. And but it's outside the US. So they entirely operate in dollars, but they're outside the US. So as a result, they're completely dependent on the intermediary banking system to, uh, move funds. And, um, they are thinking about— they still might over time, it's just going to take them time moving from dollars to stablecoins. Because once you move to stablecoins, you can do a stablecoin payment and then a dollar settlement in the US. Without the need of going through a singular intermediary bank. So a country's funds are not funneled entirely through one single pinch point. And there's a lot of ways in which, like, the existing system is like tacked together through these, like, you know, very unscalable systems where stablecoins enable those flows to be ported over and then, and then used in a much more efficient manner.

Yeah, I describe it for a long time as like, uh, imagine a big blanket which is different, different fabrics and patchworks, and it gets built on top of it. And ultimately Stripe and all these fintechs, you know, they have to work with this fabric that, you know, they can improve interoperability and whatnot, but the underlying fabric is just a patchwork of antiquated systems that at some point you just face a wall that you're not going to reach more efficiency on until you kind of move to this new paradigm, which is, you know, from like, from built from scratch, digitally native, a ledger that is immutable that everyone can agree on. And like, I think it's just like my theory, if you ask me why Stripe acquired you guys, is because they realized that their growth at some point is going to be limited, that they realized that some of this friction was just not going to go away, and that the future for them to be competitive and to be— continue to be a leader was to move in this direction. And the fastest way to do is acquire you guys as opposed to building it themselves and just expand on some of the great work that you guys have done already. Let's, let's like talk about a little bit about the future. What, how do you think about now that you're presumably the acquisition closes? What's next for you? I mean, you've done so much in 18 months. What are some of your milestones? What are some of the things that if we talk to you in another 18 months, what do you want to accomplish?

I mean, I certainly hope in— I mean, I have been completely, you know, a year ago or 18 months. So, so the week that we launched our APIs, so maybe this is over 18 months ago, but literally the week we launched our APIs was the week that USDC depegged. And so we launched, this was like SVB went under, we launched on like a Monday and we were like, we're live, this is amazing, let's go. And by Thursday we were like, oh my God, we need to move all of our money out and our business is 100% going to be worth zero on Saturday. And it's amazing to me how far we've come since then. And like, it's felt like, you know, eons, but you know, I thought that we would be serving mostly crypto-native businesses for a long time, then maybe a few fintechs, then maybe some regulated companies in like 3 years or so on, and then maybe like banks and governments and, you know, what have you in like 6, 7 years. And, you know, we, we started serving, you know, the government, uh, government agencies and, you know, within 4 months after launch or so. And so I've been in our first 18 months, I've been consistently, I have consistently underestimated what has been possible and how quickly things would move. As I look ahead to the next, to the next 18 months, I certainly hope that all of the, like, I hope that every company like, I think it is possible that like every company that is in more than 10 countries, in more than like, you know, 5 countries, is— has some team somewhere that is working on stablecoin services for their customers. Payouts, stored balances, you know, global cards, treasury management, what have you. And I think that we will power a huge number of the folks who are who are building those things. I also really, really hope, and it's hard for me to predict what this is, that we start to see a bunch of use cases where people are using stablecoins in ways that were not possible, that unlocking use cases that were not even, you know, right now there's a lot of use cases that are phenomenally expensive with fiat, but somewhat possible. I hope that they start unlocking use cases that were not possible at all before. Um, yeah, yeah.

Do you have a sense of what— so last year Stripe processed over a trillion dollars in payments across like 3 to 4 million global clients. If you had to project out not 18 months, but let's say 5 years in the future, what, what amount of that payment volume ends up moving into stablecoins?

Well, $7 trillion was settled last year, if I believe— like, very good Visa dashboard And so Mastercard, 7, I think 7 billion, 9 billion.

It's tough. Those metrics on stablecoins are tough because so much of it is related to trading and there's like, yeah, you know, it's like, yeah, yeah.

I mean, I certainly hope that stablecoin volume like through bridge over the years to come is in like the hundreds of billions. And, you know, in 5 years, it's hard for me to tell. Maybe in 5 years, we're at a trillion. And like, I certainly, I mean, I mean, just you think about the use cases that payment solves for, like just moving money internationally via SWIFT, you know, just a US dollar payment from the US to Europe, very simple, or US to, you know, Mexico, all staying in US dollars, never doing an FX transaction. Those use cases should 100% move to stablecoins. It's just transferring the same value from country A to country B. There's many, many trillions in that one flow alone. And the main, the main, you know, limiter to adoption is comfort with storing and moving money in stablecoins. Um, but, but the use case is there. And this is like, this is what I love about financial services generally, is that they're just like, they're very rational, like super rational. You can move money quicker, you can move money cheaper, you can save people time, you could save them money. Like, they, over, over the arc of time, they use them, uh, and adopt those things. But right now, the perceived risk is high, the perceived complexity is high, and all of those things will go down as we have regulatory clarity and as like wallets and indexing and, you know, sending and retries and all this stuff is abstracted away.

What do you need to believe on this just assumption of continued growth of stablecoin for commercial reasons, not pure speculation within the crypto markets? Um, I've heard from a few companies in the space that, you know, higher up the stack, where it's closer to the customer, particularly like B2B or B2C, is that You know, merchants, merchants are still in a position where they'd rather not risk introducing marginally more friction for having a customer pay with a stablecoin or set up a wallet, that they'd rather eat the 4 to 5% or more that they're paying because they're just so afraid of losing the customer, which is not what you're saying. It's not rational, right? Because you can do a lot of modeling, say, okay, even if you lose X percent, even though there's marginally more churn, you're still going to come out ahead. But businesses, particularly smaller ones, are just very reluctant to technological innovation. What do you need to believe for some of this adoption? I think the crypto UI/UX has improved quite a lot, account abstraction, gasless transactions, bundling, batching, all these things. 3 years ago, I get it. Today, totally different experience from an end user standpoint. But from where you sit, like, what are you looking at and kind of what do you need to believe for this to really take off?

I mean, I honestly, like, I think you could zoom in and like think of like, oh, we need to solve, you know, KYC or compliance issues, or, oh, we need to solve like scalability issues on-chain or what have you. But actually, I actually think it's like simpler than that. You just have to believe that the compounding continues. Like, like, I mean, it is like it's just the most important force in, in this space. And like, you just look at the way, you know, the crypto space has compounded to eliminate complexity over the last 10 years. And all those things that you mentioned were problems that are now solved. And there are like, you know, hundreds more that other teams are solving, that the Coinbase team is solving, that, you know, that like, you know, a bunch of folks all across the industry, whether it's like wallet side with Fireblocks or whether it's decentralized exchanges or, you know, whether it's just protocol teams or what have you are solving to eliminate a bunch of the complexity in the space. And like the fiat payment world has compounded for decades, you know, and like ACH and wires are horrible systems, horrible, horrible underlying infrastructure. But there's been compounded investment over many years to smooth those rough edges so that most consumers don't feel it. And the same thing is going to happen here. But you're starting with a much, much, much higher base. And so I think that if you just believe that the compounding continues, then this like migration becomes inevitable. And it's really not a question of whether it happens, but just how quickly things compound, whether it's in, you know, 3 years or 5 years or 10 years or what have you. And that's where I've been like consistently wrong, is that, you know, I underestimated you know, the compounding that occurred and how quickly they, you know, that, that trajectory can change with like a few investments that like unlock big, big sort of opportunities for folks to start building.

Yeah, I would even go as far as saying that the UI/UX is superior in crypto than it is in traditional fintechs. Like, I was just reminded today, inputting account, like, wire information and approving that Like, my God, you scan a QR code and send the transaction, click of a button. Like, it's faster than Apple Pay. You know, it's just really that simple.

I mean, I mean, another thing, I mean, that people often don't talk about but is like super obvious is to me is that like with crypto, you know, when someone received the money, like, isn't that amazing? Like, holy, holy crap. Like, like Like, I mean, I had that today.

I sent the wire. I was like, did you get it yet? They're like, I haven't got it. I was like, well, it says you got it.

Yeah. And so, yeah, yeah. I mean, I mean, just like it is, we just forget because like a lot of this stuff has been smoothed over by like years of, you know, complacency and other services, you know, other tools and what have you. But like super basic things don't exist with fiat payments. And it gets even worse when you send something internationally, like, you know. Yeah. Yeah.

So, Zach, let me ask you a question. So imagine that you're not doing what you're doing right now. You've, you know, and you had, say, hypothetically, $1 billion to go and acquire businesses. What would you do?

I would probably, you know, acquire, I would probably start a roll-up that was acquiring, you know, traditional businesses and migrate them over to using stablecoin infrastructure. How long are you going to be at Stripe?

You put it in my pitch deck? All right.

I don't know what you're talking about.

I don't know. Yeah. Zach, could you see— do you think Stripe could ever launch their own stablecoin?

I think it's possible. I have no idea whether they will or not, but like one of the core problems, like we do stablecoin issuance, that's like one of the core services that we offer for folks who are building on our APIs. And one of the reasons why we offer those APIs is because we believe that people will want access to the underlying economics tied to stablecoins and want to control the way the reserves are managed and over time want to build specific functionality into the smart contracts tied to their stablecoins.

So you think the world will have tens of thousands, millions of different types of stablecoins?

Yes, we think that there will be tons and tons and tons and tons of stablecoins. And, and, and it's purely, you know, rational.

So there will be a Nike stablecoin, an Adidas stablecoin, Starbucks stablecoin. Actually, I guess there already are things with—

Yeah, exactly. You just, you just will never know that they exist. Like, I don't think that they will all trade on Uniswap, you know, like, I don't, I don't think that you'll see pairs between all of these stablecoins, but they will be underlying infrastructure used. And then maybe whenever a stablecoin leaves the Nike ecosystem, it leaves in the format of USDC or leaves as, as, you know, PYUSD or USDT or whatever other, you know, sort of like public stablecoins exist. But, but like this world where you like go into the stablecoin store and you like select, you know, from like 7 different dollar formats is like kind of silly. So, so I think that decision is going to be totally abstracted away from you as you move money around.

I love that. That makes a lot of sense.

Yeah.

Can I— I know you can't actually say too much about the acquisition. I was kind of like poking at you earlier with it. There are actually— I mean, I'm sure you know a lot of these founders too. There are a lot of founders who started in their crypto businesses They've been doing it for a while and they are like, there are some like big M&A transactions happening right now where founders are in the sale process. And so again, I don't know how much you can actually say, but I just love to hear like what it was like negotiating that deal. And did you hire bankers? Did you have lawyers? Like, did you work with lawyers? Like, were there any sticking points in the deal where you're like, oh my God, they care about this? Like with maybe the end the end user of this feedback being a founder who's going through this type of deal right now?

I have an N of 1 experience. Well, I guess an N of 2 experience. So we sold our first company to Square, but it was totally different. We had like zero product market fit and 5 people. And, you know, we were thankful that anybody found us valuable. In this circumstance, we didn't go in to sell. And so, you know, for us, everything was, you know, my like main focus was on, you know, evaluating on my side whether this helped push forward the vision that we had and helped accelerate the business that we wanted to build. And that we could do it while sort of maintaining the team and culture and the things that sort of make us us. And that was my main focus. And the sort of deal and the terms and all the other stuff sort of worked themselves out over time. But those were the things that were, that were on there, that were sort of uncompromising for me. Like, I just like, and it's probably different for other folks, but we're just super early. And there's a lot that we believe needs to be built in this space. And, and like, one of the things that is like, more clear to me now, is that, you know, at least for us, all of us like building in this world, you know, you're not like making a bet that something will happen. Like, I guess you can, and, and that's one way to build a company, but a much better way to build a company is to make a bet that you can make something happen. Um, and, you know, I think that in many ways Bridge has like showed a lot of people what is possible with stablecoins and proven that a lot of use cases are like real and super valuable and so on. And there's a lot more that we have to prove to people to make, you know, stablecoins are important and growing super quickly, but still small in the grand scheme of the payments world. And so there's a lot that we have to prove. So I can't like answer directly. I know I'm like specifically what we negotiate, how we thought about, how we thought about things, but that's what was really, really, really important for us. And it was wildly different from the first time we sold our company where our, where our company wasn't working at all. And we were like just thinking of like, where's the best place for us and the team to land, to learn and grow and build something useful?

Yeah, I think if I were to say something, if I could just add in here, and I'm not a founder, but hearing you talk about this reminds me so much. There's a great book, Getting to Yes, but like negotiation strategies and this idea of a It's called the BATNA, which is your best alternative to a negotiated agreement. And when I heard you say that, it's like two things come to mind. One, you always want to be well-capitalized because you own your destiny. So controlling costs is so important. And the second one is believing that what you're building is so powerful and it's going to work no matter what. And if you're well-capitalized, you can continue to build and execute. And so you can walk away from a deal and it's sort of— you don't do it. You're not doing it out of necessity. You're just from a philo— like, from a standpoint of just saying, is this going to accelerate my vision and the execution of it? But I'm perfectly fine walking away. I don't need to sell. And it's more of, is this the right partner?

And you're—

you're—

it's like a matchmaking. It's not you trying to pitch it and sell it to them. It's, are we together gonna do 1 1 3 kind of thing.

Yeah, yeah, exactly, exactly. And, and I, I don't like I don't think any one acquisition or process is the same. I think our situation is incredibly different from, you know, like people use the comparison of like YouTube or something. There's like probably very little that we share in common with a deal like that or some other acquisition that's tremendously late stage. You know, and the company and the culture and the team dynamic and what have you are very, very different. Yeah. Yeah.

Zach, did you know this was going on or was it just you and Sean and then you brought it to them one day and you're like, hey, we just sold to Stripe?

It was more of the latter, but there was obviously a lot of leaks leading up to the deal.

There's some secret leaks, my friend. Those are so bad.

Which were extremely challenging for us. We really didn't like, you know, this is obvious, like this, you know, once it was announced has become tremendously distracting. And we didn't want this to become distracting for the team in any way. And so we tried to minimize as much sort of noise that could exist as possible. But, you know, probably 2 weeks or 3 weeks before, from somewhere, news started leaking, and then that like found its way to our team. And then obviously, like the week before, it was like crazy with like a bunch of news articles that were like, it was hard to avoid.

Yeah, of course. Well, Zach, man, it's amazing to hear the journey. And just Ben has been pushing to have us have you on the podcast for a long time. And yeah, just, just rooting for you, man. It's like very cool to see you be able to, I think, help take— move, honestly move the industry forward and move stablecoins forward. And yeah, like very hopeful that this deal gets done. And I know it's kind of out of your hands now. It's probably what, with the regulators now or something like that. So hopefully the regulators can get this thing passed pretty quickly. And yeah, I think Santi and I are just both rooting for you in a big way.

Yeah, I really, I really appreciate it. And like, I think probably like my closing, closing thoughts are like, there's just a phenomenal amount that's still to be built. And like, you know, I think a lot of us are incredibly optimistic about what can happen. But that doesn't happen if people don't build it. You know, the future is not inevitable. And even like small teams working on what feel like small projects can have a huge impact. And so, you know, we're super, you know, regardless of what happens here, like, you know, we're incredibly vested in like continuing to sort of push forward and build and like make this reality happen and really, really excited for, you know, other people to do, you know, the same as we like all compound to push the space together. 100%.

Cool. Zach, thanks for coming on. Appreciate it.

Yeah, thanks for having me.

Thanks, Zach. Really appreciate it.

Hey everyone, thanks for watching today's episode. Just wanted to quickly thank today's title sponsor, SKALE. SKALE really is one of the best chain experiences out there today, and I've used so many different chains there's a reason they are gaining so much adoption in both gaming and AI use cases. Hit the link in the show notes to explore the Scale ecosystem.