The End Game For Stablecoins With Edward Woodford

Stablecoins are an alternative payment method as like a huge use case. And if you want a technology multiple, you have to think about how you actually use this. Otherwise, you look a lot more like a bank. But yet a bank actually has better economics than, for example, Circle, because Circle's not a bank. So I think if you look at this kind of— people talk about the stablecoin sandwich. I think if you look at the layers, you know, Coinbase is in a really, really great position with those two pieces.

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All right everyone, welcome back to Empire. Very excited about this one. We have Edward Woodford, the co-founder of ZeroHash, CEO, co-founder. I think I'm getting that title right. But Edward, welcome to the show, man.

There we go. Good to see you.

Yeah, you too. I was looking back at the calendar to see the first time we ever met. It was October 2018.

Wow.

At Pomp's office.

You remember that?

I do. I do. Yeah. I remember flying in for that podcast because it had to be in person. Yeah. I remember landing like— it was delayed 2:30 and I turned up at like 8 AM. I think it was.

Yeah, exactly.

It was. I would like to listen back to that. It'd be kind of interesting.

You definitely don't want to listen back. I can assure you, you'd never want to listen to old episodes. As someone who's made that mistake, you're like, oh, cringe. Well, anyway, so I wanted to make this episode about the business behind stablecoins. And the context here is, you know, Circle's IPO just— they announced their IPO, so they had to file the— I think it was the S-1. So a bunch of their numbers got revealed. Very interesting. Tether's obviously making the rounds right now. Powell is kind of doing the podcast tour, talking about some of their numbers. I think everyone knows how big they are. Stablecoin legislation is coming. So stablecoins are like the topic du jour. Not enough people, I think, look under the hood of these businesses. So I wanted to have you on. And just for people who might not be familiar with, with you and for ZeroHash, I think I'll kind of, you know, hype you up a little bit more. More stablecoins flow through you guys than most companies. You guys do several billion of mint and burn every single week across the stablecoin landscape. You guys have, you know, you work with the BlackRocks and Franklin Templetons and Stripes and Calshies and Interactive Brokers of the world. Can you just give us a Maybe just 30 seconds at the top to just maybe give the context of what ZeroHash is for people who don't know.

Yeah, absolutely. So we're like an infrastructure layer to make it really, really easy to abstract away all the complexity around stablecoins and crypto. So we take on the regulatory burden. We also take on the technical burden, right? So, you know, if I'm looking to send you a stablecoin, you might be on one chain, I might be on another. How do you abstract away that complexity? Secondly, you know, groups like Kalshi don't want to think about, hey, I now need to buy a fraction of Solana to be able to accept a stablecoin. So we abstract that all away. Our goal is to make this a really, really accessible mechanism for payment and store of value. That's really what we do.

Nice. Okay, let's talk about the business of stablecoins. So maybe we can get right into— actually, let's start with, can you just walk me through? Because a bunch of different ways you could make money as a stablecoin provider, right? There's, you know, there's being an issuer, which you guys have chosen not to be an issuer. There's kind of the infrastructure layer. Like, walk me through the how you see the business model of stablecoins.

Yeah. So I really break down this landscape in terms of like layers. And so you obviously have blockchains, right? So Ethereum, you know, Coinbase has launched their own blockchain. Then you've got the issuance business itself. So that would be, for example, Circle. And then obviously you've got the infrastructure layer on top, which is where ZeroHash plays, and you've got applications on top of that. What I think is really interesting is if you look at, for example, Coinbase, Coinbase is effectively gone into the infrastructure business, they've gone into the application business. And then obviously a year and a half ago, 2 years ago, they launched the blockchain business, which is effectively Base. And so I think it's really interesting. Where do you play in that stack? Another example is like Ripple, right? Ripple launched RLUSD. So they're in the issuance business, but they also have their own chain as well, right? Which is, you know, you know, XRPL. And so they've launched on XPRL. My view is you've got to play in multiple, multiple of those stacks. You know, we've intentionally not gone into the issuance business for a bunch of different reasons.

Hmm. Can we start talking about Circle? Yeah. So Circle had their IPO filing. Let me just look at some of— I'll read some of the numbers like revenue up 15% year over year, adjusted EBITDA down 28%, net income down 42% to $157 million, USDC circulating supply up 80%. $24 billion to $44 billion. So the headline numbers right out of the gate, they feel good, right? But when you start looking under the hood, you start to see gross margins are starting to get crushed, right? High distribution costs.

Yeah.

Tell me how you think about Circle as a business model.

Yeah, I think what's really interesting, right, is there's always going to be this dichotomy and challenge in some way. Like one of the stats that they don't talk about is like, you know, total process volume, right? Like TPV. So if you look at like a payments business, like a Stripe or a Shift4, they talk about TPV and right now they're not talking about TPV because they don't make money by processed volume. The people that are making money by that are the chains. So for example, Base. So what I think is really interesting, we look at that model effectively, Coinbase has created this, this, this kind of sandwich between Circle, but the meat, the filling is really, really thin for Circle and being the application layer and the infrastructure layer and the, and the base layer effectively with the, with the blockchain stack. You've got really chunky margins there. I mean, they're the ones that are making the money. And that's my view, is that stablecoins are an alternative payment method as like a huge use case. And if you want a technology multiple, you have to think about how you actually use this. Otherwise, you look a lot more like a bank. But yet a bank actually has better economics than, for example, Circle, because Circle's not a bank. And so they can't, for example, do fractional, fractional lending, which is effectively how banks, banks make their money. So I think if you look at this kind of people talk about the stablecoin sandwich, I think if you look at the layers, you know, Coinbase is in a really, really great position with those two pieces.

So they've got the blockchain, they've got the distribution, Circle's in the middle. They're the issuers.

Very, very thin.

Very thin.

I mean, two-thirds of the revenue obviously goes back to Coinbase, which effectively is passed through as rewards, or Coinbase is keeping some portion of that. And then if you look at, for example, the distribution of of BASE in terms of actually processed volume. I think BASE has gone from basically 0% to now close to 50% of processed volume, which is pretty incredible. I mean, BASE is clipping a tiny fraction on every single transaction. And that's what I find interesting, right? Like, the big headline number is effectively assets under custody.

Whereas total USDC supply, that number that you see going up.

Yeah, exactly. Whereas to me, supply will naturally go up as use cases expand. And so One of the things I did recently, I was like, who actually are the biggest holders of USDC? Who are the big— and like one of the biggest holders online is like, you know, the Indian Earthquake Foundation. Like, it's like, why, why are people holding this asset? Right. And so it's an interesting one.

I think I see what you're getting at, which is maybe someone like Circle wants the use case of a stablecoin like USDC to be payments. Yeah, but really it's the Indian Earthquake Foundation who's not holding it for payments. They're holding it as a store value.

Yeah, store value.

Is that right?

Yeah. I mean, look, there's always this inevitable Tether versus, you know, USDC transfer comparison. To me, Tether has effectively won the store of value game largely. Right. And if you look at— but, you know, Circle, how is Circle going to make money from transaction volume? I think that's the biggest piece. And in some senses they've tried to make it more difficult. Right. So it's public that they, for example, they've introduced a, you know, a burn fee. My view on that is if you make it more difficult to get out of, of something, people are less likely to hold it. I think it's actually a counterintuitive incentive structure and actually a great analogy of this. I've actually been reading quite a lot about this around ATMs. So there was the view when banks a few years ago, when, when banks, you know, started launching ATMs, there was a big fear, hey, everyone's going to take the money out more quickly and easily. What actually happened is people held more money at at the banks because they were more easily able to get cash out. And I think that's an equivalent analogy. If you make it more expensive and there's a friction of getting out of a stablecoin, I think you're less likely to actually drive up adoption because people are like, well, I don't want to have to pay or I don't want there to be a friction at that point. So I actually think that the burn incentive structures are going to be counterproductive. And from a revenue perspective, it's absolutely marginal in terms of a revenue line item. And I think it opens up opportunity to other stablecoin issuers. I mean, Ripple's come in doing, you know, no fees on redemption.

Say more about the burn incentive model.

Yeah. So I would say it's a burn disincentive model.

Burn disincentive.

So it's a 10 bips fee on burning, right? For the— I think it's called like the instant redemption method. And I think if you're happy to wait 2 days, I think it's 0 bips.

Yeah.

So to me, it's a disincentive. To effectively burn. But a lot of use cases, right? Like, you know, Circle announced, for example, a partnership with ICE, right? Intercontinental Exchange, which owns NYSE, you know, as a collateral mechanism. Collateral by its nature is going to be liquidated at some point. That's a burn function. If you look at, for example, Sony, the big announcement with Sony, what is payments? If I'm paying with stablecoin, that is a burn. So what you're doing is you're increasing the cost for those sorts of burn use cases, which I think disincentivizes actually being able to hold large amounts of, you know, USDC.

It also disincentivizes payments, right?

Exactly. Payments is a burn use case.

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Yeah. Okay. So what do you do if you're in Circle's shoes right now? Because just running through some of the numbers, right, you've got your gross margins getting crushed with distribution costs. Core US market is being deregulated and banks and financial institutions are about to kind of crash this party, which was this kind of duopoly of Circle and Tether. You're spending over $250 million a year in compensation, another $140 million a year in G&A. You've got net income is down 42%, adjusted EBITDA is down 28%. They earned $1.7 billion in revenue in 2024 but had to pay out $900 million to Coinbase as a distribution partner. What do you do if you're in Circle's shoes right now?

Yeah, I mean, I think the bank aspect is going to be really powerful, right? I mean, I spoke to a Circle board member and I said, is stablecoin good for you? And they were unclear, right? And so if it was me, I think you either look towards becoming effectively a partner for all the banks, right? And so you let them effectively white label USDC slash— I think that you effectively try to make a very, very small transaction fee. I think that's ultimately where you're going to make money, right? And if stablecoins become more more present, it's going to be a transactional business, right? Interest rates are going to come down. That's going to crush, crush, crush revenue even more. And then people are looking at you not from a tech, a tech multiple or payments multiple, right? Like a PayPal or Stripe kind of multiple or Adyen multiple. They're giving you effectively like a bank multiple, but even discounted from the bank because you can do less with that money that you're holding. That's my sense of what you do is you fundamentally shift the way that you try to make money. Away from a purely interest rate driven business. Hmm.

Yeah, I was looking at, looking at the valuations. So Coinbase is trading at, if you're looking at adjusted EBITDA, Coinbase is trading at 16x, PayPal 10x, Visa's 27x, Mastercard 28x. If Circle— what's the range for the valuation? I think it was $4 to $6 billion that I saw for an IPO. That would imply a multiple of like 13 to 20x. Feel cheap? Feel expensive to you?

To me, that feels expensive, right? Just for exactly the comps that you gave. I mean, I think better comps are, right, looking at, you know, Mastercard and Visa traded at multiples because they're effectively— it's an oligopoly, right? And then Coinbase, if you look at where you think you make the money, right, in terms of those 4 layers that I outlined, they're trading there. So I think it's better to look at like a bank multiple and then effectively take a discount from there. It's effectively the way that I view it. I mean, obviously Circle has built some good technology around it, but it was interesting, right? Like I listened to similar podcast with Laura Shin, right? And the, you know, the argument was that the expenses were from compliance. I'm curious how many people are actually in compliance, especially since Circle's changed its model, right? Like a year and a half ago, more and more people could effectively mint and burn directly with Circle. Effectively, they took a decision not to do that. A bunch of different reasons why. It's less costly from a compliance perspective. You only need to manage a few kind of like warehouse partners or distribution partners. So I don't know if the costs are coming from compliance, to be completely honest. So that's kind of my take on it.

What's it like working with Circle as a— as one of the— I mean, I don't know if it's fair to say as one of their biggest partners, but I mean, you guys are doing several billion of mint and burn. I know this isn't just with USDC, across USDT and other stables as well, but what's it like working with them versus maybe working with someone like Tether? You know, we're only talking about those two right now, but I'm also curious There's Sky obviously has their stablecoin, Athena has theirs. Like, what's it like working with the different stable providers?

Yeah, I think what Circle's done really, really well is build out some really strong banking relationships, right? So for example, BNY Mellon is obviously a really strong partner. And I think, I think people often think of things in binary terms. The beauty of being on BNY, for example, is that you can embed into RTP, so real-time payments. And so, for example, what are real-time payments? So real-time payments is effectively an interbank ability to move money 24/7 as well. And so this is effectively in some degree a competitive competitor to stablecoins. But RTP, effectively what that means is I can move money from BNY Mellon to, for example, BMO Harris or JPMorgan. So the banks have—

Dumb question. Is that like SWIFT?

No. So it's like it's its own network that started to be rolled out, effectively allowing— you can only go up to $10 million clips right now. For—

Oh, this is a stablecoin native.

It's not even— No, it's not stablecoins. It's effectively been done by the Fed. So it's banks moving money between each other 24/7. Why that's interesting with BNY is I'll give you a real example. So we receive USDC for a Cauchy customer. Cauchy wants to receive dollars because they're a clearinghouse under the CFTC oversight and they want to receive dollars. I need to get those dollars to Cauchy 24/7, 365. And so the beauty of being, for example, BNY is I can liquidate into dollars because I can mint and burn with Circle at BNY and then I can send effectively a dollar transfer 24/7 to— it's more like an institutional—

So a customer basically— so I want to trade on Kalshi. I'm going to send you USDC. Yeah, I'm going to send you USDC.

Yeah.

Or I'm going to send it to Kalshi.

No, you actually— you actually—

so, yeah, so I'll give you what's happening behind the scenes is I just want to make sure I kind of understand.

Yeah, no, makes a lot of sense. I mean, and we're going to be rolling this out with a bunch of different partners like tastytrade and some of the largest brokerage firms. But effectively, if you go to Cauchy today and you want to, you know, so let's say you want to speculate on March Madness, right? Or you want to speculate on some political contract. Effectively, what happens is you create an account at ZeroHash. It's all completely embedded and seamless. But that USDC is actually legally coming to ZeroHash. We then convert that USDC or any other asset into dollars. And then we then— so you have a dollar balance with ZeroHash for a fraction of a second. And then we give the dollar balances to Kaushee. So you go from, say, having 1,000 USDC to having 1,000 USD under 30 seconds. So it's a seamless mechanism. So for example, with the election that happened, you could trade all the way up and fund your account all the way up to the results. And also ACH takes 2 days and there's limits on that, right? So the benefit for a group like Kaushee of using stablecoins is non-reversibility, right? So the amount of fraud in just generally in payments is huge. So the ability to not have to worry about reversibility allows you to do much larger clip sizes.

Who is making money in that flow? So you've got BNY, Circle, Kalshi, ZeroHash. Who's making the money?

Yeah. So we charge a transaction fee and the transaction fee is, you know, it's attractive.

You're charging that to Kalshi or to the customer?

Yeah. So the end customer. So it's, you know, I think it's 40 basis points. So that means if you do $1,000, you receive $996. Right. And that's cheaper than a wire. It's instant, it's 24/7, it's 365. And most of the customers that are doing this, I'm trying to fund a trade where I think I'm going to, you know, 2x my money on an event-based trade. And so I don't mind paying $4. Now, for other use cases that we power, the margin's a lot thinner because the value proposition— I think it's not about fees, about value proposition. And that's why I think people need to think about— so we're making money on the transaction, right? But again, that's a net burn activity. But my view on this is that stablecoins become this alternative payment method that any bank, any bank in the US can enable this. You have this seamlessly. So you're holding dollars because you as a US person, it makes sense for you to hold US dollars. In my mind, safety, you know, FDIC insured, you can use it for other mechanisms. So then you say, hey, it's Saturday morning, I want to place a bet on Cauchy. Okay, I've got— you get paid into your Chase account. You basically say, okay, I'm going to move into stablecoin instantly. So that's a mint. it goes on-chain under 30 seconds, you know, under 10 seconds, and then we immediately burn it. So there's going to— that's why I think of this much more in terms of APM structures. That's where we're seeing true size and true volume is in actual value propositions around where it makes sense for it to be instant. It makes sense to be 24/7. So, you know, in that instance, what's happening with Circle? There's a mint and there's a burn within under a second. So they're not really making money on the interest, right? Because there's only USDC for a fraction of a second. And that's why I think they need to move more into a transactional business.

Well, what would that look like?

They could charge a fraction of a fraction of a BIP on every transaction, right? Similar to how other payment companies do it. I mean, if you're looking to send USDC on ETH, right, the ETH network's making money. I mean, I think, you know, I don't know if Circle should launch its own chain per se. Right. But I think that effectively there should be a tiny fraction on every single payment.

Well, why should I? This is one of the things I was actually thinking about going into this conversation is, shoot, what's the name of that? Codex, I think, just raised.

Yeah.

And they're a chain for stablecoins.

Yeah.

And then Tether just launched effectively their own chain with Plasma, I think it's called. And obviously, if you look at like Tron, like basically Tron is the Tether chain right now.

Yeah.

Eventually Plasma becomes the Tether chain. Yeah. I saw Circle Ventures invested in Codex. Should Circle launch their own chain?

I think from a transactional business, right? If stablecoins are a transactional business, you make more money by having a revenue structure that is transactional-based. I think the reality of it as to why maybe Circle has wanted to be a little bit more hands-off is if you look at their balance sheet, right, they've taken incentives effectively from different blockchains. Right. And potentially that's a good—

Right. They get paid some, you know, some new chain says, I want USDC on this chain, I want to accelerate it, I want it.

I want it now.

Yeah. And that's what I thought was funny about like crypto Twitter. Like, hey, Circle's super bullish on XYZ. And it's like, no, no, no, I don't, I don't, I don't think that's the— they've just been— they've effectively received an incentive from that, from that foundation.

Right.

The protocol will go pay them to bring you—

Exactly. Exactly.

Hey, everyone. Earlier in today's episode, I mentioned Petra, a top non-custodial wallet developed by Aptos Labs. They just launched Earn, a new feature to access DeFi with just one click. Earn lets non-US users deposit US USDT directly into Aries Markets lending pools to gain interest and rewards and manage it all directly from the Petra wallet. Petra Earn was designed to make DeFi more accessible for everyone. You can manage your balance, claim rewards, and deposit directly from the app. This is of course not financial advice. Participating in DeFi carries risks. To learn more, visit petra.app/earn or by hitting the link in the description of today's episode. I wanted to take a moment to tell you about today's sponsor, ZenRock, the permissionless decentralized custody network backed by 1Roundtable partners, 10T, Maven11, and Spartan. Now available on Jupyter, ROCK is the native token for transactions within the ZenRock ecosystem and secures ZenRock's decentralized custody network. The first application launching on ZenRock is ZenBTC, yield-bearing Bitcoin coin on Solana. ZenBTC will be live in April 2025. To find out more, you can follow ZenRock on X or click the link in the show notes.

So another part of this S-1 was so USDC held on Coinbase. Coinbase takes 100% of the net interest. USDC held on outside of Coinbase, 50/50 split between Circle and Coinbase. USDC held by other partners like Binance, for example. I guess it's probably a 50/50 split. On the interest after someone like Binance takes their share. Yeah. What do you think the future of the revenue sharing model on this interest goes into? We had Chad from Paxos. Yeah. And Nathan from Anchorage on the podcast.

I saw.

Yeah. And this was a big conversation. Topic of conversation, I'd say, is like the fee, basically the fees that they can— that someone like Circle can take and even Tether too just has to go down over time. How do you think about that?

Yeah, I mean, it does, right? I mean, I think interest either goes to partners, distribution partners, or it goes to the end customer. I mean, again, it looks a lot more like a banking setup, right? And banks are great. The title of this podcast should just be Circle is just a bank.

Is that what you're getting at?

I would say a discounted bank, right? Like, that's how you should think about it, right? If you look at their pure revenue structure, right? I think that happens a lot in crypto though, right? Like if you look at like FalconX, it's a trading firm, it's a prop shop and people talk about it like as the Google of trading. No, no, no. Like if you look at the only public markets on Falcon, like publicly traded comps, it's like Virtu and a couple of others, right? They trade at 1x book value.

Don't tell anyone.

Don't tell the VCs that.

Yeah, I know. Same thing here. So I think there's like there's this great thing in, you know, in crypto VC that people just reframe and they say, I'm a tech company or I'm this. And it's kind of a distorted reality. If 99% of your revenue of your revenue comes from interest. You are effectively a bank, but actually you can do less than a bank. So in my mind, the banks win. I do think it's interesting how the space plays out. Like, do you have JP Morgan Coin and all these other constructs and other pieces?

Let's go there. I want— winner, winner. What is this? So we've got stablecoin legislation coming out. Banks get into this. Robinhood launches a stable. Fintechs launch stablecoins. I would guess that even the tech companies, like I would— I don't know what happens with someone like Meta, Facebook. Like, you got to imagine they're thinking about launching a stablecoin. What does this game look like?

I mean, yes, to some degree, but I don't think they're going to be making— I think the risk that you, that you have here is that you create a lot of walled gardens, right? Almost like the App Store. You create all these little walled gardens and all these systems can't talk to each other and that just creates more fragmentation and it actually distorts. Like, think of what's happened in the last 2 years in stablecoins. We went from having, you know, 3 or 4 chains or maybe 2 or 3 dominant players, and that was complex enough. Now we've gone to 15 to 20 different chains, let alone the bridge version versions. And then you've now got like, you know, more, more, more, more stablecoins than you have letters in the alphabet. So you probably have to go to the Greek alphabet. I'm looking forward to that one coming out. And it's incredibly fragmented. I mean, think about the usability story. I— let's say, you know, you bought me a coffee and I want to pay you for that. We've got to think about chain. We've got to think about asset. And that's why I think the big unlock in stablecoins that we need to think about, I think we've done it. There's a— there's the story of distribution is going to be there now, right? With the stablecoin bill passing, distribution is going to be— every single bank is going to have access to a stablecoin now, and that's just going to increase. And I think there already is great distribution. Like if I say sometimes in the last 18 months, 750 million people now have access to a stablecoin through a primary account. And a primary account is where people hold money. So if you look at, you know, Revolut, Robinhood, Nubank, PayPal, Venmo, and that's what Stripe's— that's what groups like Circle have done exceptionally well, is getting this distribution. But distribution doesn't necessarily allow you to monetize, but it also hasn't allowed you to solve the usability challenge that exists in payments. Like we see this, right? Like people send on the wrong chain, they send the wrong asset. And so one of the things that we're really investing in is solving the usability challenge. And abstracting away the complexity of chains and assets and allowing me to think about account to account. I'm sending money to Jason. That should be the end of the story, right? No. Hey, what chain are you on, bro? Oh, I'm on this chain. I don't have it. Okay, now we need to— like, that doesn't make any sense.

Yeah, yeah, yeah.

That is not—

I mean, it feels very— I actually feel like I have a decent grasp of what the endgame will feel like, which is I'm maybe not the endgame, but the 3 to 5 year game is I do think there's going to be a proliferation of stablecoins.

I agree.

RLUSD, PYUSD, USDC, USDT. I, all the— I think there'll be dozens of these stablecoins, maybe hundreds. Who knows? Probably dozens that actually get some real adoption. Yeah. And everyone's going to hold different stablecoins. Like you might hold RLUSD, I'll hold USDC, guy next to me holds USDT. The person on the other end needs to just be able to accept— they don't need to be able to accept everything. There needs to be an infrastructure player. Yeah. Like we had Mesh on the podcast. I'm guessing you guys do the— do this too, where it's like I can send you PYUSD even if you only accept USDC. Yeah. And there's just some conversion that happens and I never know about it as the user.

Yeah. I mean, basically what you're doing there is you're disintermediating the Visa and Mastercard. And that to me is like the story that this, you know, that a group like Circle should be telling is like, we're going to completely fundamentally disrupt the concept of interchange and we're going to make it completely interoperable. But to your point about what's missing, and this is what ZeroHash does, is effectively we call it C3, right? It's interoperability, cross-chain, cross-asset, cross-instrument, right? And cross-instrument means, for example, and Circle obviously bought, for example, Hashdex, which is a yield-bearing instrument. And I consider that a stable instrument. And then I, consider USDC a stablecoin. And then secondly is abstracting away the complexity, which we've launched through a product called Auth, which is effectively— it's a bit like Plaid, like abstracting away the complexity of being able to think about like, hey, I don't need to insert chains or insert all these pieces. So those are the missing infrastructure pieces I think solve the usability challenge.

Going back to this question of who wins. So let's imagine this world, right? Ripple, Circle, Tether, JP Morgan coin, Facebook coin. Picture the world in a couple of years, especially after the stablecoin bill, which I do want to talk about in a second. Who ends up winning? What are the largest stablecoins?

I mean, I think in terms of the economics, again, I would say it's the applications that are going to win and it's the chains that are going to win. I mean, that's— and the infrastructure players. I don't think the issuance in and of itself. And so I think the I think it's about edge. I mean, I get asked by pretty much every single customer that we have outside, what should our stablecoin strategy be? I'm like, what's your edge? What's your— and I think that there's going to be— I think that there's more of an opportunity for some of the largest players to launch what I would call a stable instrument, because the largest players around the world really what they—

this is like a Biddle.

Yeah, I think there's more opportunity to, for example, launch a stable, stable instrument because that a lot of these large players, whether it be a large payment group or a large remittance group or a large brokerage group, their biggest problem is moving money between international affiliates and having to hold balances with partners. And that's why yield-bearing instruments are incredibly valuable to them. That's what, that's what they see as the value. So I actually think there's a lot of hype around what should my stablecoin strategy be. I sometimes encourage our partners to think about what should my stable— strategy be and think of stable instruments as much as stablecoins. And if you actually think about stable instruments, there's still a lot of opportunity there. Let's say, you know, whatever Tether's size is, you know, Biddle and Frank and, you know, Benji and all these other mechanisms are still relatively small. So I actually think there's an opportunity to catch up. So I do think there should be more of a broad conversation around stable instruments, as I call them, as opposed to just stablecoin. And that's what I'm trying to encourage some of our partners to think through.

What would you do if you were Facebook?

Yeah. So for me, I think if I was Meta and, you know, I think, you know, we power groups like Felix Pargo that allows, for example, remittances through WhatsApp. I think that's incredibly powerful use case. They have the distribution. I think the biggest opportunity for Meta is payouts, right?

Content creators with their own stablecoin. Like, would you launch Meta US MUST.

I think they have a lot of heartburn and historical complexities. I think you just— why don't you just— like, again, the margin is going to be on the use case, not on the issuance side. And so if you actually think of what a payout is, it's Meta holds dollars and they need to pay a content creator, for example, that it just goes into a stablecoin for a fraction of a second until it gets to the content creator who might then you know, convert into the local currency.

So it's barely sitting in the stablecoin where you're not going to earn interest on that. Exactly.

Those are the use cases. And then you can charge like, hey, then you can think about, okay, what is the value proposition of getting this person their money more quickly? Okay, they don't need to wait 4 or 5 days. They don't need to think about going through 3 or multiple intermediaries. So maybe you can charge 50 basis points. To earn 50 basis points on like just from a custodial model, you might have to hold that money for 100 days, right? So and you're doing that every single time.

So then which one of the players wins that game? Like, again, just playing— play with me with this Meta example here. Like, let's say Meta does this and they're like, they don't want to actually issue a stablecoin.

Yeah.

Do they go to someone like Circle and they say, hey, let us like integrate with USDC and any fees that we earn, that we make there, like Circle, you guys get to keep 20%, we keep 80%.

You guys do all the heavy lifting of like holding the stablecoin.

But that's, but that's not Circle's core business now, right? Like that's really ZeroHash's core business. Business. And so, if you're Meta, right, you say, okay, I don't want to have to handle— okay, let's say this is, like, meaningful. It's still not going to be— for most people, they're still not going to get paid in stablecoins for a bunch of time. So, you say, okay, let's think about building this out. I need to think about how do I build out transaction monitoring? I have to go get all the licenses. I need to think about all these complexities and nuances. So, they want to abstract away all that complexity. So, that's why, again, I break it down by chain, asset issuance, there's this infrastructure layer. The infrastructure layer that we play in does a huge amount, right? We take on all the regulatory burden. We abstract away the complexity of like gasless transactions. We handle transaction monitoring. We have travel rule responsibilities. We do all of those pieces. So we abstract that away and let, you know, Meta or whoever happens to be keep the bulk of the margin on those trades anyway. Hmm.

Okay.

But to me, I think the biggest, the biggest unlocks right now, we've launched the product with Stripe, which groups like Remote.com, like the payout use case is huge. If you think about the global workforce, I don't know if you have freelancers or anything, but if you try to pay these people like Fiverr—

It's a nightmare. You have to use Deal and pay an arm and a leg and it's like—

And it takes time. I mean, the way that we think about payroll doesn't work if it has to go to 3 or 4 hops. So for example, we pay some of my colleagues in the Philippines in stablecoins because otherwise we would pay them late every single time. Right. And, you know, that just does not work.

Yeah.

And then they hold some of it into— again, a lot of it they'll just directly burn straight away. They'll convert into the local currency through like a PDAX, and they may hold a very small amount of it as a store of value.

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Can we get back to the Tether comparison?

Yeah.

So Tether made about $13 billion in net income versus Circle's $220 million despite only having 3 times the supply. They're not regulated. They don't have the distribution partners that Circle has. They only have 150 employees. So that means on a per-unit basis, Tether made— makes about 20 times the income that Circle does. Why is that?

I mean, they do have a lot of distribution natively, right? Like they might not have the brand names, but I mean, they have the distribution globally to do that. They've won a lot of mindshare in the regions that really matter. I mean, I think Paulo said that was the first time— I mean, he comes— he's been coming to the US quite a bit, right? He posted a funny picture in front of the ball. Yeah. You know, but I don't think he came here, right? I think the first time he came here was a few weeks ago to come to the White House. Yeah. I mean, they really were not focused on the US. I mean, actually, as a— if you want to—

well, they couldn't really be focused on the US.

No, no. But I mean, they also— I think secondly, they also wouldn't allow direct minting and burning if you were 50% owned by a US person. And I'm not sure if that rule still exists. So they were trying to create a degree of separation. The difference is, is that because their market— because the circulating supply, the usage is so high, you could get like out of USDT, you could burn Tether with a secondary partner for 2 or 3 basis points up to hundreds of millions of dollars because there was so much utility. Right. So the secondary market is pretty tight. I think that's actually an interesting, like an interesting comparison, like in terms of like the— it's almost like, you know, when you think about money supply, like Economics 101, you think about how, like, effectively liquid it is. Tether is incredibly liquid to get straight back into a dollar very, very cheaply because there's a lot of supply in terms of actual usage, like on-chain transaction volume. So you can get out— if you— something that would be really interesting is if you go to multiple LPs, liquidity providers, and you said, hey, give me a price for $500 million of Tether, I'm 99.999% certain that it would be much tighter than getting USDC price. And what that shows is effectively the liquidity, the ability to effectively liquidate into direct dollars. And I think that's an interesting comparison between Tether and Circle.

Why is that?

It's just used more. Right? Like, so a liquidity provider might give me a half a billion dollar clip. Because at a certain price, let's say it's 6 bps, because they just want to counteract what they're doing on the other side of themselves.

Right.

So they're actually using this so much more. So they're not going one directional. There's a more two-directional natural flow. And that's why Tether, if you go to a secondary market, I can get much tighter on the secondary market. So this means not going directly to Tether, not going directly to Circle, but on the secondary market we can get considerably tighter on Tether than on, than on US.

You're saying by going to like a—

like a Cumberland, the jump.

Yeah.

Yeah. Yeah.

Okay. Some, some trading desk.

Yeah. Yeah.

What's the other side of the argument? What's the, what's the bull case for Circle? Let's start with the bull case for Circle. And I'm curious about the bear case for Tether as well.

Yeah. I mean, I think if you look at— I think, I think, I think Circle's got to play this banking trend very, very well. And I've heard, you know, people call it like— people call someone— one of Circle's biggest investors was talking to me. I said, look, what happens when every bank can do this? And he was like, well, we think there might be different sleeves of USDC. So it's effectively USDC, but maybe branded differently. And so then you get the distribution factor, you get the technology player. You know, I think obviously I'm incredibly bullish on stablecoins and by nature you have to be bullish on other components. I think not Rising tides don't rise everyone equally, I think is my only point from today. But, you know, will the next globally defining business, will that be built on, for example, a stablecoin? So will the next Uber be built on stablecoin? Well, and so I think I'm incredibly bullish on that. And it's a good way to get exposure to the stablecoin thesis. And it's one of the few places you can get public market exposure. So I think that's a very interesting application.

What about the regulated side? Because the— if I've, you know, as someone who doesn't really know these businesses as well as you do, to me as an outsider, it feels like the bull case is— I mean, they got partnered with ICE, they're partnering with, you know, BlackRock. They've got— I think BlackRock's on their board. Like, they're about it. They're very regulated, buttoned up. Like, Tether still hasn't done a full audit. Circle's doing these every month or every quarter. Like, it does feel like that is probably the bull case. But sounds like you disagree.

No, I think there's that. But one of the things, I mean, we're a regulated business and I always say regulation is the floor. It's not the value of a business. I mean, you know, Tether has so much cash, they could— there's like 8,000 trust entities and banks in the US. They could go buy a bank, especially in this environment. Right. So if they want to be a bank, they can be a bank. And also, just to be clear, under both bills, both the Genius Act and the STABLE Act, Circle would have to change its regulatory structure as well. Right. And so there's going to have to be change in implementation for Circle, even though they're obviously, you know, they're a licensed money transmitter in the United States.

Yeah.

Give me, give me the odds that Coinbase eventually acquires Circle.

I do. I mean, they're aggregating a lot of, a lot of economics, right? So I think there's a good chance of it. I would say above 50%. Hmm. Yeah.

I mean, it seems like Circle's success is very, is very— until this S-1, I didn't really— I obviously knew it was very important to Coinbase, but, you know, the $600 million profit or $900 million, Somewhere between $600 and $900 million from Circle translates to roughly like $10 billion of enterprise value for Coinbase. Yeah, right.

So that's, that's, that's the point, right? It's like, so it's that app, it's that goes back to those 4 layers, right? Almost like the sandwich. And let's put application and infrastructure together and then you have the blockchain. They have the valuable stacks. They have the chain, they have the application and the infrastructure. And so like a question is, right, a massive risk factor that I didn't see in the S-1 is What happens if they're large? What happens if Coinbase just says, you know what, we'll launch our own stablecoin? You know, it's just down to personalities. Let's just launch our own. I mean, that is a risk factor, right?

Like, but they don't even need to because they're paying nothing. They've got no opex on this thing that's paying them, you know, almost a trillion dollars or $2 trillion.

They're getting a lot of the margin. I mean, they're getting basically all of the revenue with none of the costs.

Yeah.

But things change, things can evolve, and that obviously changes things. And Coinbase is a huge potential, you know, is, I think, frankly, a risk factor there.

It'll be very interesting to see what happens as you start to embed USDC more and more and more in DeFi as DeFi grows on Base. I would say like, we've got a bunch of data on like, you know, Base versus Solana versus Aptos. Base is just doing phenomenally well right now.

Yeah.

So yeah, just very interesting. How that maybe could strengthen something like Coinbase's moat as a whole company?

Again, I think it was a super smart decision from Coinbase to go down to the effectively the blockchain layer.

Yeah.

I mean, that's where again, it's DeFi and all these mechanisms is about usability movements easily.

Yeah.

And that's, you know, if you make money by movements, which is effectively what BASE does and again, the application layer, you make money by movement. So really there's this kind of weird incentive structure, right? At base, you make money from, from movements. The application Coinbase effectively makes money when you move it. So there's this incentive structure that's slightly different.

I just pulled up your tweet, 2025 stable landscape. You got stablecoins like USDT, USDC, DAI. Shifting gears a little bit, getting where we're— I feel like we're ragging on Circle too much here.

I want to—

I like Jeremy. I like Circle. But so you got these stablecoins, right? Like Tether and USDC and DAI and things like that. You call them— you said liquid, programmable, but mostly non-yielding. Then you've got stable instruments, Biddle, Benji, HLPIF. What's HLPIF?

I'll have to look.

Yeah. All right. Fair enough. Yield-bearing.

But there's so many acronyms.

There's too many.

Too many acronyms. Yield-bearing, but securities and less transferable. So stablecoins and stable instruments, you said two different worlds today. Over time, it all just becomes stables.

Yeah.

Tell me, tell me more about that.

I mean, so my thesis is, again, going back to that point around the conversation around stablecoins, I think you need to cut off coin, right? And so I think, for example, Circle obviously bought Hashdex, right? So where are people moving money today from USDC? If you're, if you're, if you're, if you're outside of the United States or even in the United States, if you can't earn yield on USDC and you are truly thinking this is a store of value, right, as opposed to a payment method, then you will move into a yield-bearing instrument. Now, outside of the United States, you can be a stablecoin and earn interest. And so I'm trying to basically draw this right now. This is segmentation because the way that's been done, that you can't pay interest in the United States for a stablecoin. Stable instruments, you can, but there are a lot— it's a lot more friction to move them. Right. And also there's, you know, they're not truly broken down like Biddle. I think the minimum amount that you can do is $5 million. Right. That doesn't exactly work to pay for a cup of coffee or to— for most people. So there's these features and characteristics as to why there's these differences between stable instruments and stablecoins. And I think over time they become so. Part of the challenge for like a Bit or Benji is because they're subject to like, for example, the SEC and the way that you move money market funds and how you do that on-chain, it's a lot harder for you to actually move those assets. It is still largely a walled garden, even though they're built on public chains. And so there are restrictions, but largely most people want a yield-bearing instrument. And then if you can fractionalize them more, which is really the issue, I think Benji's like a $20 clip size, right, which is the minimum. So there's these nuances that exist, which is why people move between stablecoins and stable instruments and why they largely sit in separate worlds. I think if you increase the programmability of a Biddle, if you increase the ability to transfer, increase the ability to effectively make it into smaller increments, I think the world becomes a lot more blurry. You won't say, hey, I'm going to hold Biddle for my store of value and we use USDC or USDT for a transfer mechanism. I think they become one and the same.

Yeah. Okay. Well, tell me how far out on the risk spectrum this starts to go and what the world looks like. And what I mean by this is, so the first iteration of all this was putting cash on-chain, USDC, USDT, right? Second iteration of this is putting the treasuries on-chain, right? So you got things like Biddle and stuff like that. It feels like the big trend this year that isn't really in the public narrative but is starting to happen behind the scenes. And I feel like you'll see announcements with this is moving private credit on-chain. How does this impact the— just the landscape and yeah, just what's going to be like the second-order implications of this?

I think it changes the sort of people that get involved in the space, right? So who's one of the largest loan issuers in the country? Groups like SoFi, right? So there's— I think it changes the, the profile of people that are becoming interested in the space based on the type of business that they're in. You know, today, you know, you've got transactional businesses, you've got, you know, you've got businesses that hold large amounts of capital that are interested in bid or another mechanism. And then, you know, it opens up a new use case. I mean, if you look at Larry Fink, every asset everywhere will be tokenized. We started off with dollars, to your point. We started, then we moved to yield-bearing instruments. Now we're moving to credit. Again, it comes down to value, right? And I think that by the mere nature that something can be tokenized doesn't make it more valuable. Yeah, right. There has to be a usability story around it.

Yeah. What do you— I mean, what do you think about just tokenized stocks in general? Like, I think you guys processed was it $2 billion for Benji and Biddle?

Yeah.

In Q— I think in Q1 alone, $2 billion for Benji and Biddle.

Exactly.

Yeah. I think you were— one of your big partners is Interactive Brokers. Yeah. For people who don't trade normal stonks online, Interactive Brokers, like one of the biggest platforms in the world. What do you think is the opportunity for tokenization here and specifically tokenized equities? Yeah, I'm curious about—

I mean, obviously if you listen to Vlad and people, they're incredibly excited.

All in on it, it seems like.

And so I think I think you've got to listen to super smart people doing very disruptive things. The challenge around it is that the rules need to keep up. So if you look at the securities rules as the construct of like a transfer agent, right? And that's what groups like Securitize do for the BlackRock Biddle Fund, right? There's a transfer agent. Somebody keeps a ledger of ownership effectively what's going on. Well, isn't that the blockchain, right? So it's almost like you have to create this duplicative nature. So there's going to have to be this comfort level that an immutable public blockchain can basically replace an intermediary, which is effectively a transfer agent. So I think there's a lot of pieces that need to happen, right? Because right now you're permeating on a blockchain, but you're also having to permeate it at a centralized platform. So then what's the value of that? So I think there has to be these changes that have to occur and they're going to, they're going to have to be, you know, legislative or, you know, rule-based changes. And that's why, frankly, I think a lot of people have lent into more of the CFTC world. Right. So you think about collateral, who are the largest holders of collateral? You mentioned ICE. You know, they're thinking about that, I think, in their CFTC entity. If you look at the CME, again, CFTC. And the reason for that is because the CFTC gives a lot more— a lot of flexibility to regulated entities. They can say, hey, we accept— it's within our risk profile to accept a tokenized asset. SEC is much more restrictive. And so I do think you're going to see in terms of that story, the CFTC-regulated entities and CME and ICE have both announced partnerships on that side that I think will move at a greater velocity.

Nice. Why don't we see more chains launching their own stablecoins?

I think it's an incentive structure, right? And I think some of the chains maybe have the same view as me, right? We want to be in the transactional business. As opposed to—

Everything you're saying is the issuance business sucks.

I think it sucks unless you're a bank. Yeah. And guess what? Then from a bank perspective, you're like, wow, we're very happy with our 10-bits.

Yeah, of course. They love 10-bits.

They live in the 10-bits world. Yeah.

Yeah. Because they've got the world's largest distribution.

Exactly. And so I think—

And they can do other things on top of that.

And they can use that capital more efficiently. Right. You can't just hold it in a list of very narrow permissible investments.

Just clipping. Yeah.

Yeah.

Let's talk legislation. Give me your take on what's happening in D.C. right now and what's going to end up happening.

Yeah. So, you know, I'm in D.C. once every 2 to 3 weeks right now.

I'm sorry to hear that.

It's, you know, it's a— it's part of the role. I mean, I think the momentum shift there is incredible. The bipartisan, you know, the desire to do something is incredible. I think frankly the desire to listen is incredible too, right? Like, you know, I don't know if you spend much time with Beau Hines, but like, yeah, he wants to listen. He does more listening than talking and he absorbs everything. And I think that, I think when you look at, I think people have their biases, right, about the current administration, right? That maybe like there's like favorites and, you know, there's like this brashness. If you actually spend time with people spending time on crypto, they're almost the polar opposites, right? They're very clear about being completely above board. There's no special favors. And then secondly, it's about listening to the people that have been doing this right for a long time. So I think there is going to be a stablecoin that will pass. The nuances between the two bills, there's not much between them. I think, for example, the Genius Act gives a bit more primacy to the federal government. And, you know, that's basically the core difference. I do think there's areas that we are pushing to get clarified. I think there's some good statements in this, but what do you want clarified? I think the biggest thing for us is making clear around redemptions that a dollar should— it needs to be able to be redeemed into a dollar. Right. What is— what is a stablecoin? Right. It is effectively just a dollar on a different form of— and we spoke about, for example, What is RTP? It's just a dollar that's been transferred on a private ledger.

Right.

What is USDC? What is UST? It's a dollar that has been transferred on a ledger. So the importance is, I think if you start looking at, you know, if stablecoins become more pervasive, for example, with ICE, there needs to be certainty that you can get out of a tokenized dollar into effectively just another form of dollar. And that's really important because it's going to take a lot of time for clearinghouses and other mechanisms to directly accept stablecoins. And frankly, right, if I'm paying for something like to Sony, Sony might need to convert it, might need to do something else with it, might want to convert into a money market fund. That needs to be the case. And so I think it's very, very important that the redemption rules and the timing of redemptions and the The ability to cap redemptions is incredibly important.

Who's arguing that you should cap redemptions? Why would that be a thing that anyone would want in place?

I think it's just an area of the legislation that hasn't really been strictly defined. I think it's a risk factor that exists. You know, like, look, 3 years ago, stablecoins depegged, right? I need to— you— people want to be able to— like, if you talk to most risk people, they, they do not view a dollar on a stablecoin, a stablecoin dollar as exactly equivalent to a dollar held in a bank account. You just fundamentally don't. And there's fundamental reasons why it's not. You can, for example, if you hold a dollar in a bank account, you can do sweeps. If you hold it in a brokerage account, you're under SIPC insurance, right? There's a— there are differences, right, that exist. And so if you're going to use stablecoins and stable instruments as a mechanism for collateral in particular, you need to be able to move infinite amounts in and out unburdened. And I think also the rules around fees and other mechanisms need to be very, very transparent. Right. And I go back to the ATM construct. Right. You need to— everyone needs to know how much it costs to get in and out of USDC, USDT. That needs to be clear and stated and not just changed on a whim. And those are the key pieces.

What else have we not talked about that, because of where you sit in the industry, what else feels maybe obvious to you that others are missing? Not just in DC, now just broadly with the whole industry.

Yeah, I mean, I think it's the usability. Like, we've got to solve the usability problem. I think we're going to solve the distribution, right? The 0 to 1 of stablecoins. Stablecoins are so tiny, right? Like if you look at the total process volume in the world, it's tiny. If you look at the total percentage of remittance, it's tiny. So we have this unbelievable opportunity, but we have to solve a usability challenge. And I think we have to focus on use cases where there's true value. I think the one thing that always makes me— I think people like right now stablecoins is a buzzword. Like with any buzzword, it's like a lot of companies are like AI and then all they're doing is just like basically doing basic data analysis, right? Like it's just a buzzword. I think what's really interesting is if you look at a lot of these remittance companies that are being formed in stablecoins and you actually unpack the hood, they're actually, they're actually very capital-intensive business. And what they're doing is they're using stablecoins and they're saying it's a fee with a stablecoin that is effectively the lending rate. And so a lot of big companies aren't interested in stablecoins. If you look at Wise and others, right? Because they're like, well, what does it unlock for me? Hey, I can move money instantly. I can do that anyway because I've got massive credit lines. Oh, you're going to charge me 10, 15 basis points because Circle charges you 10 and you add on 5, 20 basis points. I can get credit way cheaper than that. So I think the remittance use case is really interesting. And I think there's these— you have to build out localized liquidity pools and groups like Bitso and Felix Paiva and others have done a really good job of doing this. But I think there's this hype cycle right now that stablecoins solve every issue about cross-border payments. And if you ask these companies, so what's your big— like, explain to me, explain to me how that works. What's actually happening is they're just invoking a credit charge as a fee. It's like you haven't solved the problem. And that feels to me very, very obvious. And, you know, it's just about these local iterations. And so like building out local liquidity pools in these different aspects, But again, I think this is like it shouldn't matter what you move assets in. Like if let's say Trump Coin became massively successful in, you know, let's say Argentina just for whatever reason. At the end of the day, if I'm moving money between US dollars and Argentinian peso going through Trump Coin, no one should care, right? It shouldn't be like stablecoins are the only way to move money cross-border. And that's where like people like, you know, Lightspark and others believe that Bitcoin with larger liquidity pools can be a better mechanism of cross-border payments, for example. So I think what's incredibly obvious to me is if you look at the cross-border payment story, there's a lot of hype that's being reframed. And I think you need to worry less about the network and the mechanism of transfer and thinking about the utility and being agnostic across payment method, right? I.e., asset and agnostic cross-chain.

Going back to the I think that's a good take, by the way. Going back to the stablecoin legislation that's happening in D.C., one thing I forgot to ask. So let me read a, a take on what's happening in D.C. And I'm curious if you agree or disagree with that. Enter the Stable Act. This bill now advancing through Congress proposes 1-to-1 fiat backing for stablecoins, reserve custody only at FDIC-insured banks. Issuers must be chartered institutions, full compliance with AML and KYC frameworks. No yield can be distributed to retail. Strict limitations on what qualifies as a payment stablecoin. Put it together. Here's the outcome. TradFi wins. Bank-issued stablecoins like JPM Coin or BFA tokens get a green light. Non-custodial innovation loses. Any stablecoin with embedded yield, smart contract logic, or DeFi integrations is now in regulatory limbo or outright considered a security. Retail gets shortchanged. Yield-bearing stablecoins, which could offer better return on savings than traditional banks, are structurally blocked. Developers get squeezed out. The cost and complexity of compliance favors incumbents, not startups. Let's call it what it is: regulatory capture dressed up as clarity. This is not a future where programmable money thrives.

I would say to some degree, right? I mean, it's what you are forcing is everyone, a lot of players, right, to become banks and issuers. But You know, if anything, does that— because of regulation, I mean, you can see the cost structure that's taken Circle to build a business, right? Ripple's got all the resources in the world. PayPal's got a ton of resources. So do we truly believe that, you know, a provider is going to create, you know, a small startup's going to create a stablecoin? I don't know. And I think there is credit risk with these players. When you're holding a stablecoin, you are effectively taking credit risk against an institution. And so like, where do you hold money today? Are you going to hold it in a small bank or you're going to hold it in a major bank that for whatever reason you can have a political view on it, like too big to fail. But I would prefer my money to be in an entity that's too big to fail. Yeah. Same thing with a stablecoin, right? It's equivalent to a store of value that can be used as a mechanism for transfer.

So But do you think we're trading off short-term gains, which is, yay, we get legislation and that's awesome and boom, stablecoins are booming. The trade-off is we don't get some potentially amazing innovation that could have come from yield-bearing stables.

I mean, I do believe that, just to be clear, right? I think there's going to be an interesting discussion point. I mean, it's curious who's pushing no interest on stablecoins. Coins? Is it the banks or is it the issuers? Right.

Yeah.

Like, it would be interesting to get the issuers' view on that because if it is, if it is the issuer, you know, that cuts into your revenue even more. But I do think it's interesting if you look at like, you know, Coinbase, they structure interest effectively as rewards. Right. So is that going to be permissible? Is it not? Are we going to litigate that point? I mean, a dollar at a bank that earns interest it's not a security. Yeah. So, you know, do I fundamentally believe that stablecoins should be yield-bearing? Yes. But I think this goes back to my point earlier about stable instruments.

Right, right.

Regardless of what innovation I think can still happen, it's just going to have to be structured in a different way. The rules can be changed on the security side to allow for more peer-to-peer transfers and other mechanisms. You know, Figure, for example, launching a peer-to-peer stablecoin mechanism that is technically underneath the SEC framework. I mean, again, we're thinking very much US-centric as well. Yeah, there are yield-bearing instruments outside of the US that are stablecoins that exist. But yeah, do I believe that stablecoins should be yield-bearing? 100%.

Yeah. Yeah. Edward, man, this is great. Anything else that we didn't cover that we should have covered?

No, I think that's all good.

Good. What's the future of ZeroHash?

The future of ZeroHash, you know, we want to be the biggest company that powers billions of people access to this technology. I mean, fundamentally, we view this as technology as opposed to an asset class in and of itself. We've spoken about different forms of assets that can be built on blockchains. We want to make that really, really easy and to bring it to part of everybody's life because ultimately, there's a huge amount of value that can be unlocked with this technology, cutting out intermediaries, improving the velocity of money. I mean, these things sound academic, but, you know, if we can reduce the amount of money that has to be held in collateral, that frees up cash flow that can lead to investment and growth. Right. It creates a disruptive power and disruptive force. And, you know, we've worked with companies like MoonPay. You know, there were 4 people. They've now turned into a multibillion-dollar business. Right. They're still a customer. Yeah, that, that excites me. And then we also work with, you know, big $100 billion-plus companies that are innovating for the first time. And so I'm more bullish about this space than I've been in years.

Yeah.

And part of it is the regulatory clarity, but also part of it is just like the innovation drive is huge. And yeah, I'm a true believer in what this technology can do.

Yeah. What happens to you guys? Are you going to raise another big round? Are you going to get acquired? Will you IPO?

Look, I honestly don't think too much about, you know, like, are we going to IPO? Are we going to be bought? I focus on just building. I would say this, right? I think we've spoken about this before.

Yeah.

Like, you know, you build a business like narrowing those emotional bounds is really hard. And I think if you think too much about, okay, I'm going to get bored and all this kind of stuff, yeah, I can accelerate. Like it can create these like, you know, you got to narrow those emotional bounds and so decrease the variance of emotion. Yeah. Whilst also not becoming unfeeling.

Yeah.

And that's the challenge sometimes, right? So, you know, we've got a lot of interest. You know, we've got some great investors. You know, there's more that we can do. And I think, you know, in the coming, coming, coming months ahead, there may be some news on that front. But for me, we're super focused on building. I think honestly, not just ZeroHash, but everyone who's been in the space a long time, we can achieve more in the next 18 months than we've achieved in the last 8 years.

Preach. I agree with that. Rooting for you, man. Congrats. Great conversation.

Cheers.