Why the Dollar's Stablecoin Update is Inevitable | Jeremy Allaire, Circle

Wow. What happens if money velocity means that the amount of transactions that can happen in the world go up 1,000x from where they are today? By the end of 2025, stablecoins like USDC will be legal electronic money supervised by the central banks in the major financial market centers. And it will be something that tradfi, right? Traditional markets will actually be able to utilize.

I can't remember the last time I funded a deal, uh, with a wire transfer. In many ways, it's a yellow flag or red flag at this point.

As a founder in crypto, I think there's a lot of folks who, I mean, are basically waiting for the IPO markets to open up. And I'm sure you can't share too much, but I will say it's like it's all eyes right now on Circle and Kraken. This episode is brought to you by Anoma, the universal intent machine, introducing a new era of applications where you define the outcomes you want. To stay up to date with Anoma, you can follow them at x.com/anoma or sign up for the newsletter at anoma.net. Special thanks to Anoma for sponsoring today's episode. Real is a permissionless L2 designed for tokenized real-world assets. They've just launched their rewards program, so get started at re.al/rewards and be sure to use the code in the show notes below. Special thanks to Reel for sponsoring today's episode. Everyone knows there's a massive shortage of top senior marketers in crypto, and teams are constantly struggling to get their go-to-market done right. That's why we're excited to have partnered up with Renaud Partners, the premier go-to-market advisory firm for early-stage crypto teams. Get in touch with their team by heading on over to RenaudPartners.com or giving the co-founder Jeff a follow on X. Check out the links in the description below. All right, everyone, welcome back to Empire. We have Jeremy Allaire, co-founder, CEO, chairman of Circle, back on the pod. He's been on before, but Jeremy, welcome back to Empire.

Thank you. Really, really happy to be here.

Yeah. So, okay, so I think people have probably heard the Jeremy story a lot and the Circle story, and they've heard Jeremy answer questions like, how do you compete with Tether and how does Circle make money and who's using these stablecoins. That is not what I want to make this episode. I think that Jeremy, for people who know his background, has a really interesting story pre-crypto, building companies in the internet world and then getting into crypto. So Jeremy, what I want to do with this episode is talk about how changing the velocity of money by— through stablecoins will actually change the internet and our internet financial system. And I think the best place to start here is not by talking about crypto, it's by talking about the architecture of the US dollar. And this might be a weird question, but I'm curious to— can you just outline for us, um, what is the tech stack and like the tech architecture of the US dollar today?

Yeah, I mean, like, so the, the, the bigger theme— there's lots of, uh, ways, uh, of talking about that. Um, you know, the, the, you know when people have like a USD balance somewhere, that might have different meaning to them in terms of what that is. But every one of those balances, um, implies, uh, a lot of different kinds of risk, uh, a lot of embedded, uh, uh, credit risk, uh, market risk, liquidity risk, all kinds of stuff. But at the end of the day, and actually I asked this question, this exact same question to a number of years ago to the, to the chief information officer of the New York Fed or of the Fed. And I was like, this guy probably knows what the architecture of the dollar is. And I don't want to represent that I know that this is still the case, but a number of years ago, he said, it's a cluster of Oracle databases running on Sun operating, Sun Microsystems. I don't think they call them mini computers, but workstations or whatever they they call them. And, um, you know, at the end of the day, right, there's a database and, you know, it's probably in New Jersey. It's probably not in New York. I don't know. But, uh, but we can speculate. Uh, but you know, there's basically like these kind of clusters of databases that keep these records and the records are of the, the, what it would be kind of the M0, uh, you know, cash, uh, portion of, of dollar money. There's the physical cash version, but most of it is actually the central bank database entries. You got Oracle databases holding that. Then you go out from there and let's say you've got a JP Morgan dollar and you've got a Bank of America dollar and you've got all of these First Republic dollars or whatever. Those are different. Those are different. So those synchronize through that database using actually really old technology. There are APIs, but underneath it's like you know, text files, uh, like comma-delimited text files and FTP servers. So if you're technical at all, you'd be like, oh my God. Um, so you have like these sync synchronizations that happen, um, uh, to, to, you know, kind of balances, uh, that, that are outside. But actually the dollars that you see in your account, if you have a Chase account or what, I don't know what you have, and you see like, I have $1,000, you don't actually have $1,000. You, you actually have a, you have a, you have a, an IOU for $1,000. And that IOU is like, you can, the contract that you have when you sign the T's and C's says, I can get this $1,000 on demand. But actually, they don't actually have that $1,000 necessarily. They have a fraction of that that is available on demand. Because what happens is most of the balances that are in banks are actually credit money. Is money that is created by the banks. So banks themselves are the money printers, meaning they create the money and they do that by taking risk. And they say, hey, I think that this guy who wants to build this building, he's going to build the building. I predict it's going to be eventually occupied and he's going to collect rent and he'll pay me back over 10 years. And I'm going to have to now put that risk in my books. And so You have fractionally reserved money and that kind of broader M2 calculation of money is on a global basis, it's like $100 trillion. So, the TAM of what I call legal electronic money, which is the combination of central bank reserve money, and then it's money that is essentially held in funds that are buying buying like short-term government debt, money market funds, but the vast majority of it is, is bank credit money. And so we don't really differentiate all those things. We just think, oh, it's kind of fungible. Um, and it's designed to be fungible, but actually it's, it's not because you're, you're, you're dealing with all this risk. And so, but like fundamentally that's the architecture. And then when money moves, it's siloed to a given country. Uh, it's, it's siloed to a specific a set of typically private sector built technologies that kind of synchronize these databases between institutions and then ultimately synchronize down to that home database that's sitting with the Fed. And that's like big picture what the architecture looks like.

I would love to, uh, I would have loved to see your, your, uh, pitch deck when you guys were raising. It's like, what's the, you know, the classic TAM deck?

Um, Oh no, I said, no, I, I, well, so check this out, right? The TAM of legal electronic money is $100 trillion.

Yeah.

And this is actually a good segue back to your original question. So the TAM of legal electronic money is $100 trillion. And that is kind of money that exists, that's in motion and is being utilized in the economy. And that's a, that's an extraordinary amount. And that's in many currencies. That's not just US dollar, but that's the dollar denominated value of it. And then there's another set of TAMs, which are the actual use of that legal electronic money. So there are all these utilities that utilize it. So for example, crypto markets, they are— crypto markets is like a, I don't know, any given day, $2, $2.5 trillion market that utilizes some version of that money. Retail payments is like a trillion dollars of revenue from the whole stack of revenue that's generated for retail payments. There's $130 billion a year of B2B electronic payments. That's a huge volume. And then there's fees and other things that come from that. Capital market transactions, which are in the quadrillions between trades on exchanges, currencies, commodities, stock markets, and that's high-velocity money that is used in those markets. Um, and, um, so the, the utility part of it, which is sort of the, the actual use of that in settlement, uh, in some way, is an extraordinarily large market in terms of the revenue generated by those utilities. And so that is definitely up for grabs, uh, in a lot of ways. The actual money stored and sort of what's the form factor of the money stored is up for grabs. And then on the other side, the utility side that utilizes that is up for grabs. So it's a massive, it's a massive TAM. And I think the meta, and I think like, this is like the internet. And to your, to your earlier point, which is like, there's internet communication systems and they're massive now. Like the, you know, I don't know what it is, how many people are on the internet, 4 billion, 5 billion. I don't know what the total number is. But they are all using some software-based internet utility where they can do direct peer-to-peer text, voice, video communications. And those software utilities are run by global-scale internet technology platform utility companies. There's media that's internet-based, and those are, you know, increasingly those internet media platforms are run by these very large-scale internet platform utility companies from TikTok to Snap to Insta to Netflix to YouTube. Et cetera, and, and versions in China that are different, right? So these are these huge-scale utilities, and, and we've seen this in information publishing and communications and media, software distribution, right? Cloud, uh, cloud and SaaS, which is like how all software happens in the world, moved from legacy models of how software was created, distributed, run to this internet-native utility model. And so you have the core platform utilities that provide that infrastructure. And then you've got layer upon layer that are built up on that, that reach the end user. So you've had this essentially replacement of major fundamental infrastructures of society. You've had this replacement with software built on the open internet, um, and, and built typically on, you know, you know, a mixture of, of decentralized and centralized architectures. and what got me so excited about founding Circle 11 years ago was it was very clear to me that the, the, the base layer of money could actually be expressed natively as like a native data type on the internet, just like all other forms of information are native to the internet now, that you could have dollars that are natively defined to the internet. And, and the belief was that blockchain networks, which is sort of the fundamental innovation that made this digital currency concept possible, um, that those would eventually reach scale. That, you know, back in 2012, 2013, you're talking 7 TPS, no extensibility, very little throughput. Like, Bitcoin network was not capable of a lot. Still not.

It's like internet pre-2002 broadband.

Dial-up. It's 14.4 modems, right? It's like dial-up. It's like 14.4 modems, right? But you can, I could see very clearly that this is, this is going to play out. It's open software now. It's open software. It's open source. It's open protocols. It's going to be continuous innovation cycles in the, in the open that we've sort of seen with other internet software stacks. We're going to see that again. Our view is that you could build an HTTP for money. You could build an HTTP protocol for dollars on the internet. We thought it would probably take 4 or 5 years before that was technically possible. That was back in 2013. It really did take that long until Ethereum was effectively in beta and we could get regulators comfortable that we could issue electronic money in the form of a stablecoin under payment system law in the US, which we were able to do. And so USDC was born out of that, but it was the basic idea at the start. But coming back to your very first question, like in a world where these networks scale, uh, and you have like the throughput of the, you know, internet scale kind of throughput, and you can represent something that is as close as possible to what I think of as that, that Oracle database that the New York Fed has, like a government obligation money, kind of as close as possible to that. That that would be the ideal form of money for the internet because everyone would know this is the safest thing possible. Like, I'm not taking— and, and it would be the highest velocity money ever created. And this is to your very first question, you know, internet digital currency on open networks inherits the, the physics of the internet. And, and so, you know, if you, if you hear, uh, You know, uh, Coley talk about Solana, he'll talk about like our goal is to basically like enable like, um, you know, effectively like blockchains at the speed of light. And, and so the physics of the internet is essentially what is the physics of the internet? The physics of the internet is like the, the capacity of the endpoint kind of high performance computer nodes and the networks that they're connected to and the ability to synchronize state across those. I could see, and I believe this, we're hitting that. And what that will mean is that the marginal cost of storing and moving value will go to zero. It will go to something approaching zero. And when you have the marginal cost of storing and moving value go to zero, money velocity can really explode. And because the cost of utilizing the money has just gone to zero. And it's the exact same thing that happened with the internet. We had information publishing, the cost went to zero. The amount of information published went like a million X. The cost of communicating asynchronously with text, email, other messaging, right, went to zero. And so the amount of communications in the world, million X, right? And on and on, media published, communications activity, even things like software created and distributed. If you look at the net world output of software from 1995, when the web sort of came online to today, like net world output of software has gone off the charts. We're producing more software than we ever have. And now we have AI writing software. It's just going completely hockey stick. So money will go through the same transformation. And so when we come back to the TAM and we come back to thinking about this at size, it's like, wow, what happens if money velocity means that the amount of transactions that can happen in the world go up 1,000x from where they are today? So the transaction volumes that we even talk about with dollars today are actually probably extremely small compared to what they will be when this technology takes hold. And that's exciting because money moving in the economy is what creates economic value. And it's, it's, it's one of the reasons why our mission statement as a company from day one has been to raise global economic prosperity through the frictionless exchange of value. And the idea is like, if you can actually take all the friction out of exchanging value, and I don't just mean payments, I mean more structured forms of value exchange, that's borrowing, lending contracts. But if you can take that cost down. And you can increase that efficiency and velocity, you will create net new economic output. And that's what central bankers think about. They think about money velocity, the, the money multipliers, and interest rates are a way to kind of control money velocity and money multipliers. But now we have a technological revolution that can actually have a huge contributing, uh, role in, in shaping money velocity. And economic outcomes for everyone. And that's what's exciting about this to me.

Jeremy, on that point, um, I know you guys spend a lot of time talking to, you know, regulators. And how much of it is they agree with you on that premise, but they don't want to— perhaps they fear losing that control, um, you know, because right now they have discretion, right? I mean, certainly like the market run does its thing, but crypto is sort of another element that perhaps introduces a level of uncertainty for them that makes them nervous or cautious to embrace it?

Yeah, I mean, look, there's a lot of newness, there's a lot of uncertainty, there's a lot of technical and operational risk. Um, there, you know, in many ways, right, this technology is still fragile in many respects. And so I think their, their kind of reticence around some of this is, is, is justified, right? You know, you, if you're, if you're talking about global scale utilities that power, uh, like huge, uh, percentages and volumes of the world's economic activity, you, you'd want, uh, to, to be in a world where you're not like, hey, there's these guys with multisigs running a sequencer and that's where, that's what dollars are like, like, you gotta like step back a little and, and, and think about like, what does this have to look like to become, um, infrastructure that, uh, markets broadly defined are, are willing to depend on? The internet went through this evolution itself, right? Very early on you had like, you know, ISPs that ran hosting for your servers. And, and if you remember the phrase application service providers or ASPs were like people you could run your apps through these things and like no big software company was doing that, right? Salesforce was the first company to come along and, and like say, hey, actually you can really use software here. The user experience got good enough. And then cloud emerged, which was like the next iteration of that, sort of saying, hey, actually you can run your stuff on the public internet on these broader public utilities. But, you know, big corporations were like, there's no way I can trust that infrastructure. It's not secure enough. It's not hardened enough. I need to have more control. But eventually, you got everyone saying, you know what, the economies of scale, it's like running your own power plant next to your factory, like economies of scale and energy, the economies of scale and compute and bandwidth, like these economies of scale exist. The technology has to get stronger and stronger. And what I love about crypto is this is a great big, huge global laboratory of innovation, of entrepreneurship, of extraordinary technology. Computer scientists, like we're building this in a live laboratory with real value, with real economic activity, and we're building it organically. And it's this, you know, kind of hive mind of all these, all these participants. And, and my belief, and this is just again based on 30 years of working on the internet, is that this model of out in the building out in the open, um, is, is a far superior model in the end in terms of technical capabilities, in terms of outcomes. Will be far, far superior to any government-led initiatives. And so, you have to be patient, I guess, is my short answer in terms of the ultimate readiness. But the fact that the central banks and the regulators in all of the biggest financial market centers in the world are actively putting in place Prudential regulations for stablecoin issuance and operation is a big deal. By the end of 2025, stablecoins like USDC will be legal electronic money supervised by the central banks in the major financial market centers. And it will be something that traditional trad fi, right, traditional markets will actually be able to utilize. And, you know, that, that's a, that's a major evolution. Um, when you just go back even a few years to, to think that that would be happening.

Yeah. I'd like to double-click on that. Like how, how is it, and maybe for listeners, like how is it set up today and how do you envision this transition happening where you involve some of these stakeholders like governments, other financial institutions into the fold?

Yeah.

To get involved with like USDC.

Yeah. So we started by building on the existing framework for electronic money and payments in the United States. So we started by building on both federal and state laws around electronic money transmission. And we became the first company in our industry to be licensed from sea to shining sea. And there are some specific licenses like the New York Bit License and other things that kind of add belts and suspenders, let's just say. And then there are specific rules around stablecoin reserves that we follow that are also, for example, standards set by New York that kind of require only T-bills, overnight repos, and cash, like sort of things like that. But we basically have started by focusing on that. But then as we've built out globally, we've now started to layer on other major regulators. So the central bank and prudential regulator in Singapore, the Monetary Authority of Singapore, also regulates Circle. And so when we distribute USDC into Asia out of Singapore, they have a whole regulatory apparatus on top of us there. They don't regulate the reserves of USDC, but they regulate its activity and use and distribution at a retail and institutional level to counterparties that we face in Asia. That's allowed us to then put in place a distributed treasury infrastructure layer where we have, for example, direct banking infrastructure in Singapore and Hong Kong that allows market participants to create and redeem USDC from those local banking systems easily. A big milestone, just to give you a very concrete example, and it's where you're sitting, which is in Europe, happened on July 1st when Circle became the first global stablecoin issuer to be regulated, licensed, and fully operational with USDC as legal electronic money in the EU. That was a— and, and our euro stablecoin EURC as well, which has been growing. Now that really was a change to the overall architecture of supervision, reserves, and the whole way this kind of works. And there's going to be a lot more of that to come. So in order to do this, we obviously work closely with the lawmakers, the European Commission, the, the people writing the, the, the standards for supervision of stablecoins, like the European Banking Authority, the Banque de France, the central bank that directly has the supervisory relationship with us. And those, those regulators actually needed to coordinate with US regulators as well to say, okay, we're going to have a dual issuance model. USDC is going to be issued in the US, and now it's going to be issued in Europe and, and come up with a way to enable that USDC to be fungible no matter where it's issued. And so we developed a whole supervi— supervision, risk management, reserve management, and, and what we call a kind of treasury rebalancing system to ensure that we always have the adequate reserves under the supervisory standards of Europe in order to, to back the USDC in circulation for European entities. And the ability to change that on a daily basis as, as the market moves. So we're partnering with lawmakers, regulators, central banks to construct the framework that makes these fungible digital currency units work. The same thing is coming in Japan where they actually have like a foreign currency stablecoin framework and a whole reserve model. So USDC can be reserved for Japanese holders. So basically you're seeing all these governments stand up these frameworks and it's a really exciting thing because we're building the internet financial system and we're doing it in partnership with governments, with banks, with the trad fi infrastructure. And we're making it work in the way that the users in crypto know and love, which is like, I've got my public blockchains, I've got my fungible USDC and I know it works. I know it's redeemable and I know it's, it's, it's well regulated and supervised. Wherever I am in the world. Um, so that's really— it's evolving in that way.

Can we, can we touch briefly on the reserves, uh, for Europe in particular? Like, are you referencing like Basel rules, which banks, you know, need to have a certain capital, you know, reserves to, um, based on however much assets they have? Or is this a different framework that they're holding you to?

So Mika has very specific capital rules around stablecoins. So Basel rules are obviously applied capital requirements, equity capital requirements, and/or cash capital requirements that are against all of the risks, including obviously the balance sheet risk, liquidity risk, market risk, everything that goes into a bank, which is much, much higher risk. So Um, in, in the EU, the current regulations have a 3% capital requirement, uh, held against reserves, uh, for European persons. And so we, we meet those capital requirements, obviously. Um, and, um, uh, you know, the Payment Stablecoin Act that is in front of Congress right now would grant the Federal Reserve the ability to determine the appropriate capital requirements for stablecoin issuers, for example. And if it was delegated down to say, like a state like New York, they would also have the ability to tailor the capital requirements to the institution. And I think tailored and risk-based standards work. We just published, our chief economist Gordon Liao, just published a very, very detailed framework for capital asset treatment for central banks with regards to stablecoins. It's an outstanding framework that we developed— he developed, I should say— and is now in the public domain. We've contributed that to Basel, to the FSB, and we share it with central banks everywhere. But I think it really looks at specifically the risks, uh, involved in stablecoin issuing, um, and, and, and in reserve models that are, you know, based around things like T-bills, repos, and cash. What are the risks? How do you think about capital, um, and liquidity and market risk? And then operational risk that has to do with a multi-chain deployment and the risks of, of networks going down and the risks of, of, you know, actual key material storage for minting and burning. And like, there's a whole bunch of stuff that's specific to a stablecoin operator that need to be considered when you think about the risk treatment and, and kind of capital treatment that's needed for an issuer.

Let's talk CBDCs for a second, Jeremy, as we're touching on like governments and Circle's interaction with them. Will— do you think the US government will launch a CBDC? Should they launch a CBDC? And what would Circle's interaction with them be? Is it a competitor or a partner?

Yeah, so a few things on that. I think First, there, there appears to be zero appetite in the United States for a retail CBDC. Um, there's sort of zero appetite at a political level. Um, and I, I don't know that there's, there's an appetite at a retail level as well. And so you have to get through the political appetite, uh, to ultimately do it. And then it's, you know, it's a long-term thing. Um, my, my view is, is, um, is, is this. Just like your first question, which is like, what's the architecture of the dollar? Well, if the architecture of the dollar is like a cluster of Oracle SQL databases and FTP servers and text files and like, you know, old, you know, mini computers, like I would like to see that improved. Like that should be, that should be built on cryptographic primitives. It should be built on consensus algorithms. It should be built on distributed ledgers. It should be modernized to the best architecture that we know. And that is an infrastructure upgrade that I'd like to see the United States make at a wholesale central bank infrastructure level. That should be it. And so, if me, Circle, if I'm, say, facing the Fed and I'm holding value with the Fed and I'm backing my stablecoins with reserves at the Fed, in some future state, I would want to face them using crypto infrastructure, not FTP servers and like old, old, old databases. Like, so I want to see that improve and that improvement would benefit the whole financial system, like at a wholesale level. I think that's important. And I think that work and that research actually does continue to go on in places like the New York Fed. So I do think that that pursuit is, is a worthwhile pursuit. But the intermediation of economic activity and the innovation in terms of the delivery of how that gets into the hands of businesses and consumers and households and financial institutions, that needs to be private sector led. The pace of innovation in technology is going to be relentless. Competition is going to be relentless. Improvement is going to be constant. And you really— this is the division of labor, right, between the public sector and the private sector. Very clearly the private sector is going to have a pace of innovation, uh, that is, is far greater and will be how this, you know, when you think about the transformation that the internet delivered in communications and media and retail and software and so many other things, um, if, if that same kind of transformation is going to become possible in our economy, in our economic systems, you want that private sector to be doing that. But you need really good, you know, you need good regulatory models and supervisory models to construct that.

Yeah. Okay. Let's take it back to the kind of first question I asked at the beginning about like, okay, stablecoins increase velocity of money. How will that change the internet? The thing I want to try to pull out of you is like, I know it's an— I know it's a question that almost can't be answered because what the internet did for information, it made it free and instantaneous. I think our belief, the three of us, is that crypto will do the same for, for value transfer. There was no way to predict that by putting a GPS on your phone you would, you would get Uber, or, you know, by putting a camera on your phone you would get Snapchat and Instagram. I, I get there's no way to predict that, but maybe tell us your not 1, 2, 3-year prediction for, you know, approvals in Europe and things like that, but like your 5 to 10 to 15-year vision, as, as much as you possibly can.

Yeah, yeah. So, so you probably heard me say like you can't predict it, just like you can't predict what apps got built on phones and stuff. Yeah, so that is definitely true. So I, I think, um, so here's what I think. The, the frictionless movement of, of money and basically like taking the cost out of moving money is a big deal, and, and that in and of itself will grow just transaction volumes and the speed with which commercial and financial activity can happen. I think that's inevitable. Uh, and we're at the very front edge of the curve, um, uh, of that happening. And I think that is a 5 to 10 year kind of thing that, that, that very steep curve of kind of money velocity and economic activity. But the really exciting thing is is actually what happens when machines can intermediate value exchange, where commercial relationships, commerce relationships, labor relationships, financial relationships can be codified in code, literally, and deployed on open public transparent compute infrastructure, AKA public blockchains in the form of smart contracts. And you can start to have, uh, you know, really powerful forms of intermediation that take place with that very safe base layer of money. And it's sort of machine-driven, uh, economic coordination That is the breakthrough. And that is the fundamental breakthrough of blockchains. That's actually, when I, when I talk about like Circle, we're just hitting our 1.0, which is we finally got the HTTP for dollars on the internet working. And it basically, you can move it frictionlessly. That's like 1.0. 2.0 is the intermediation of much more rich forms of value exchange that exist in the real economy. And so, that is taking more traditional primitives of the financial sector and bringing them on-chain. And so, we're already accelerating into that. DeFi is that. DeFi is on-chain financial market primitives, borrowing, lending, options, exchange, futures, derivatives, We're taking these primitives. Now, I want to start layering in other assets, and I want to start layering in intermediation of those using those primitives. That's when it becomes extremely powerful. Or I want to build a corporation where I'm able to enter into labor relationships flexibly, globally, and have the the labor contract and the economic contract of the labor contract manifest in smart contracts executed on-chain with transparency for everyone, with more efficient participation and delivery. I want to have my rights as a stakeholder in an organization expressed on-chain, and I want to be able to have that also be something that I can, uh, take advantage of to conduct value exchange economically. So, it's when we start taking the primitives of what corporations are, the primitives of what markets are, and I think something as basic as the time value of money, which is effectively savings and lending, just broadly as a concept, if we can actually bring the primitives of the time value of money on-chain as composable building blocks, You can do extraordinary things. And so, I think we're seeing the early incarnations of this in DeFi, but in 5 to 10 years, again, the amount of invention that we're going to see in machine-mediated commerce and finance is going to, I think, be off the charts. And I think you know, there is an AI dimension to this as well, because I do think that AIs will be able to spawn and produce contracts, uh, that are, you know, auditable, verifiable, um, in, in powerful ways. And, and those AI agents will then intermediate on top of those spawned machines that are deployed on these networks and will be able to do it transparently and safely. and stablecoin will be the preferred unit of account and medium of exchange in that context. And so there's kind of a velocity curve of innovation that is both developer-led and then compounding techs that come alongside it that we have to look forward to as well. And I'm happy to go anywhere on that question, but I think As I said, I think even just the basics of how can credit, unsecured credit, real risk-taking in the economy, unsecured credit, how can unsecured credit move on-chain is one of the biggest opportunities that exists in the world. And when you look at that $100 trillion of legal electronic money, so much of that is credit money and it's levered capital-based models for that. If you had full reserve money and you had a super efficient credit intermediation engines, um, for unsecured lending. Like, that to me is just an extraordinary, uh, large opportunity and, and, and growth, um, that, that will be, you know, kind of like the engines that have powered, uh, these other industry transformations with the internet.

How do you envision that working? Um, I think I agree with you, like, DeFi is not a very capital-efficient system, and I think that's one of the things that you keep hearing, like, it, it needs to be overcollateralized or fully collateralized, right? Because a whole host of reasons. Um, historically credit has been enforced with violence or the perceived, um, perceived sense of violence, meaning there's, yeah, there's a government that can step in, there's a legal framework.

Yeah.

So there's been attempts at this, but how do you conceptually, how do you envision under like unsecured credit coming on chain?

Can be in a lot of ways. I think, um, so first, uh, we have a model today of private credit, and actually private credit has been growing dramatically over the past, uh, you know, decade or two. And, um, that private credit, uh, tends to be at the, uh, upper end of the economic system and tends to be, um, the providers of the underlying funds for the private credit, I mean, they're quite varied, but they're all institutional high net worth. It's like, I, as like, let's say I'm a kid out of college with $100K salary. I can't put money into Apollo. That's just not available to me. But private credit has become very significant and that's very different than bank credit. Um, and it, in a sense, it is a full reserve model, right? You're, you're taking funds and then you're lending those funds and you have a specific return on investment that you expect from that, the credit instruments that you're, you're purchasing into your fund. Um, so you, you have a model like that and one could imagine a private credit market that exists in an on-chain capacity. So I think that's very much something one could imagine. And there are really interesting protocols that are doing this today, right? We've seen attempts at doing this with things like Maple, Goldfinch, CreditX, you know, Huma Finance. There are a number of really interesting players that are doing things in this space. And we've invested actually in a number of these because we're very bullish on the concept. A private credit market, you know, first you can imagine an infrastructure that is generalized where, you know, anyone who is legally able to stand in the middle of people who supply capital and people who borrow capital, that could be a bank, that could be a private credit fund, that could be, you know, some sort of dealer, right? There's a lot of different imaginable structures, but you can also imagine like, permissionless pool models that do this, where at least there's some proof of, you know, I'm a real person or I'm in good standing, et cetera, like different dials that you can turn on that. But effectively, my fundamental belief is that the internet is extraordinarily good at at, at supporting long tail markets. And I, I've been saying, saying this on a number of different interviews, but like Chris Anderson, the editor of Wired, wrote this famous piece, The Long Tail. It was around web, the birth of Web 2.0 and, and the long tail, just internet platforms because of their efficiency and the efficiency of information and their global scale. can, can kind of match, you know, essentially buyers and suppliers on a market or creators and viewers or whatever, you know, participants you want. It can, it can go super, super niche and it can go way down the tail. And you see this in almost every major platform that the internet has built at scale. And why can't we have that for credit and debt? Like, why can't we have super long tail credit and debt capital markets? We should be able to. We have some like kind of, I think, kind of bulky ways that we do this today, like credit cards or, uh, you know, um, you know, kind of, uh, real estate financing. Um, you know, but at a business level, at a small business level, at a medium-sized business level, at a household level, an individual level, we should be able to have like very, very efficient markets where the credit decisions— and I know part of your question was the government piece here too— but where the credit decisions are fundamentally made either by a machine or they're made by a machine assisted by a qualified participant to do that. And where the credit pools themselves may have risk. And so if it's a— you've got suppliers of capital that are sophisticated, i.e., qualified investors, whatever you want to give as a categorization, well, they can lose all their money because they're sophisticated, right? Um, and if you have, say, more general, like retail, um, those protocols can provide insurance pools, and those insurance pools can provide about— I mean, you know, FDIC is just— is Federal Deposit Insurance Corporation. That was the answer to the run on banks issue, there was a different answer, which was full reserve banking, uh, which is what I believe in. Uh, but, uh, the, you know, that was mutualized insurance, right? Through this like supervisory structure and capital requirements and all that. But like you can absolutely imagine, um, insurance models, including private insurance models, uh, where the, the insurance itself is, is, is, is, is, is priced and, and, and managed on chain as well. Like all these become composable. So like you have insurance and you, and you know, you could have that held to standards where, you know, retail participants can supply, you know, I have a balance of USDC and I'm like saying, yeah, I'm, I'm, I'm allowing it to be used. Uh, but I still have a demand deposit equivalent. I can get it 24/7, 365, almost like AAVE-USDC. I can, I can take it at any time, but underneath it's fragments of it because the cost of moving value is zero. Like fragments of it are being utilized in different ways by, uh, by, by people who, who need it at any given time. And that those, those kind of credit machines are making that really efficient. So that's how I see that working.

Well, I think you can envision a world where if, as more and more transactions are happening in an on-chain, then you have more visibility into the riskiness of a particular, you know, borrower. You might have your salary be paid in USDC through a, um, streaming payment like, um, and so you can have a, another like signer to the Gnosis Safe that can enforce not the rug risk, and then you have insurance and reinsurance.

Yeah.

Where I get stuck in that construct is I guess you'd have to KYC people like through zero-knowledge proof or whatever, but like, yeah, it could work locally. Like, hey, you have to be domiciled in the particular jurisdiction Um, and just geofence particular jurisdictions that don't have that rule of law that might not be working within a particular system that you might not be comfortable with.

Yeah, so I think, um, uh, you know, kind of credentialed, uh, you know, crypto credentials for, for, uh, for KYC attestations or other proofs, very important to all this working. Um, and, and, um, and I think we can see a path there. Um, and then, yeah, jurisdictional as well. You could certainly use that kind of those attestations as a way to kind of filter for that. But one also hopes that, you know, just like the internet kind of, kind of broke some paradigms around law in terms of like, you know, if I wanted to do an audio broadcast, uh, of something to someone in Italy, like I needed to go get a radio license in Italy. Like, you don't need to do that anymore. Like, this is People in Italy are going to like listen to this and like, you didn't go get a license to do that, right? Anywhere. Now, credit extension is, is a different thing, but I would like to think that as we— as— and this is like why it's so important for the industry to take responsibility for these things, is like, if we can demonstrate the efficiency, the transparency, the, the, the risk management, uh, the ability to do these things, you know, safely and fairly Um, and, and the like, like, I, I think we can, we can see the policy environment evolve to support this kind of innovation and, and make it more international in scope. Um, as well, a lot of hairy issues in there, don't get me wrong. Uh, I don't want to, I don't want to, you know, um, you know, be too myopic. Uh, but, um, I, I do think that, um, you know, if, if we can, if we can solve um, you know, some of these things, uh, it absolutely can be global scale or near global scale in a lot of cases.

Just a, a last point on this, um, any particular roadblocks that you think might limit that, or conversely, things that might really expedite that, meaning working permissioned markets like AAVE, ARK, uh, you know, or facilitating kind of like a more permissioned environment where you have JP Morgan, Goldman interacting, these aggregators, right?

Um, yeah, I think, um, um, I mean, there are a couple things. I think, um, we're, we're, we, we need, um, you know, kind of markets and prudential regulators to be, you know, signed off on, on, uh, financial intermediaries, you know, building their products and services on public chains. Um, so that really has to— the, like, and we're seeing that happen in different places. Like, that's now— you can now build financial products in Europe on public chains. Like, Mika actually established a framework for that. Um, now, um, but, but kind of getting that accepted broadly, and, and there it really— it, it gets into kind of safety assurance, uh, uh, you know, kind of financial infrastructure robustness. Like, there's a kind of infrastructure robustness side of it, um, which will help on that. Um, I think we need, um, we need these— basically, we need these, um, kind of on-chain compliance standards to be able to function. And, and our view is that there are ways forward there, and that what the industry ought to be pursuing are ways that are better than the existing financial system, that take advantage of the capabilities that crypto has. Zero knowledge is tremendous technology. Cryptographic credentials and proofs in a variety of ways are, are very powerful technologies. We have all the wallet infra, the blockchain infra, we have all the infra to do this in a, in a way where you can present a better user experience that's more privacy-preserving, that has, you know, you know, less risk of data leakage. And so, like, I, I really want to see industry lead there, um, and, and, um, and not just sort of say, oh, there's all these laws, you got to just support them exactly as they are. So that's a place for industry leadership. But those kinds of things are key. Um, and you'll see, I think you'll see more and more certainly experiments with that. Um, uh, you know, and we're already even seeing that, uh, today as tokenized real-world assets come on. People are starting to experiment more with those things. Um, so that, that is, um, that is a key part of the path forward. And then obviously, like, part of what I talked about earlier, having stablecoins be deemed legal electronic money makes it possible for, let's say you're a financial institution, to hold stablecoins on your balance sheet, to know that it's good collateral, to know that I can use it as working capital in some transaction. And it has a very clear role defined in the US financial system and therefore also in the global financial system. That's a really important thing that I think opens up and unlocks a lot. And we've actually seen since the MICA coming online, The number of traditional financial institutions that are coming to us who want to do things using MICA-compliant dollar and euro stablecoins has grown a lot. Now we're just a month roughly into that, but like, it's very clear that when you cross that threshold into a clear legal and regulatory status, that traditional players want to play. Uh, and so, uh, this is, you know, why it's so important to get regulation in place in the United States.

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Oftentimes we say, hey, look, you know, the lack of transparency in the financial system is a feature, not a, not a bug. Certain players benefit from that. Meaning through a higher interest rate, or like the profit centers of certain institutions are high because of lack of transparency. That obviously has a whole host of problems, i.e., global financial crisis. You can't measure risk, you don't see it.

Totally.

Um, so to that point, when you think about and contrast that with DeFi, this picture of like a very transparent system, yeah, are there, um, one, like particular stakeholders here that stand to benefit a lot, or or have to reinvent their business model. Um, and I guess let's just start there.

Yeah, I mean, um, I, I'm very aligned with your worldview here. Like, I, I ideally, right, uh, those that depend on opacity and opacity and costs and price and, and, and margin kind of like get, or get their, get their, you know, lunch eaten. And there's a lot of people that sort of fall into that bucket. You see it in basic things like why does it take 3 days and cost 3% on currency exchange and this and that just to move some dollars to whatever Greece or whatever you have. But so I think I mean, look, my view is, you know, in a broad way, um, open internet infrastructure that achieves kind of these huge software-powered, internet network-powered economies of scale really transform unit economics in industries and improve products. Um, and, um, and so, like, I believe that to be the case. I believe that will be the case in retail payments. I believe that will be the case in capital markets infrastructure. I believe that will be case in lending. I believe that will be the case in asset management. Um, like in a lot of these categories, um, you know, there's, there's, there's, there's probably too many players, um, in many cases. And, and there's the ability, um, to offer far superior products, um, that, that are less risky, more efficient, um, and, and deliver, you know, more value to users. Um, so I think, you know, all those categories, um, are at risk. If you take again, the, the, the, the lens of the internet, right? Media companies. If you go back to 19 or just to the year 2000, right? Media companies hadn't really been disrupted by the internet yet, but it was like the technology was almost there. But I don't care what kind of media company you were, local newspaper, national newspaper. Magazine, international magazine, broadcast outlet, cable company, satellite company, you know, uh, classified, you know, pages, like whatever it was, whatever media company you were, there were tons of you. And now there are far fewer. I mean, the stories in the news, just like literally as we speak of like these giant media empires that are just kind of collapsing on themselves, Time Warner and Paramount, and it's like they're getting sold for scraps. Like, it's incredible to see. Um, and, and so you'll see consolidation, you'll see fewer, you'll see bigger, better internet-native platforms that are more global in nature. Um, and, um, yeah, I mean, um, anywhere where you see really big profit pools, um, you know, watch out.

On that point, uh, you're someone, of course, as a technologist, even before crypto, you know, people should go look at your background. Technology can be a very centralizing force, and you've seen that. Um, yeah. How do you think crypto plays into that in a world with AI? Um, and really competing against centralized solutions and maybe counteracting that centralization force or become more centralizing in and of itself?

Yeah. I mean, I really hope that we can build more decentralized infrastructure here. Um, I am a very firm believer in the power of distributed and decentralized systems. And, um, I think one of the most exciting things about crypto and about blockchains is the idea that economic actors, um, anywhere in the world can safely engage in commerce and safely engage in financial transactions between each other peer-to-peer. And do that on these networks. Inherently, we should be able to see that kind of world emerge. And that's why I think the example I gave, so the concept of, say, private unsecured credit markets being on-chain, what I'd love to see are open source protocols that are community governed, that are sort of stakeholder-based, continuously improved in an open source manner where anyone can build on top of these. They can build on top of these freely. Lots of different business models can be built on top of them. And where that, that becomes a powerful decentralized infrastructure that supports thousands of different business models. Um, and, um, It's interesting to watch things like Uniswap as an example, as a protocol infrastructure, community-governed that people are building on top of, they're composing it into, and V4 will do this even more, right? Instantiating their own unique markets. And Zora just had this cool launch with their secondary markets with Uniswap, which I think was a really compelling example of How do you build something that lots of people can build on top of and it's fundamentally decentralized? I'd like to see more of that. And I think those are the things that will keep this resilient in that way. I think, yeah, so that is my hope. And look, the vision of token incentives in the creation of a broader range of products and services, whether that's, you know, what we've, what we've sort of seen in DePIN as an example, um, where we're kind of connecting real-world incentivization and activity with on-chain economic, uh, coordination and the like. That's a very powerful, very, very powerful thing. And those should be contributing forces to the rebuilding of various types of platforms that have historically concentrated to become more decentralized. So like, I'm, I'm definitely a believer in that. And that, you know, in the apps, not infrastructure debate that's sort of going on in, in the, in the broader crypto world right now, like, that's what we really want to be able to see. We want to see apps that are using, you know, digital tokens and, and broader forms of, of coordination that are more decentralized and to prove that that can actually be producing of meaningful value at an end-user level and at a franchise level. I really love to see more of that. So I'm, I'm very, you know, I'm very aligned with Chris, Chris Dixon and his, his, his worldview on, on a lot of this.

Jeremy, switching gears a little bit, I said I wasn't going to ask you any, like business model related questions. But one comes to mind as you talk about this, which is just related to interest rates, we're in like a weird interest rate regime right now. And I think everyone looks at Circle's business and says high interest rates must be great for Circle, they make a lot of money in higher interest rates. But I'm curious about like the other side of this, which is if you lower interest rates— I mean, you, you keep referencing velocity of money. So when you pull interest rates down, that increases the velocity of money. So one side of the spectrum, high interest rates make, make a lot of cash flow short-term. Low interest rates increases velocity. Which one's better First Circle's business?

Yeah, so there are a couple things on this. So I'm, I'm, I believe, I believe that we need lower interest rates. I, I believe we need to move to lower interest rates for, for good economic policy reasons. And I believe that, um, you know, we, we need to kind of do that, you know, uh, with, with some haste over the next 18 months. And I believe that that is You know, that would be a very good thing for the real economy. It would also be a very real good thing for the digital economy. I think it'll also be a very good thing for the crypto economy. And, and so, um, my belief is that a, a, a more neutral interest rate environment would be the ideal interest rate environment for a platform like USDC. And so we, we want to increase velocity of money and activity, increase demand for high utility money. And so we're building platform infrastructure. We're building the general infrastructure that makes this a super, super valuable and useful utility. We're making the highest utility value money in the world. And, and we're getting developers to build on it. We're getting network participants to connect to it. We're building a stablecoin network that is a platform and a utility that people can build on. And, you know, that has its own intrinsic network effects. That has its own intrinsic utility value. And so when you, when you see money velocity increase and you see interest rates go down, we think that can be a huge accelerant in the adoption of our stablecoin network and benefit all the participants on that network. So we, we really believe that, that, that will be the case. Um, and so, um, we, we think that will be, you know, fundamentally far more value creating for Circle than the extra yield that we might get, uh, in a higher interest rate environment. Cause you're talking about a low velocity money environment. And while interest rates have risen, because USDC is far more accessible to the banking system and historically very significant with institutional players, right? We had circulation decline as interest rates went up. And as soon as interest rates sort of stabilized, we started to see USDC grow. And then as the expectations of interest rates coming down have gone up, USDC circulation started to grow, grew very materially in the first half of this year. And, and so I think there's an, there's an interesting and powerful effect there. Um, and, um, we'll obviously have the benefit of a full, uh, couple of full cycles, uh, to help us better understand this, uh, as we go forward.

Uh, Jeremy, on that point, is the dynamic the case where like most of the USDC, and correct me here if I'm wrong, is really just speculative related? Like it's, it's, um, As more and more of the share of what USDC is used for, like for instance, payments and commerce increases, then, then that dynamic probably just changes quite dramatically or just different.

So it, when I think about economic money velocity, right? Um, when interest rates come down, most of the money velocity, uh, that, that happens with, say, you know, ACH dollars or Fedwire dollars, let's just call them that. Um, is actually speculative, right? So the vast majority is speculative. The, the, the, the, you know, bank dollars and, and, um, and kind of Fed wire dollars are like, have a far more speculative use ratio than stablecoins do today. Like 98% of the activity is speculative. That's a good point. And so, you know, growth in markets activity, which is a sort of risk-on model where people want to They're not satisfied with 3% and they want to invest in assets that they believe will return a higher return than 3%. That is a huge use of capital in the world. And so the velocity of capital in capital markets themselves is a driver for growth of USDC, for sure. At the same time, growth in sort of velocity of money in commercial transactions and in demand for, um, settlement in commercial transactions also increases as you have a lower interest rate environment as well. And so we think there'll be a, a correlation between the, the capabilities of, say, the USDC platform and what's happening with on-chain commerce and finance and all these things that we've talked about. There'll be a correlation between that and USDC growth and adoption. And, you know, interest rates will certainly play a role in it, but I, I also think we're just continuing to build out the utility irregardless of market cycle as well.

Jeremy, there are a few other stablecoins that launched in the last year or two that rolled out. They're like yield-bearing stables, so they have like native yield on the stable. Have you guys ever— like Mountain Protocol is one of these that we had on Empire— have you guys ever thought about passing the net interest margin on to users as a way to either dominate the market or steal market share from competitors or whatever that may be? Like, what's the calculation like in your head there?

Well, it's very straightforward. It's illegal for us to do that. So if we want to, like, obviously—

why is that? Why is that?

Because if you're, if you're, if you're offering someone an investment product, it's a security.

Uh, yeah, yeah.

So if you're, if you're offering something where people are, are basically purchasing an investment, uh, uh, product from you, then you're offering them a security. And so, and we are actually already regulated as a payment system and as an e-money payment system technology, which makes that illegal for us to do. Um, and so stablecoin laws around the world, like MICA in Europe, Payment Stablecoin Act in the US, the stablecoin laws in Japan, what's, you know, the laws that are coming in Hong Kong, all these, all of them are non-interest bearing. Um, regulators want to treat this as cash, as electronic money, and as payment system technology. Okay. And I think that's the right decision. Now, should people be able to seamlessly move between like, like cash and an investment product and do that in an on-chain way through a smart contract? Yeah, absolutely. And like, actually, if you look at all the tokenized RWAs, like almost all of the volume coming in and out of those is using USDC, the cash to a smart contract to, to, to these. Token instruments. I think having kind of free-floating, free-circulating investment products with no KYC, there may be regulatory arbitrage to go after that. But I don't think that that survives the broader kind of framework here. So we definitely want USDC to be the best digital cash the best digital dollar in the world. We want it to be that. And we also want to make sure that anywhere where people want to go between that digital dollar and yield, we should be the best way to do that. Whether it's DeFi yield, unsecured on-chain lending yield, someone investing in a T-bill yield, doesn't matter. We should be the settlement leg and the digital cash for that or the one of the preferred, right? We, we, we want to be a major player in that. Um, and, uh, and so I, I think that's sort of broadly how, uh, how I think about that today.

Do you see yourself building these stacks on top, or would you let someone else, kind of this sort of open market, just build on top?

I mean, we're— we view ourselves as a sort of market infrastructure, market-neutral infrastructure company, and we continue to build more and more infrastructure. So we're building more and more features into the USDC protocol. We're building the cross-chain transfer protocol. We're building gas abstraction mechanisms in a standardized way across different ecosystems so that people— our goal is that a user should be able to show up and be able to transact directly without knowing what blockchain they're on, without knowing what blockchain their counterparty is on, and without knowing what gas even is. And they just have stablecoin, and they can, and they can interact with an app, or they can interact with, uh, in, in an economic, uh, transaction. So we want to build the infrastructure on top of open networks to do that, and we want to make that widely available to developers, um, and, and, you know, abstract away a lot for developers to do that. Um, we do have developer products that we monetize, like our programmable wallets, which are a way to build like smart wallets and self-custody wallets and developer controlled wallets or cross-chain. Like, we do monetize some of these services for developers, but when I think about like all of the stuff that needs to be built in terms of, you know, abstractions for businesses, abstractions for end users, financial markets infrastructures, like those should all be built out, uh, on-chain. And they are. I mean, um, I think we, we definitely do. We have Circle Ventures. We make investments, uh, uh, very small minority investments, um, in projects and teams that are doing innovative things on-chain, um, or, or with products and services that, that take advantage of some of this technology. Um, but, you know, we do view ourselves as a platform company, uh, where our principal objective is for people to build stuff on top of what we do.

Uh, if you didn't like the, uh, net interest margin question, Jeremy, you, you definitely will not like my next one, which is, uh, as a founder in crypto, I think there's a lot of folks who, I mean, are basically waiting for the IPO markets to open up. And I'm sure you can't share too much, but I will say it's like, it's all eyes right now on Circle and Kraken. And I really don't know where— we had Dave Ripley from Kraken on the pod, and he was saying, I think, what he can say about this. But can you just tell us, like, again, I'm sure you're not allowed to talk too much about it, but like, what are your thoughts on going public and IPO and things like that?

Yeah, so I can't obviously comment on any specific regulatory process that we have going on. Um, but, uh, what I can say is this, um, we are very focused on becoming a global US-listed publicly traded company. Uh, we're committed to that, and, and we think it's really, really important to the growth of Circle. Um, and you know what, what I would say is We have built our brand and we have built our products, uh, very much around trust and transparency and accountability. And that's, that's a big part of how people think about us. And as we think about this next chapter in our growth, as we go from the early adopter phase of this technology to the mainstream adoption phase of this technology, we believe that being a publicly traded company in the US will increase the trust, increase the transparency, will be holding us to the highest governance standards, ethical standards, and forms of public accountability that can exist for any corporation in the world. And that's value— that's valuable for us, and it's valuable to the stakeholders. If you're a counterparty facing USDC, you're a counterparty facing Circle, and whatever, wherever you are in the world, having that amount of, of, of transparency and accountability is going to be really important. So we just think it's, it's just part of continuing what we've done as a private company and tried to be exemplary as a private company, and just doing that in an even bigger and more important way. So it is definitely a focus for us, and, and we, uh, we fully intend, uh, to become a US-listed company.

Yeah, I have two closing questions, Jeremy, if you could entertain them. I know we've been going on for an hour. Um, I guess the first one is, what has surprised you the most in crypto?

What has surprised me the most in crypto? I mean, I guess like, um, I, um, meme coins and NFTs.

I mean, like, any particular one or just the phenomenon?

No, just the whole, the whole, the whole phenomenon, uh, and the way in which those phenomenon emerged and were popularized. Those were not things that I anticipated. And I can make arguments about the good and the bad. NFT, to me, is actually a very important technology, very important utility. NFTs as a pattern is critical in a ton of different ways. And it's interesting, I mean, even memes are affinity relationships are are really key for communities and for brands and for so many others. And so it's a really interesting experimental surface. Um, and so, uh, you know, those are, those are surprising, but now actually, as I sit back and I, and I think about them, like the application of those are, are pretty significant. If you're, if you're a savvy brand, like you're looking at all of that as something that you can build on.

As a, okay, as a, I'll cheat as a follow-up to that, because you saw the evolution and the growth of the internet. Is the level of surprise in crypto greater or less than as you saw the internet unfold?

Um, you know, I, I think, um, so far I think the surprise is, is, is lower than, uh, the surprise from the internet. But I have— you have to put it in context. The sort of Internet 1.0, Web 1.0, I view as like where crypto has largely been, has sort of been like in a Web 1.0 equivalent in terms of development and maturation and utility and other things. And like when Web 2.0 kicked in, which really was starting in like 2003, um, and, and really scaled out, um, from there, like that's actually where I think that crypto is kind of right now. And so I think the vast majority of the, of the surprises which are going to come from applications and broader utility, um, are— that's where I just think we'll see a lot more surprises, a lot more surprises to come, um, uh, than, than so far. Yeah.

Okay. Well, then that ties in nicely to my last question, which is, what is your favorite on-chain app?

I have to be very careful.

Uh, none of this is legal or investment or endorsement.

Careful about that. Um, yeah, yeah. So I, I'm, I'm gonna say no comment on that.

Can I—

I don't want to say anything about something that, that could influence people's, uh, perspective.

And fair enough.

Let me—

let me— I'll take one question here then to, to wrap this up, Jeremy, which is Santi and I have both invested in a lot of companies and talked to a lot of founders who are very early stages in their journey. I would credit you as having the best and craziest pivot in crypto history. Um, with— I mean, for people who were in crypto in 2016, 2017, Circle was a wildly different company with Poloniex and the mobile app and the OTC desk and all that kind of stuff. What do you say to founders who are maybe 1 or 2 or 3 years in their journey, struggling to raise right now, maybe hitting some walls? Like, how do you— how would you advise those new founders?

I mean, there are a couple things. I mean, Like anything's possible, but like, you know, when, when you're dealing with that, you have to be willing to, to sacrifice things, right? You have to be willing to like basically throw things out, start over, jettison things, shut things down. Like you, you just, you have to be willing to kill things. Um, and like, this isn't just a Circle lesson. Like this is my entire career. I've probably built 50 products. I don't know, maybe more. And like the vast majority of them were not successful, but there were a number of them that were wildly successful. And so you, you, you know, you, you need to, you need to accept those failures and, and not just be dogmatic about it's gonna work. It's gonna work. It's gonna work. Um, there's also, I think, a related thing, which is, you know, what's interesting about the statement about this pivot in, in some ways there was a pivot in the sense of like, we, we, we stopped doing certain things or changed certain things. But actually there was more of a doubling down, which is that USDC was the origin vision of the company. And in 2017, we started executing on it. In 2018, we launched it. In 2019, we got really strong product market fit. And in the context of a lot of other economic constraints and like the shape of our P&L and what was happening in the industry, we said, this is the heart and soul of the company. This is the vision of the company. This is why we founded the company. We're going to double down or triple down like on that. And so just got rid of every other distraction and just got focused. So we just got more focused on the fundamental founding vision as opposed to like, what should we do? Let's come up with something new and we'll pivot over here. It was more of a tripling down on the fundamental vision. And so I would say to founders is like, I guarantee you where you started with your vision, like you've had to like adapt and change and evolve and try different things, it's like really reach for the core of like what is the passion that motivates you? Why did you start what you're doing? How much conviction do you have? And do you have line of sight to like to push on that? And that might mean like shaving back some of the things that you've, you've done that maybe haven't proven successful, but the, the heart of it, or, or one of the really fundamental pieces of it that you do see really get focused on that.

That's great advice. I love it. Jeremy, always rooting for you. Appreciate your time.

It was really enjoyable. Yeah.

Thanks for coming on, Jeremy. Really, really nice seeing all the traction and progress. I can't remember the last time I funded a deal with a wire transfer. In many ways, it's a yellow flag or red flag at this point. Yeah.

Yeah.

Yeah.

That's good. That's awesome. Cool.

Thanks for joining. Thanks for watching today's episode. Just wanted to quickly mention that the wait for crypto's killer app wave is nearly over thanks to today's sponsor, Anoma, the universal intent machine. To stay up to date with Anoma, you can follow them at x.com/anoma or sign up for the newsletter at anoma.net. Thanks again to Anoma for sponsoring today's episode.