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Speaker 1: Bloomberg Audio Studios, Podcasts, radio News.

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Speaker 2: Hello and welcome to another episode of the Odd Lots podcast.

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Speaker 3: I'm Joe Wisenthal and I'm Tracy Alloway.

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Speaker 2: Tracy, I have three thoughts about stable coins.

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Speaker 3: Oh boy, here we go.

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Speaker 2: Three just three. One is I think within the broader

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Speaker 2: realm of cryptos, stable coins are real and here to

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Speaker 2: stay and probably going to be important. Two, some of

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Speaker 2: them seem like an absolute cash money maker because you

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Speaker 2: don't pay a yield to the holders. You collect the

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Speaker 2: yield for what you have backing it. It's a great

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Speaker 2: business model. It seems amazing. And Three, as the child

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Speaker 2: of the great financial crisis generation, I'm convinced that if

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Speaker 2: crypto is ever implicated in the future financial crisis, it

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Speaker 2: might have something to do with stable coins.

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Speaker 3: You stole all my talking, honest, I had like the

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Speaker 3: note written down that you know, issuing liabilities that mostly

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Speaker 3: return nothing is a wonderful business model.

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Speaker 2: What else did you could just restable?

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Speaker 1: Well?

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Speaker 3: Also, I was thinking stable coins are basically the primary

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Speaker 3: touch point of crypto to the regulated financial system, and

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Speaker 3: so you would expect some of those financial stability concerns

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Speaker 3: to potentially materialize there. And then The one thing you

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Speaker 3: didn't mention that I'm interested in is also this idea

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Speaker 3: of competition directly with the banks, and as stable coins

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Speaker 3: get more money market fund like maybe more deposit like

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Speaker 3: we have some stable coins that issue yield. Now, what

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Speaker 3: does that actually look like for the financial landscape?

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Speaker 2: Totally for traditional payment companies of all sorts. I mean,

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Speaker 2: we all know that legacy payment companies collect a pretty

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Speaker 2: big rent so to speak, for use of their network.

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Speaker 2: In theory, there could be almost no cost at all

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Speaker 2: for a stable coin transaction, or virtually minimal. It seems appealing.

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Speaker 2: On the other hand, getting people to switch on masks

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Speaker 2: from using like a sort of debit card or credit

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Speaker 2: card to a stable colin as sort of a tricky

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Speaker 2: chicken and egg problem. But you know, it's a real

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Speaker 2: competitor to an existing way of doing payments.

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Speaker 3: Also, the one thing we didn't mention is it's kind

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Speaker 3: of becoming important from a fiscal standpoint for the United States.

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Speaker 3: And you have Treasury Secretary Scott Besson saying that he

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Speaker 3: expects all this new stable coin issuance to basically increase

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Speaker 3: demand for US step for treasuries for mostly T bills

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Speaker 3: and so there's a lot to talk about.

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Speaker 2: There's a lot to talk about. We really do have

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Speaker 2: the perfect guest today. We are going to be speaking

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Speaker 2: with Jeremy o'lary. He is the co founder and CEO

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Speaker 2: of Circle Internet. They recently went public in early June

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Speaker 2: and they've had a monster IPO, incredible demand for this company,

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Speaker 2: incredible enthusiasm there of course, the sponsor of USDC one

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Speaker 2: of that. I think it's the second biggest stable coin

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Speaker 2: out there after Tether. So Jeremy, thank you so much

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Speaker 2: for coming in studio here on odd lots.

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Speaker 4: I'm really excited to be here. As you guys laid out,

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Speaker 4: there's a lot to talk about.

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Speaker 2: I said it in the beginning, stable coins seem like

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Speaker 2: an incredible business model because here you have all these

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Speaker 2: people holding a non yield bearing token. They're backed by

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Speaker 2: in many cases, yield bearing assets that incorporate a lot.

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Speaker 2: On the other hand, in circles case, a lot of

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Speaker 2: the money that accrues to you go straight to coinbase.

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Speaker 2: Explain to us your relationship with coinbase, and so people

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Speaker 2: can understand sort of the economics of the money that

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Speaker 2: you bring in and then how it goes out the door.

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Speaker 4: Yeah, maybe I'll actually start with something a little bit

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Speaker 4: higher level than drill in. So when we think about

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Speaker 4: our business and what we have built and what we

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Speaker 4: operate is, we think about it as an Internet scale

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Speaker 4: platform and network utility.

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Speaker 5: So we're a set of software.

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Speaker 4: On the public Internet that people can build on and

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Speaker 4: integrate to, and it provides this utility, which is this

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Speaker 4: global utility for storing and moving value around the world.

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Speaker 4: And there's a regulated part of it, and there's a

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Speaker 4: technology part of it. And so as part of that,

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Speaker 4: we want to build the largest stablecoin network in the

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Speaker 4: world with the most usage and the most transactions and

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Speaker 4: the most utility. We talk more about what that looks

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Speaker 4: like and as we built this, as we launched this

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Speaker 4: back in twenty eighteen, we knew that we needed to

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Speaker 4: really focus on building upfront utility and then building really

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Speaker 4: good distribution relationships. And so in our business, we have

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Speaker 4: sort of the scale of the network, which is measured

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Speaker 4: by the number of people who can reach in their

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Speaker 4: pocket and use USDC. There are over six hundred million

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Speaker 4: accounts that can access and use USDC around the world.

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Speaker 5: A lot of that is through distribution partners that we have.

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Speaker 4: Coinbase is one, Finance is another, and many many more.

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Speaker 4: You can find USDC on Robinhood, on Kraken. You can

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Speaker 4: find USDC in super apps in foreign countries like New Bank,

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Speaker 4: the biggest neo bank in Brazil, or in a product

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Speaker 4: like gcash and the Philippines, which is the dominant financial

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Speaker 4: product for many Filipinos.

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Speaker 5: And so we.

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Speaker 4: Make that product available globally, and we have a philosophy

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Speaker 4: of incentivizing distributors to grow with us. So I think

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Speaker 4: that's really fundamental to the philosophy. And right now, I

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Speaker 4: think we're in the early stages of building this. You know,

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Speaker 4: the numbers in the aggregate are sizeable, but when we

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Speaker 4: think about what this can grow into in the volume

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Speaker 4: of money storage and money movement that will happen in

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Speaker 4: an Internet native way, you know, we think we're still

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Speaker 4: in the very early stages of that.

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Speaker 3: I mean, I understand that argument. But Coinbase also took

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Speaker 3: I think more than fifty percent of your revenue from

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Speaker 3: reserve assets last year, which seems like a lot to

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Speaker 3: pay for distribution when you're already the second biggest stable

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Speaker 3: coin in the world. Is that partnership you know, well,

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Speaker 3: the math always makes sense to you, and I guess

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Speaker 3: how often do you actually renew that agreement?

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Speaker 4: Yeah, So a couple things. So, first of all, we

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Speaker 4: have a great relationship with Coinbase. They've been such a

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Speaker 4: huge partner and really bet big on this way before

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Speaker 4: anyone else. And so I think I get Brian a

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Speaker 4: lot of credit for really seeing that USDC could be

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Speaker 4: a fundamental part of their entire business.

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Speaker 5: And really they've USDC and all their.

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Speaker 4: Retail products, their institutional products, they're building new payments products

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Speaker 4: around it. They're really betting not the entire company, but

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Speaker 4: they're betting a lot on it, and that's amazing. And

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Speaker 4: when you think about networks that were built in the past,

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Speaker 4: from the seventies or the eighties or other times, you

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Speaker 4: definitely need these big anchor tenants that really bet on

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Speaker 4: it and help drive the utility. But to the degree

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Speaker 4: that Coinbase has leaned in, that's really helped create demand

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Speaker 4: for usage in other places. So Coinbase's largest rival, Finance,

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Speaker 4: for example, is also a significant partner on this. And

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Speaker 4: I think with the Genius Act passing, which I know

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Speaker 4: we'll come back to, and regulatory clarity kind of happening

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Speaker 4: around the world, we're entering a new chapter in all

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Speaker 4: of this, we were sort of in the early adopter phase,

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Speaker 4: which was really primarily anchored in like crypto trading markets

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Speaker 4: and things like that, And now we're entering this kind

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Speaker 4: of more mainstream phase where payment companies, banks, financial institutions,

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Speaker 4: capital markets companies, lots of consumer companies, consumer internet companies

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Speaker 4: are all getting involved. And so our view is that

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Speaker 4: the sort of share of the pie, as it were,

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Speaker 4: is going to be more and more diversified and grow.

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Speaker 4: The pie will grow and the diversity of the participants

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Speaker 4: and that will grow over time as well.

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Speaker 2: Real quickly, what does the Genius Act mean for your business?

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Speaker 2: What changes pre and post Genius Act?

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Speaker 4: So Genius Act is very significant in our view, and

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Speaker 4: it's actually in some ways we've been arguing for kind

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Speaker 4: of federal policy and regulation around this new form of

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Speaker 4: electronic money to some degree since I went to the

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Speaker 4: Capitol in twenty thirteen and started articulating a regulatory view

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Speaker 4: on this, but in a very significant way. Really for

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Speaker 4: the last five years, we've been pushing for federal regulation.

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Speaker 4: And what that does is, first of all, it enshrines

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Speaker 4: in federal law many of the things that we had

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Speaker 4: made core to the way we operate transparency, having major

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Speaker 4: audits of our firm safety and soundness requirements. It ensures

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Speaker 4: that the reserve itself is effectively a cache instrument and

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Speaker 4: allows this to be treated as a cash instry trument.

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Speaker 4: And by having that federal framework, it opens up opportunities

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Speaker 4: in two significant ways. I think the first is now

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Speaker 4: if you're a corporation, a public corporation, or you're a

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Speaker 4: financial institution, you now know what these are. You can

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Speaker 4: hold these and treat these like cash on your balance sheet.

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Speaker 4: This paves the way for the use of payment stable

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Speaker 4: coins in wholesale payments, retail payments, as eligible collateral on

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Speaker 4: capital markets venues. So it really opens up the aperture

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Speaker 4: of what people can use this for, and it gives

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Speaker 4: all those financial institutions and companies the clear definition and

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Speaker 4: the faith that they can interact with this, and they

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Speaker 4: know it's bankruptcy.

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Speaker 5: Protected and all this good stuff.

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Speaker 4: The other big thing is that, and this ties into

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Speaker 4: one of the opening comments, is having this as a

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Speaker 4: defined part of the US financial system. So stable coin money,

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Speaker 4: which in my view is a new form of m

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Speaker 4: one electronic money. Having that as a defined part of

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Speaker 4: the US financial system means that it can be expanded

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Speaker 4: internationally in very significant ways. Governments all around the world

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Speaker 4: will be able to enact their own stable coin laws

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Speaker 4: as they are, and I can talk about a dozen

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Speaker 4: countries where that's the case, and they can recognize issuers

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Speaker 4: that are under federal supervision in the US and enable

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Speaker 4: those to interact with their markets. And so it opens

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Speaker 4: up the global adoption here within the regulator financial system

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Speaker 4: in a very major way. And so for us, all

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Speaker 4: of that is we view as a tailwind to have

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Speaker 4: more and more people building on top of this infrastructure

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Speaker 4: that we've been building.

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Speaker 3: So in terms of integration with the financial system and

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Speaker 3: competition with the banks, of course, you still under the

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Speaker 3: Genius Act, you do not have access to the Fed's

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Speaker 3: balance sheet. Is that right?

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Speaker 5: That's correct. So a couple things.

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Speaker 4: So one is the Genius Act doesn't sort of specify

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Speaker 4: who has access to the Fed's balance sheet. But it

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Speaker 4: does say, though, is that eligible reserves in a stable

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Speaker 4: coin can include cash at the FED, it include short

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Speaker 4: ration t bills, it can include repo treasurer, rebo facilities,

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Speaker 4: et cetera. And for US as circle, we actually just

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Speaker 4: announced very recently that we had filed to establish a

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Speaker 4: new entity called First National Digital Currency Bank, and First

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Speaker 4: National Digital Currency Bank is in application with the OCC

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Speaker 4: to become a National Trust Bank and under the Genius

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Speaker 4: Act as a large issuer greater than ten billion. You know,

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Speaker 4: we're around sixty four billion today. You know, we will

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Speaker 4: come under OCC supervision. And so we're trying to line

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Speaker 4: up the kind of infrastructure of Circle against the kind

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Speaker 4: of upcoming regulatory regime, and we want to make sure

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Speaker 4: we've got the best underlying kind of infrastructure there for

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Speaker 4: people who would build on us.

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Speaker 2: So I said in the intro that my worry is

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Speaker 2: that if there was ever a financial crisis that involves

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Speaker 2: crypto connected, it is going to be somehow due to

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Speaker 2: stable coins. Because I always think like entities that are

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Speaker 2: pegged to the dollar, the deviate from the dollar, that's

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Speaker 2: where you get into trouble. People think this is a

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Speaker 2: dollar and suddenly it's worth ninety five cents. That actually

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Speaker 2: did happen to Circle in early twenty three, very briefly,

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Speaker 2: with the collapse of SVB. Could that ever happen again

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Speaker 2: or is there a way to say this could never

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Speaker 2: happen again?

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Speaker 4: Well, a couple things, So secondary market trading is where

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Speaker 4: we saw that.

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Speaker 2: But we've you were abled, the desks weren't able to

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Speaker 2: keep it at a dollar. Whatever was that did happen.

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Speaker 4: That's because the banks were seized by the federal government

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Speaker 4: and so banking was not available over that time.

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Speaker 5: But nonetheless, it's a really important question.

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Speaker 4: It's a fundamental question, right, which is the real question

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Speaker 4: in my mind is is a full reserve model of

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Speaker 4: money a safer model of money than a fractional reserve

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Speaker 4: model of money. And in our financial system today we

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Speaker 4: do have FDIC for the fractional reserve banks.

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Speaker 5: Now that's for small depositors.

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Speaker 4: The vast majority of deposits in the banking system are

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Speaker 4: uninsured deposits. Now, some of those sit with so called

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Speaker 4: too big to fail financial institutions therefore implicitly have the

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Speaker 4: bailout power of the federal government, like we'd never let

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Speaker 4: them fail. But that's sort of theoretical. You could imagine

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Speaker 4: a scenario where the federal government doesn't have the balance

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Speaker 4: sheet or it doesn't want to create the inflation or whatever.

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Speaker 5: It would be.

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Speaker 2: The lack of political appetite.

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Speaker 4: Lack of political appetite, I mean that was on the

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Speaker 4: verge in the financial crisis, that was jamming it through Congress,

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Speaker 4: which was then challenged later. But I think, and by

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Speaker 4: the way, this gets to the genesis of circle, like

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Speaker 4: why did I start this company? I spent a number

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Speaker 4: of years like reading about what happened with the financial crisis?

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Speaker 4: How did this happen? What is the nature of money,

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Speaker 4: what is the nature of central banking, how does the

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Speaker 4: international monetary system work? All of these things were fascinating

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Speaker 4: to me. And I was running a completely different kind

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Speaker 4: of business, which is an online video technology business, and

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Speaker 4: I kind of thought intuitively that there had to be

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Speaker 4: a better way. And it was actually through my kind

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Speaker 4: of introduction to crypto in twenty twelve that I sort

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Speaker 4: of saw, hey, there might be a path here. And

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Speaker 4: while lot of people were obviously focused on bitcoin as

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Speaker 4: a full reserve sort of sound money philosophy, and I'm

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Speaker 4: sure you've had plenty of people to talk about that

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Speaker 4: over the years, but for me, at least, the idea

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Speaker 4: of sound money, of kind of having a different risk

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Speaker 4: model in the financial system was very appealing to me,

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Speaker 4: and in particular this idea.

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Speaker 5: Of fully reserved dollar digital currency.

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Speaker 4: And you know, I'm in adherent to the Chicago School

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Speaker 4: and the Chicago Plan, I should say, which was a

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Speaker 4: particular philosophy that was advanced in the aftermath of all

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Speaker 4: of the bank failures in the nineteen thirties.

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Speaker 5: And there were really two responses.

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Speaker 4: There was a group of prominent economists, some of Irving Fisher,

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Speaker 4: who's at the Chicago School at the time, and there

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Speaker 4: was industry, and the prominent economists said, hey, we could

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Speaker 4: build a full reserve model where you have essentially government

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Speaker 4: obligation money or this full reserve form of money that

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Speaker 4: is in a payment type of institution, a payment bank,

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Speaker 4: and then you have a separate institution which does credit,

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Speaker 4: and you can't create new money out of thin air

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Speaker 4: as banks do. You could only lend the full reserve money.

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Speaker 4: And the philosophy there was that that would sort of

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Speaker 4: reduce risk in the financial system and it would smooth

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Speaker 4: out economic cycles. And that's come and gone as a

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Speaker 4: debate during the safes and loan crisis, after the Great

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Speaker 4: Financial Crisis, et cetera.

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Speaker 5: But I think the advent of digital currency in particular

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Speaker 5: creates an opportunity for this that I think is really profound.

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Speaker 5: And when you think about native money on the Internet.

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Speaker 5: So take something like USDC with under genius sort of

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Speaker 5: gets defined as this cash instrument. The reserve instruments we can.

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Speaker 4: Discuss are those you know, safe in the sense of

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Speaker 4: financial stability safe, but you have a fully reserved instrument.

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Speaker 4: What's powerful about digital currency is it inherits what I

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Speaker 4: call the superpowers of the Internet, meaning it inherits the

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Speaker 4: speed and velocity of data on the Internet. And so

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Speaker 4: all of a sudden, the marginal cost of store and

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Speaker 4: moving value goes very close to zero, and money velocity

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Speaker 4: can accelerate significantly, and that creates its own risks. But

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Speaker 4: this high velocity money that's moving on the Internet, that

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Speaker 4: can move literally from any person entity, any AI agent,

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Speaker 4: any business, all these sort of machine interactions, all this

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Speaker 4: stuff that happens globally, it's kind of crazy to think

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Speaker 4: about having that be the underlying on that to be

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Speaker 4: like a bank's stack of lending risk and to have

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Speaker 4: all of these lending risks I use floating free circulating

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Speaker 4: on the Internet. And so my view is that the

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Speaker 4: base layer of money in the Internet financial system, which

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Speaker 4: I think is a new financial system that's being built

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Speaker 4: up from the ground up, that the base layer of

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Speaker 4: money needs to be this full reserve form of money

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Speaker 4: that is actually safer.

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Speaker 5: That begs the question.

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Speaker 4: Of how do you do credit and all that good stuff,

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Speaker 4: which I'm happy to give you my views on, but

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Speaker 4: I think the philosophy is actually, how do you do

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Speaker 4: something that's actually safer that people can and look at

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Speaker 4: and say, I know that this is always available. It's

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Speaker 4: not that if the bank fails, I might get my

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Speaker 4: FDI see insurance cap. It's like, I know what this is,

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Speaker 4: and there's a prudential supervisor and there's actually this enforced

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Speaker 4: risk management which improves and continues to.

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Speaker 5: Improve over time.

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Speaker 3: You know, you mentioned the safety of the reserve assets,

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Speaker 3: and this is something that is in the act. It

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Speaker 3: kind of defines what you're supposed to hold, so things

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Speaker 3: like T bills, high quality liquid assets, all that good stuff.

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Speaker 3: We've been talking about a safe asset shortage in the

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Speaker 3: financial system for it feels like decades now right, it

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Speaker 3: feels like there is not enough good collateral to go

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Speaker 3: round for everyone, and as stable coins amp up, I'm

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Speaker 3: really curious if you're worried about the crowding out effect,

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Speaker 3: if there's going to be enough tea bills in the

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Speaker 3: world to satisfy that one to one reserve requirement.

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Speaker 4: Yeah, so if it was exclusively on the basis of

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Speaker 4: short term government debt and this got to be tens

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Speaker 4: of trillions of dollars or whatever, then you might have

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Speaker 4: a mismatch there. Now, obviously regulation isn't going to stand

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Speaker 4: still on this. So the Genius Act is a significant

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Speaker 4: piece of legislation, and it defines these framework. That framework

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Speaker 4: is inclusive of cash that is overclatteralized.

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Speaker 5: Lending with repo desks.

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Speaker 4: It includes t bills of the shortest duration, and it

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Speaker 4: does include cash in the financial system, and it includes

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Speaker 4: eligible reserves at the Federal Reserve as cash as well.

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Speaker 4: And so over time, as this infrastructure scales, I think

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Speaker 4: that mixture gives us a huge amount of capacity that

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Speaker 4: I think, you know, arguably could support many tens of

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Speaker 4: trillions of dollars of value to it.

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Speaker 2: Just to be clear on one specific are you completely

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Speaker 2: non exposed to non FDIC insured deposits, so completely extricated

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Speaker 2: yourself from that system.

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Speaker 4: No, And in fact, let me describe what we do,

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Speaker 4: and we today by far operate with the greatest transparency

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Speaker 4: of any other stable coin, any other regulated stable coin

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Speaker 4: in the world, and we've done that through a couple

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Speaker 4: of things. The first is we created a structure called

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Speaker 4: the Circle Reserve Fund, which is really designed to provide

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Speaker 4: transparency into the reserves. So we did that with black Rock,

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Speaker 4: and it's an SEC registered what's called two A seven fund,

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Speaker 4: so it's a government obligation fund, but it gives daily

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Speaker 4: transparency into essentially about ninety percent of everything in the reserves.

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Speaker 4: And so you can look every day, you can search

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Speaker 4: usd XX. I pulled it up on my bladre and

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Speaker 4: you can drill in and you can see exactly the

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Speaker 4: serial numbers of every T bill, the short dration T bills,

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Speaker 4: and I think we have an average maturity of about

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Speaker 4: twenty three days in that reserve, and bloombergs is thirteen

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Speaker 4: right now, but I'm not you know, whatever is that.

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Speaker 4: That's what it says, look at the screen. That may

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Speaker 4: just looking at the screen, that may in fact.

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Speaker 5: Be what it is today. That's that's what That's what

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Speaker 5: Bloomberg says. It's great.

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Speaker 4: And then you can also see like the global systemically

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Speaker 4: important banks that we have REPO relationships with, and that's

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Speaker 4: there as well, so you can see that that's about

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Speaker 4: ninety percent. And then there's cash, and the cash about

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Speaker 4: ninety eight percent of the cash is held with a

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Speaker 4: very limited number of global systemically important banks, and these

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Speaker 4: global systemically important banks are the sort of lowest credit

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Speaker 4: risk kind of cash custodian type banks, and so we

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Speaker 4: hold the reserves there. Now you can argue about how

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Speaker 4: safe is that cash relative to you know, kind of

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Speaker 4: shout it out across all kinds of other stuff, but

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Speaker 4: that's sort of what's there today, and we need to

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Speaker 4: do that because we need intra day liquidity. We need

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Speaker 4: to ensure that in the event of five billion, ten billion,

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Speaker 4: whatever it is, that's always available. And then there's a

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Speaker 4: very very limited amount which we position in settlement banks

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Speaker 4: and reserve accounts in different geographies to ensure that it's

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Speaker 4: easy to create and redeem USDC whether you're in Singapore

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Speaker 4: or Japan, or Europe and other places. We also have

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Speaker 4: a separate issuance of USDC and a completely separate reserve

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Speaker 4: mandate and supervision in Europe as well, so we dual

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Speaker 4: issue USDC. We issue it under European rules under the

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Speaker 4: MECA Stable Corn Statutes, and we issue it in the

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Speaker 4: United States and we have created a way for kind

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Speaker 4: of fungibility across those is.

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Speaker 3: The ultimate ambition to really take on and compete with

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Speaker 3: the deposit taking institutions in the sense that you want

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Speaker 3: to get big corporate clients. Maybe the type of clients

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Speaker 3: that would put their money in uninsured well, they have

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Speaker 3: so much money, some of it would end up being

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Speaker 3: uninsured by FDIC, or they might put it in a

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Speaker 3: money market fund or something like that. And if you're

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Speaker 3: doing that, doesn't it seem like the biggest hurdle is

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Speaker 3: the lack of interest paid on stable coin.

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Speaker 5: So a couple things I think. The first is that payment.

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Speaker 4: Stable coins, which is what the Genius Act governs and

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Speaker 4: in fact mirror stable coin laws in Europe, in Japan

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Speaker 4: and in other markets that are bringing these online. These

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Speaker 4: are designed to be cash instruments that are used in

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Speaker 4: payments and as a payment system technology. They're not designed

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Speaker 4: to be risk taking instruments that you would say deposit

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Speaker 4: and lend. And they're not designed to be investment products.

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Speaker 4: You're not purchasing a security, you're not purchasing an investment,

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Speaker 4: and so they're narrowly defined and Genius Act enforces that,

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Speaker 4: and so I think that's the right design for this

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Speaker 4: base layer kind of cash instrument. Now that doesn't mean

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Speaker 4: that you can't build digital tokens that present yield. And

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Speaker 4: while people call these stable coins, I think that term

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Speaker 4: of art will probably change. People call them tokenize real

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Speaker 4: world assets, tokenized money market phones, tokenized treasuries. So we

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Speaker 4: operate a sizable tokenized money market fund product called us YC,

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Speaker 4: and us y C is fungible with us DC. So

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Speaker 4: a business, for example, could hold us YC and earn

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Speaker 4: the yield that would be your typical kind of government

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Speaker 4: fund type yield, but have the ability to instantly create

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Speaker 4: and redeem cash and instantly create and redeem yield. And

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Speaker 4: so we acquired a company called hash note, and we've

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Speaker 4: integrated that into our core infrastructure and we've just brought

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Speaker 4: this online. It's a very powerful structure if you can

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Speaker 4: have tokenized yield bearing collateral and then instantly uses as

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Speaker 4: cash for settlement, for trading, for spending, et cetera. And

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Speaker 4: so I think that that's something that we can kind

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Speaker 4: of do uniquely because we have this widely adopted payment

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Speaker 4: stable coin and then kind of marrying those two together

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Speaker 4: and we can do it in a very very capital

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Speaker 4: efficient way, because essentially the reserves of USDC mirror the

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Speaker 4: actual instruments in us y C, and so there's a

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Speaker 4: sort of fungibility between us YC and USDC reserves.

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Speaker 2: Let's talk about the competitive landscape in a few years

440
00:23:01,800 --> 00:23:05,120
Speaker 2: from now. So at some point you're going to revisit

441
00:23:05,160 --> 00:23:09,240
Speaker 2: your agreement with coinbase. Maybe JP Morgan will have a

442
00:23:09,520 --> 00:23:11,960
Speaker 2: payment coin that they're going to want to be the

443
00:23:12,040 --> 00:23:14,720
Speaker 2: preferred coin that sits there, and maybe they're going to

444
00:23:14,760 --> 00:23:17,120
Speaker 2: be willing to give Coinbase a huge split for pride

445
00:23:17,160 --> 00:23:19,479
Speaker 2: of place. Or maybe there'll be some other coin that

446
00:23:19,480 --> 00:23:23,320
Speaker 2: they use for inter bank settlements that will be tokenized

447
00:23:23,320 --> 00:23:25,679
Speaker 2: in some way to make their transfers with City and

448
00:23:25,720 --> 00:23:28,359
Speaker 2: Bank of America and other banks more competitive. We have

449
00:23:28,440 --> 00:23:32,439
Speaker 2: seen other coins rise, first digital in Asia for example. Like,

450
00:23:32,520 --> 00:23:34,840
Speaker 2: if you're paying all this money to coinbase still and

451
00:23:34,880 --> 00:23:38,040
Speaker 2: you you know distribution is so important. What is the

452
00:23:38,080 --> 00:23:41,359
Speaker 2: competitive advantage that Circle has in say the year I

453
00:23:41,400 --> 00:23:42,520
Speaker 2: don't know, twenty twenty eight.

454
00:23:42,720 --> 00:23:44,200
Speaker 5: Well, I think a couple of things.

455
00:23:44,240 --> 00:23:47,920
Speaker 4: I think the first is that to understand Circle's business

456
00:23:48,040 --> 00:23:51,840
Speaker 4: is to understand that we operate an Internet scale platform,

457
00:23:51,960 --> 00:23:57,560
Speaker 4: network utility we have very powerful internet platform flywheels and

458
00:23:57,600 --> 00:24:01,600
Speaker 4: developer flywheels. We have a network that consists of thousands

459
00:24:01,600 --> 00:24:04,840
Speaker 4: and thousands of products and services that have implemented and

460
00:24:04,880 --> 00:24:08,359
Speaker 4: integrated to our network. And so every time a developer says, hey,

461
00:24:08,440 --> 00:24:10,840
Speaker 4: I want to be able to store and move digital dollars,

462
00:24:11,320 --> 00:24:15,200
Speaker 4: they choose to implement USDC because USDC has this really

463
00:24:15,280 --> 00:24:18,040
Speaker 4: broad established network and so we have these really powerful

464
00:24:18,040 --> 00:24:21,160
Speaker 4: flywheels and as that provides new utility or a user

465
00:24:21,240 --> 00:24:24,080
Speaker 4: when say New Bank in Brazil as USDC, well, there's

466
00:24:24,080 --> 00:24:26,320
Speaker 4: like one hundred million people at New Bank who can

467
00:24:26,359 --> 00:24:28,960
Speaker 4: interact with USDC. Now the rest of the world can

468
00:24:29,000 --> 00:24:31,639
Speaker 4: benefit from that user base of one hundred million people,

469
00:24:31,920 --> 00:24:34,239
Speaker 4: and so we have network effects that are there, and

470
00:24:34,280 --> 00:24:37,080
Speaker 4: those exist in pretty powerful ways. So if you look

471
00:24:37,119 --> 00:24:39,720
Speaker 4: at the movement of stable coin in the on chain

472
00:24:39,720 --> 00:24:43,480
Speaker 4: ecosystem what sometimes people call DeFi, we have about I

473
00:24:43,560 --> 00:24:47,280
Speaker 4: believe today around seventy five percent of the market there.

474
00:24:47,600 --> 00:24:51,359
Speaker 4: And we've built protocols that make it very seamless, safe

475
00:24:51,480 --> 00:24:55,959
Speaker 4: and secure and capital efficient to transmit USDC across all

476
00:24:55,960 --> 00:25:00,640
Speaker 4: these different networks. So we've built developer platforms, we've built flywheels,

477
00:25:00,760 --> 00:25:04,840
Speaker 4: for adoption, and this is a classic internet platform model.

478
00:25:05,200 --> 00:25:10,080
Speaker 4: The other is that we've built these extraordinary liquidity network effects,

479
00:25:10,080 --> 00:25:12,400
Speaker 4: and this is really critical. So over the past number

480
00:25:12,400 --> 00:25:16,520
Speaker 4: of years, we've built out on a regulated basis infrastructure

481
00:25:16,640 --> 00:25:19,480
Speaker 4: where we're regulated and where we have integration into the

482
00:25:19,480 --> 00:25:24,479
Speaker 4: financial systems of Singapore, Hong Kong, Japan, the United Kingdom,

483
00:25:24,560 --> 00:25:27,840
Speaker 4: the EU, the US, we've integrated into Brazil, Mexico, and

484
00:25:27,920 --> 00:25:30,679
Speaker 4: we've just announced that we're coming online in UAE. So

485
00:25:30,720 --> 00:25:33,800
Speaker 4: we've built out these integration points and we've built out

486
00:25:33,840 --> 00:25:37,240
Speaker 4: primary liquidity in all of these markets, and so USCC

487
00:25:37,520 --> 00:25:41,520
Speaker 4: is available and liquid at scale all around the world.

488
00:25:41,720 --> 00:25:45,040
Speaker 4: That's the primary liquidity side, and so that's crucial if

489
00:25:45,040 --> 00:25:46,520
Speaker 4: you're going to use this. You need to be able

490
00:25:46,520 --> 00:25:47,960
Speaker 4: to know I can get in, I can get out,

491
00:25:48,000 --> 00:25:49,480
Speaker 4: and I can do that all around the world. And

492
00:25:49,480 --> 00:25:53,280
Speaker 4: then we've created very large secondary liquidity, and that's really

493
00:25:53,320 --> 00:25:56,119
Speaker 4: important as well. So when you get down to the

494
00:25:56,760 --> 00:26:00,480
Speaker 4: E money product in Vietnam, can you go from that

495
00:26:00,520 --> 00:26:03,360
Speaker 4: em money product in Vietnam into USDC and back and

496
00:26:03,480 --> 00:26:06,119
Speaker 4: all around the world all these different payment methods and

497
00:26:06,160 --> 00:26:09,159
Speaker 4: payment instruments and the actual secondary liquidity between those and

498
00:26:09,320 --> 00:26:12,600
Speaker 4: USDC is huge, and so the barrier to entry is

499
00:26:12,600 --> 00:26:13,840
Speaker 4: actually fairly high.

500
00:26:13,920 --> 00:26:17,040
Speaker 5: We have these large network modes and right now.

501
00:26:17,000 --> 00:26:19,720
Speaker 2: So it's not just like making a new ERC twenty making.

502
00:26:19,520 --> 00:26:20,080
Speaker 5: A new coin.

503
00:26:20,400 --> 00:26:23,240
Speaker 4: The marginal value of a new stable coin right now

504
00:26:23,280 --> 00:26:27,240
Speaker 4: is effectively zero. You have to have established network utility

505
00:26:27,680 --> 00:26:31,920
Speaker 4: and then liquidity at scale, and essentially liquidity begats liquidity.

506
00:26:32,160 --> 00:26:36,119
Speaker 4: Network velocity extends network velocity, and so you know, we

507
00:26:36,160 --> 00:26:38,520
Speaker 4: feel like that's a very very good position. And I

508
00:26:38,560 --> 00:26:42,000
Speaker 4: think the ability to be federally regulated and to have

509
00:26:42,240 --> 00:26:45,360
Speaker 4: these higher bars on the infrastructure side and what's required

510
00:26:45,359 --> 00:26:48,119
Speaker 4: of view is also really important. That's not something for

511
00:26:48,160 --> 00:26:50,639
Speaker 4: the faint of heart, and doing that all around the world,

512
00:26:50,680 --> 00:26:51,960
Speaker 4: not just in the United States. There's a lot of

513
00:26:52,000 --> 00:26:55,120
Speaker 4: focus on the United States, but we've been under significant

514
00:26:55,160 --> 00:26:58,960
Speaker 4: regulatory regimes and other jurisdictions for quite some time as well.

515
00:26:59,359 --> 00:27:01,480
Speaker 4: Those are you know, meaningful barriers, and I guess the

516
00:27:01,520 --> 00:27:04,880
Speaker 4: bigger picture there is like we're just focused on building

517
00:27:05,520 --> 00:27:08,960
Speaker 4: this infrastructure, making it easy to adopt by whether it's

518
00:27:09,040 --> 00:27:13,600
Speaker 4: a technology company, a fintech company, a bank. We're building

519
00:27:13,680 --> 00:27:16,679
Speaker 4: partnerships with some of the biggest core banking infrastructure companies

520
00:27:16,680 --> 00:27:19,480
Speaker 4: in the world. We announced something recently with fiserv. Just

521
00:27:19,600 --> 00:27:23,560
Speaker 4: yesterday we announced a broad partnership with fis Global. And

522
00:27:23,640 --> 00:27:26,200
Speaker 4: these are companies that service tens of thousands of banks,

523
00:27:26,240 --> 00:27:30,040
Speaker 4: and we're plugging USDC as an innovation into their infrastructure.

524
00:27:30,400 --> 00:27:33,159
Speaker 4: And so we even do it with the card networks

525
00:27:33,240 --> 00:27:36,240
Speaker 4: Visa and MasterCard, where they're using USDC as an internal

526
00:27:36,280 --> 00:27:39,440
Speaker 4: settlement system to move money from issuers back to home

527
00:27:39,480 --> 00:27:42,440
Speaker 4: base faster than the correspondent banking system. There's lots of

528
00:27:42,480 --> 00:27:45,600
Speaker 4: places we're getting integrated. And what I like to say

529
00:27:45,640 --> 00:27:49,800
Speaker 4: is I believe that the stable stablecoin networks are a

530
00:27:49,840 --> 00:27:52,280
Speaker 4: winner take most, not a winner take all.

531
00:27:52,359 --> 00:27:52,560
Speaker 5: Mark.

532
00:27:52,600 --> 00:27:54,560
Speaker 3: This was going to be my next question. Can you

533
00:27:54,800 --> 00:27:56,760
Speaker 3: talk about that a little bit more like ten years

534
00:27:56,800 --> 00:27:59,520
Speaker 3: from now? What does the landscape actually look like and

535
00:27:59,560 --> 00:28:02,760
Speaker 3: what is the interoperability of all these different stable coins

536
00:28:02,800 --> 00:28:03,520
Speaker 3: actually look like.

537
00:28:03,960 --> 00:28:07,240
Speaker 4: Yeah, so I think ten years from now, I don't

538
00:28:07,240 --> 00:28:10,359
Speaker 4: think we have any idea what it's going to look like.

539
00:28:10,640 --> 00:28:13,440
Speaker 5: But I mean there are several different.

540
00:28:13,240 --> 00:28:14,760
Speaker 2: Component ford looking statement.

541
00:28:14,880 --> 00:28:17,800
Speaker 4: Yeah, yeah, several different components of this. So I think

542
00:28:17,920 --> 00:28:21,879
Speaker 4: one is we take as a first principle that stable

543
00:28:21,920 --> 00:28:24,440
Speaker 4: coin money is the highest utility form of money that's

544
00:28:24,480 --> 00:28:27,679
Speaker 4: ever been created. And it's the highest utility not just

545
00:28:27,720 --> 00:28:31,960
Speaker 4: because it has Internet superpowers of speed and it cost efficiency,

546
00:28:32,040 --> 00:28:35,679
Speaker 4: but because it's actually the first truly programmable form of money.

547
00:28:36,160 --> 00:28:37,840
Speaker 4: And if you're going to have a programmable form of

548
00:28:37,880 --> 00:28:42,600
Speaker 4: money where software intermediation and software innovation on top of

549
00:28:42,720 --> 00:28:45,640
Speaker 4: money has not existed, open banking is like poor cousin.

550
00:28:46,120 --> 00:28:50,600
Speaker 4: So you're introducing a new realm of money utility, and

551
00:28:50,640 --> 00:28:52,480
Speaker 4: we're at the very front edges of that, and we

552
00:28:52,520 --> 00:28:55,760
Speaker 4: see that already today. I mean the entire phenomenon of DeFi,

553
00:28:55,840 --> 00:29:01,280
Speaker 4: which is highly sophisticated market structures that are just autonous

554
00:29:01,320 --> 00:29:05,880
Speaker 4: machines effectively running in code on the Internet. That's pretty amazing.

555
00:29:06,120 --> 00:29:09,120
Speaker 5: So when you unleash that, and you unleash that.

556
00:29:09,080 --> 00:29:12,600
Speaker 4: Kind of curve of innovation, like it's sort of like

557
00:29:12,640 --> 00:29:15,360
Speaker 4: when mobile devices were out. People were into mobile for

558
00:29:15,360 --> 00:29:18,280
Speaker 4: a really long time and they were like, hey, Mobile's

559
00:29:18,280 --> 00:29:20,320
Speaker 4: gonna be huge, and Mobile World Congress was like the

560
00:29:20,360 --> 00:29:21,920
Speaker 4: biggest conference in the world, and you'd.

561
00:29:21,720 --> 00:29:24,840
Speaker 5: Go there and there's like there were like one hundred thousand.

562
00:29:24,560 --> 00:29:28,120
Speaker 4: People there and and yet it all sucked like like

563
00:29:28,320 --> 00:29:32,080
Speaker 4: all the mobile phone devices, everything, everything was, everything was terrible,

564
00:29:32,120 --> 00:29:34,520
Speaker 4: but everyone believed in mobile and then obviously the iPhone

565
00:29:34,520 --> 00:29:37,600
Speaker 4: came and it wasn't the end, it was the beginning.

566
00:29:37,720 --> 00:29:41,200
Speaker 4: Is the point is that like actual innovation with programmable

567
00:29:41,400 --> 00:29:46,200
Speaker 4: apps on phones actually started then in a real way.

568
00:30:00,640 --> 00:30:03,280
Speaker 2: I had a use case recently where I wanted there

569
00:30:03,320 --> 00:30:05,360
Speaker 2: to be a stable coin use case and I think

570
00:30:05,360 --> 00:30:07,920
Speaker 2: maybe this will coming. So I've tried to do vibe

571
00:30:07,920 --> 00:30:10,800
Speaker 2: coding where it's like yeah, yeah, cursor and making software yeah,

572
00:30:10,800 --> 00:30:13,120
Speaker 2: And I wanted to link up my software to chat

573
00:30:13,240 --> 00:30:16,000
Speaker 2: gubt so that it could query the AI yes, and

574
00:30:16,080 --> 00:30:18,840
Speaker 2: to access the API, I had to like entering a

575
00:30:18,880 --> 00:30:21,760
Speaker 2: credit card with LGPT and then I had to like

576
00:30:21,920 --> 00:30:24,680
Speaker 2: copy your auless code. It was really annoying, and I

577
00:30:24,720 --> 00:30:27,240
Speaker 2: was like, why can't I just have my cursor be

578
00:30:27,320 --> 00:30:30,040
Speaker 2: linked to a stable coin wallet it make the connection

579
00:30:30,400 --> 00:30:32,720
Speaker 2: with Chad gbt's AI so that I don't have to

580
00:30:32,720 --> 00:30:35,160
Speaker 2: make an account and it just pays per usage. So

581
00:30:35,200 --> 00:30:36,920
Speaker 2: that is for intelligence that is coming.

582
00:30:37,000 --> 00:30:39,320
Speaker 4: Definitely what's going to happen, okay, And in fact, this

583
00:30:39,360 --> 00:30:40,760
Speaker 4: is where I was getting with my point actually in

584
00:30:40,840 --> 00:30:43,240
Speaker 4: response to you tracy, which is, like, we think about

585
00:30:43,240 --> 00:30:46,680
Speaker 4: the Internet and like when the marginal cost of storing

586
00:30:46,680 --> 00:30:49,440
Speaker 4: and moving information went to zero, the NetWorld output of

587
00:30:49,480 --> 00:30:52,800
Speaker 4: information like million xt or when software could be distributed

588
00:30:52,840 --> 00:30:55,160
Speaker 4: to a browser, the NetWorld output of software was like.

589
00:30:55,160 --> 00:30:57,800
Speaker 5: Up a million x. So it created these huge growth.

590
00:30:57,840 --> 00:31:00,280
Speaker 4: So my view is that over ten years and use

591
00:31:00,280 --> 00:31:03,080
Speaker 4: your tenure, is that the total payment volume, which is

592
00:31:03,080 --> 00:31:05,280
Speaker 4: a measure that people like to use, is likely going

593
00:31:05,320 --> 00:31:08,800
Speaker 4: to go up by many, many, many orders of magnitude

594
00:31:08,840 --> 00:31:12,000
Speaker 4: because you've taken that cost and friction out and because

595
00:31:12,040 --> 00:31:15,200
Speaker 4: of the new utility that comes from programmability. And so

596
00:31:15,320 --> 00:31:18,600
Speaker 4: my own belief is that the scale of money that

597
00:31:18,680 --> 00:31:21,880
Speaker 4: moves in the world will be so much larger than

598
00:31:22,040 --> 00:31:24,840
Speaker 4: where we are today. It's sort of the Internet infrastructure

599
00:31:24,920 --> 00:31:27,680
Speaker 4: actually hitting the financial system, which is a scary thing

600
00:31:28,160 --> 00:31:30,560
Speaker 4: because like, wow, you've got all this money velocity, and

601
00:31:30,600 --> 00:31:33,640
Speaker 4: you've got machines that are intermediating this through ais Like,

602
00:31:33,720 --> 00:31:35,720
Speaker 4: oh my god. That's one of the reasons why it

603
00:31:35,760 --> 00:31:39,680
Speaker 4: needs to be very safe full reserve instruments. But it

604
00:31:39,720 --> 00:31:42,200
Speaker 4: also i think gets to the heart of your question,

605
00:31:42,240 --> 00:31:45,120
Speaker 4: which is are we going after all the deposits of

606
00:31:45,160 --> 00:31:47,479
Speaker 4: the banks or all this is the answer is no.

607
00:31:47,800 --> 00:31:52,760
Speaker 4: But my belief is that financial institutions who create either

608
00:31:53,040 --> 00:31:55,720
Speaker 4: places where people can lend their money and then that

609
00:31:55,840 --> 00:31:59,720
Speaker 4: money can be used for other investing purposes or where

610
00:31:59,720 --> 00:32:03,680
Speaker 4: people actually make specific investments with their money, like those

611
00:32:03,760 --> 00:32:06,480
Speaker 4: will proliferate. And in fact, I think innovation in both

612
00:32:06,520 --> 00:32:10,600
Speaker 4: credit intermediation and in investable assets is about to go

613
00:32:10,640 --> 00:32:15,360
Speaker 4: through a new renaissance because of blockchains, tokenization and stable coins.

614
00:32:15,880 --> 00:32:18,440
Speaker 4: And so my own view is in a system of

615
00:32:18,440 --> 00:32:20,719
Speaker 4: full reserve money, you need to be able to do

616
00:32:20,800 --> 00:32:23,840
Speaker 4: credit intermediation with that full reserve money, and you need

617
00:32:23,880 --> 00:32:27,200
Speaker 4: to make that credit intermediation be as efficient as possible.

618
00:32:27,720 --> 00:32:31,080
Speaker 4: And I think you can build on chain credit intermediation

619
00:32:31,720 --> 00:32:36,160
Speaker 4: in a way where you have greater safety, more transparency,

620
00:32:36,440 --> 00:32:40,680
Speaker 4: more audible risk management, and you can build market structures

621
00:32:41,080 --> 00:32:43,960
Speaker 4: that are far more accessible to more people and institutions

622
00:32:43,960 --> 00:32:46,000
Speaker 4: in the world. I think of it as like AdWords

623
00:32:46,000 --> 00:32:48,320
Speaker 4: for credit, like you know this sort of these super

624
00:32:48,320 --> 00:32:52,240
Speaker 4: scaled or Amazon marketplace for product creators. We haven't entered

625
00:32:52,240 --> 00:32:54,880
Speaker 4: that world yet, but I think there will be firms

626
00:32:55,040 --> 00:32:57,520
Speaker 4: and that many of them will likely be regulated by

627
00:32:57,760 --> 00:33:00,600
Speaker 4: central banks who are standing in that in the structure,

628
00:33:00,640 --> 00:33:05,360
Speaker 4: and so it's an opportunity to reinvent what payments, credit investing,

629
00:33:05,880 --> 00:33:06,840
Speaker 4: all these things look.

630
00:33:06,800 --> 00:33:08,840
Speaker 2: Like Tracy, I kind of think, by the way, and

631
00:33:08,880 --> 00:33:11,160
Speaker 2: we should maybe do. I think the Internet as we

632
00:33:11,240 --> 00:33:13,520
Speaker 2: know it in terms of like Internet that's free to

633
00:33:13,600 --> 00:33:16,520
Speaker 2: browse is probably going to die because on a matter

634
00:33:16,560 --> 00:33:19,800
Speaker 2: of time, you know, if you're like AI bot can

635
00:33:19,840 --> 00:33:22,080
Speaker 2: like go search the web, those sites are going to

636
00:33:22,120 --> 00:33:24,840
Speaker 2: want payment for having all the scape, and you know,

637
00:33:24,920 --> 00:33:27,480
Speaker 2: stable coins can solve that. But it does feel like

638
00:33:27,520 --> 00:33:28,960
Speaker 2: we're going to have a totally thing where like you

639
00:33:29,040 --> 00:33:31,200
Speaker 2: don't just get to use the web for free. Everything

640
00:33:31,360 --> 00:33:34,120
Speaker 2: is like meter based on the data that you're pulling in.

641
00:33:34,280 --> 00:33:37,000
Speaker 3: Yeah, well we were talking about that earlier, right, this

642
00:33:37,120 --> 00:33:40,120
Speaker 3: idea that we've already seen traffic start to collapse because

643
00:33:40,360 --> 00:33:45,080
Speaker 3: the search engines are just providing AI summaries of individual pages. Yeah,

644
00:33:45,200 --> 00:33:49,200
Speaker 3: how long are content providers like us? How long are

645
00:33:49,200 --> 00:33:50,719
Speaker 3: they going to stand for that? I don't know.

646
00:33:51,000 --> 00:33:53,120
Speaker 4: Well, can I say something on that, which is we

647
00:33:53,240 --> 00:33:56,080
Speaker 4: actually work together with coinbase and a couple of others

648
00:33:56,160 --> 00:33:58,800
Speaker 4: on implementing something called X four h two.

649
00:33:59,000 --> 00:33:59,960
Speaker 5: Now you're like, what is that?

650
00:34:00,280 --> 00:34:02,760
Speaker 4: And Mark and JSON talks about this he has over

651
00:34:02,800 --> 00:34:05,440
Speaker 4: the years, back in the early days of the web.

652
00:34:05,640 --> 00:34:08,000
Speaker 2: You know, yeah, there you go, ex pay via API

653
00:34:08,080 --> 00:34:09,920
Speaker 2: without registration. That's what I want. That's what I want

654
00:34:09,960 --> 00:34:12,400
Speaker 2: for my vibor. So there exactly what I'm looking.

655
00:34:12,200 --> 00:34:14,680
Speaker 4: So it's actually a It already exists as a protocol

656
00:34:14,960 --> 00:34:17,959
Speaker 4: that is built into the way that every web server,

657
00:34:18,080 --> 00:34:21,760
Speaker 4: every web browser, every client that interacts with the Internet works.

658
00:34:21,760 --> 00:34:23,000
Speaker 5: It's a protocol that's there.

659
00:34:23,080 --> 00:34:26,879
Speaker 4: It uses the existing HTTP transport and now you can

660
00:34:26,920 --> 00:34:30,319
Speaker 4: actually say, hey, I'm hitting my piece of content or

661
00:34:30,400 --> 00:34:33,279
Speaker 4: data and I can challenge whoever's accessing it and say,

662
00:34:33,360 --> 00:34:35,160
Speaker 4: you know, to get to this, you need to pay me.

663
00:34:35,280 --> 00:34:37,239
Speaker 4: And it can basically come back and say you can

664
00:34:37,280 --> 00:34:39,600
Speaker 4: pay me on a blockchain with a stable coin. And

665
00:34:39,640 --> 00:34:42,799
Speaker 4: so we're doing that with USDC. We're encouraging developers to

666
00:34:42,840 --> 00:34:45,040
Speaker 4: do that. There's lots of third parties that are building

667
00:34:45,280 --> 00:34:47,960
Speaker 4: layers for AI agents to use this, and so I

668
00:34:48,000 --> 00:34:50,560
Speaker 4: think that's one example, but I think it gets to

669
00:34:50,600 --> 00:34:53,000
Speaker 4: the heart of what you're saying, which is there may

670
00:34:53,080 --> 00:34:54,440
Speaker 4: be more of a subscription model.

671
00:34:54,520 --> 00:34:55,719
Speaker 5: Spotify is probably.

672
00:34:55,480 --> 00:34:57,840
Speaker 4: The best example where you have the celestial jukebox and

673
00:34:57,840 --> 00:35:00,560
Speaker 4: you pay your fifteen bucks and you get access everything.

674
00:35:01,040 --> 00:35:03,400
Speaker 4: You know, there's a kind of question about could there

675
00:35:03,440 --> 00:35:06,640
Speaker 4: be a celestial data box which is more broad and

676
00:35:06,680 --> 00:35:09,239
Speaker 4: where the actual consumer front ends are companies like open

677
00:35:09,280 --> 00:35:12,520
Speaker 4: Ai or Google, and you're paying a subscription and then

678
00:35:12,560 --> 00:35:16,320
Speaker 4: there's like behind the scenes either pro rata or usage

679
00:35:16,320 --> 00:35:20,480
Speaker 4: based model that is actually compensating the actual data providers

680
00:35:20,520 --> 00:35:23,960
Speaker 4: and creators, and so lots to be unfold here.

681
00:35:24,040 --> 00:35:28,120
Speaker 3: Yeah, can I ask a slightly awkward question, it's a

682
00:35:28,200 --> 00:35:32,279
Speaker 3: leading question, how much do you hate Tether given that

683
00:35:32,400 --> 00:35:34,680
Speaker 3: not only are they number one, but you know, there's

684
00:35:34,719 --> 00:35:38,080
Speaker 3: been questions over their reserve quality for many years, although

685
00:35:38,160 --> 00:35:42,160
Speaker 3: I think some of their transparency has improved. But thirdly,

686
00:35:42,360 --> 00:35:44,640
Speaker 3: you know, we had the Tether CEO on a few

687
00:35:44,680 --> 00:35:49,319
Speaker 3: months ago, and they're expanding into the US, so that

688
00:35:49,360 --> 00:35:52,319
Speaker 3: would seem to you know, directly be competing with you

689
00:35:52,400 --> 00:35:55,040
Speaker 3: on your sort of home turf, although I understand you're

690
00:35:55,200 --> 00:35:57,680
Speaker 3: also expanding elsewhere in the world. How do you feel

691
00:35:57,719 --> 00:35:58,200
Speaker 3: about Tether?

692
00:35:58,680 --> 00:36:01,640
Speaker 4: Yeah, I mean, look, I think our view has always

693
00:36:01,640 --> 00:36:05,919
Speaker 4: been that we're building for the long run, and we've

694
00:36:05,960 --> 00:36:09,880
Speaker 4: taken a different approach really since inception we've taken a

695
00:36:10,400 --> 00:36:14,080
Speaker 4: sort of regulatory first approach, a compliance first approach, becoming

696
00:36:14,160 --> 00:36:19,279
Speaker 4: widely licensed, widely regulated, always advocating to improve that, and

697
00:36:19,480 --> 00:36:22,719
Speaker 4: that's allowed us to build, obviously, what we think is

698
00:36:22,760 --> 00:36:25,360
Speaker 4: a great business. It's allowed us to have deep integration

699
00:36:25,719 --> 00:36:29,680
Speaker 4: into the financial sector with banks. If you're a major

700
00:36:29,840 --> 00:36:34,080
Speaker 4: institution partnering in this space, the probability of you doing

701
00:36:34,120 --> 00:36:37,160
Speaker 4: that with circles reasonably high. And so we built a

702
00:36:37,200 --> 00:36:41,799
Speaker 4: really great franchise and we are really well known for integrity,

703
00:36:42,080 --> 00:36:45,240
Speaker 4: for trustworthiness. We're a publicly traded company with the highest

704
00:36:45,239 --> 00:36:49,239
Speaker 4: standards of governance and accountability that are out there, and

705
00:36:49,600 --> 00:36:52,040
Speaker 4: we've always sought to up level that. And so my

706
00:36:52,200 --> 00:36:55,000
Speaker 4: view is that if we're building a new Internet financial system,

707
00:36:55,160 --> 00:36:57,400
Speaker 4: and that new Internet financial system is going to be

708
00:36:57,440 --> 00:37:00,560
Speaker 4: this incredibly broadly used infrastructure and it's going to be

709
00:37:00,680 --> 00:37:05,400
Speaker 4: used by mainstream companies and public companies and financial institutions

710
00:37:05,400 --> 00:37:07,520
Speaker 4: and financial intermediaries.

711
00:37:06,840 --> 00:37:07,760
Speaker 5: All around the world.

712
00:37:07,760 --> 00:37:09,520
Speaker 4: We're going to integrate with that and build on that.

713
00:37:09,880 --> 00:37:13,200
Speaker 4: They're going to want to do that with trusted, well

714
00:37:13,280 --> 00:37:16,640
Speaker 4: regulated companies. And so our view is that the early

715
00:37:16,680 --> 00:37:19,400
Speaker 4: adopter segment of the market, which has really been dominated

716
00:37:19,440 --> 00:37:22,640
Speaker 4: by sort of the crypto trading side of things, is

717
00:37:22,680 --> 00:37:23,840
Speaker 4: that early adopter segment.

718
00:37:23,880 --> 00:37:25,480
Speaker 5: We're now going into a different chapter.

719
00:37:25,960 --> 00:37:28,920
Speaker 4: And if you actually look at over the last you know,

720
00:37:28,960 --> 00:37:32,400
Speaker 4: eighteen months, we've taken market share. We've taken you know,

721
00:37:32,600 --> 00:37:36,520
Speaker 4: material market share, and we're growing in many, many areas.

722
00:37:36,640 --> 00:37:39,560
Speaker 4: And I would say also internationally, I would say the

723
00:37:39,560 --> 00:37:42,239
Speaker 4: majority of our business now is international. So we're in

724
00:37:42,320 --> 00:37:45,200
Speaker 4: many many markets and in many other markets as well.

725
00:37:45,719 --> 00:37:49,680
Speaker 4: The regulators are putting in place very clear regulations around

726
00:37:50,120 --> 00:37:52,960
Speaker 4: what stable coin issuers need to be and so we

727
00:37:53,080 --> 00:37:56,200
Speaker 4: are the only large global dollar stable coin that's legally

728
00:37:56,239 --> 00:37:58,880
Speaker 4: available in Europe as an example. And so I think

729
00:37:59,239 --> 00:38:01,399
Speaker 4: we just keep doing what we're doing. I think we're

730
00:38:01,400 --> 00:38:06,480
Speaker 4: building great infrastructure for companies, for enterprises, for developers, and

731
00:38:06,600 --> 00:38:09,000
Speaker 4: we just got to keep doing that and will grow.

732
00:38:09,160 --> 00:38:11,840
Speaker 4: And this is a really significant size market. And so

733
00:38:12,320 --> 00:38:13,800
Speaker 4: I actually, you know, I have a lot of respect

734
00:38:13,880 --> 00:38:15,800
Speaker 4: for what they've been able to build. We took a

735
00:38:15,840 --> 00:38:18,760
Speaker 4: different path. We built something also I think really special

736
00:38:19,200 --> 00:38:21,960
Speaker 4: and over five years, ten years, as we said earlier, right,

737
00:38:22,040 --> 00:38:24,560
Speaker 4: this is very likely a winner take most, not a

738
00:38:24,560 --> 00:38:27,040
Speaker 4: winner take all market. And I actually don't think we know,

739
00:38:27,640 --> 00:38:29,799
Speaker 4: you know, if they're you know, maybe three or five

740
00:38:29,840 --> 00:38:31,799
Speaker 4: big players. I don't know what that'll be in five

741
00:38:31,880 --> 00:38:34,439
Speaker 4: years or ten years, but there's probably some that don't

742
00:38:34,480 --> 00:38:36,359
Speaker 4: exist yet that will show up too.

743
00:38:37,000 --> 00:38:40,000
Speaker 2: I take it as a sign of maturity. Like years

744
00:38:40,000 --> 00:38:42,680
Speaker 2: ago when it came to crypto, people were just excited

745
00:38:42,680 --> 00:38:45,560
Speaker 2: about number go up right, and then now it's like

746
00:38:45,560 --> 00:38:47,920
Speaker 2: people are really excited about number go sideways. So if

747
00:38:47,920 --> 00:38:49,759
Speaker 2: it just stays at one forever, there's like a really

748
00:38:49,760 --> 00:38:52,239
Speaker 2: good sign. And so I take it as a sign

749
00:38:52,320 --> 00:38:54,239
Speaker 2: of maturity for the industry that there is all this

750
00:38:54,400 --> 00:38:59,160
Speaker 2: interest in stable colins. Nonetheless, no pun intended, Nonetheless, you know,

751
00:38:59,239 --> 00:39:03,040
Speaker 2: all those public chains are still out there, and USDC

752
00:39:03,200 --> 00:39:05,879
Speaker 2: is on a number of chains twenty four. When we

753
00:39:05,960 --> 00:39:08,759
Speaker 2: talk about like who collects the profits from this, and

754
00:39:08,800 --> 00:39:12,239
Speaker 2: we've talked specifically about say your distribution with coinbase and

755
00:39:12,280 --> 00:39:16,760
Speaker 2: whether that do you see value accruing to token holders

756
00:39:16,760 --> 00:39:19,560
Speaker 2: of different chains in the future, because it seems to

757
00:39:19,560 --> 00:39:22,040
Speaker 2: me like for the most part, as long as it's

758
00:39:22,040 --> 00:39:24,759
Speaker 2: like really fast and cheap, it really doesn't matter if

759
00:39:24,800 --> 00:39:27,719
Speaker 2: I'm sending something to Tracy, I care about your reputation

760
00:39:27,760 --> 00:39:29,279
Speaker 2: and your money in the bank. I don't really care

761
00:39:29,280 --> 00:39:32,640
Speaker 2: about what chain that you actually transact over at the end.

762
00:39:32,719 --> 00:39:34,520
Speaker 2: So if you want to do it under you Solona

763
00:39:34,640 --> 00:39:37,440
Speaker 2: or some layer three that gives almost no value back

764
00:39:37,480 --> 00:39:39,799
Speaker 2: to the ether chain or something like that, I don't

765
00:39:39,840 --> 00:39:44,440
Speaker 2: really care. Do you see like token holders of the

766
00:39:44,480 --> 00:39:49,720
Speaker 2: public chains collecting rents in your future, collecting a meaningful

767
00:39:49,760 --> 00:39:51,800
Speaker 2: amount of rents from this on chain commerce?

768
00:39:52,160 --> 00:39:53,040
Speaker 5: It's a great question.

769
00:39:53,480 --> 00:39:55,480
Speaker 4: I'd say a couple of things, And I'm actually going

770
00:39:55,520 --> 00:39:58,560
Speaker 4: to relate back to my mobile commentary from earlier, which

771
00:39:58,600 --> 00:40:02,760
Speaker 4: is our mental model is that blockchain networks are Internet

772
00:40:02,800 --> 00:40:05,680
Speaker 4: operating systems, and they provide a way to store data,

773
00:40:06,080 --> 00:40:09,359
Speaker 4: conduct transactions on that data, and provide compute around those

774
00:40:09,440 --> 00:40:13,040
Speaker 4: transactions and data. That's what they do their public computing machines.

775
00:40:13,200 --> 00:40:16,520
Speaker 5: And there are a lot of them. There's actually thousands

776
00:40:16,640 --> 00:40:18,040
Speaker 5: that have been launched.

777
00:40:18,120 --> 00:40:21,600
Speaker 4: We're on twenty three or twenty four today, and we

778
00:40:21,640 --> 00:40:24,759
Speaker 4: see this as a space that is constantly evolving, and

779
00:40:24,800 --> 00:40:29,120
Speaker 4: so there's constantly innovation on the layer ones. There's these

780
00:40:29,200 --> 00:40:32,760
Speaker 4: layer twos. When I think about where we are relative

781
00:40:32,800 --> 00:40:34,560
Speaker 4: to where we were with say iPhone, we're in the

782
00:40:34,600 --> 00:40:37,960
Speaker 4: pre iPhone era, of blockchain networks. In my view, I

783
00:40:38,040 --> 00:40:40,960
Speaker 4: think there's lots of operating systems out there, just like

784
00:40:41,000 --> 00:40:43,920
Speaker 4: there were lots of mobile operating systems, and some of

785
00:40:43,920 --> 00:40:46,680
Speaker 4: them got better than others and improve the user experience.

786
00:40:46,760 --> 00:40:49,840
Speaker 4: Some of them started enabling consumer things, remember NTT DoCoMo

787
00:40:49,960 --> 00:40:53,040
Speaker 4: in Japan or things like that, And so I think

788
00:40:53,080 --> 00:40:56,080
Speaker 4: that we're still really early, and so that's one of

789
00:40:56,080 --> 00:40:59,000
Speaker 4: the reasons why we've really tried to make sure we're

790
00:40:59,080 --> 00:41:02,440
Speaker 4: trying to operate our own stable cooin network on the

791
00:41:02,440 --> 00:41:03,239
Speaker 4: best ones that are.

792
00:41:03,239 --> 00:41:06,480
Speaker 2: It just seems to me the decentralized change. You pay

793
00:41:06,520 --> 00:41:09,880
Speaker 2: them a rent because you want some advantage of decentralization.

794
00:41:10,200 --> 00:41:13,680
Speaker 2: If I'm using USDC, I've already accepted the premise of centralization.

795
00:41:13,760 --> 00:41:15,719
Speaker 2: You have money in the Black block Fund. It's about

796
00:41:15,840 --> 00:41:19,040
Speaker 2: it's about as centralized and legacy fly as you could

797
00:41:19,080 --> 00:41:22,600
Speaker 2: probably get once I've already accepted this premise of centralization,

798
00:41:22,680 --> 00:41:24,520
Speaker 2: that my money is just backed by a bank. Well

799
00:41:24,520 --> 00:41:27,520
Speaker 2: you do that, Why do I even care? Why pay

800
00:41:27,560 --> 00:41:29,200
Speaker 2: these rent to some network of computers?

801
00:41:29,160 --> 00:41:32,160
Speaker 4: So this is this is this is it's a different

802
00:41:32,239 --> 00:41:36,080
Speaker 4: layer is Essentially my thinking is that public blockchains are

803
00:41:36,239 --> 00:41:39,360
Speaker 4: a general purpose layer that many many applications can be

804
00:41:39,360 --> 00:41:41,200
Speaker 4: built on top of. Stable Coins are the killer app

805
00:41:41,239 --> 00:41:43,840
Speaker 4: for sure, I will say in my own opinion, but

806
00:41:43,920 --> 00:41:46,080
Speaker 4: there are many, many different kinds of applications that can

807
00:41:46,120 --> 00:41:48,359
Speaker 4: be built on that, and we need innovation in those

808
00:41:48,440 --> 00:41:52,040
Speaker 4: computing platforms. We need higher speed, we need greater privacy,

809
00:41:52,120 --> 00:41:55,279
Speaker 4: we need better forms of compute, we need new and

810
00:41:55,680 --> 00:41:58,760
Speaker 4: more primitives in that infrastructure, and that needs to expand

811
00:41:58,760 --> 00:42:01,000
Speaker 4: we need to get to a point where these public

812
00:42:01,040 --> 00:42:06,160
Speaker 4: networks are supporting huge scales of consumer applications and enterprise applications,

813
00:42:06,160 --> 00:42:08,600
Speaker 4: and so there's like a growth in that kind of

814
00:42:08,640 --> 00:42:12,759
Speaker 4: infrastructure side of it. And those are shared infrastructures that

815
00:42:12,840 --> 00:42:14,960
Speaker 4: many people can can take advantage of, and so there

816
00:42:15,000 --> 00:42:17,960
Speaker 4: needs to be a kind of fee model on those networks.

817
00:42:18,400 --> 00:42:21,640
Speaker 4: We've actually created a way for the fees on many

818
00:42:21,640 --> 00:42:23,960
Speaker 4: of these blockchain networks to actually just be paid in USDC,

819
00:42:24,560 --> 00:42:27,319
Speaker 4: and so that's something that we see more of happening. That,

820
00:42:27,440 --> 00:42:29,640
Speaker 4: like the notion of gas fees or the notion of

821
00:42:29,640 --> 00:42:32,880
Speaker 4: gas fees in some other cryptocommodity, will become less and

822
00:42:32,960 --> 00:42:35,320
Speaker 4: less common and like fees will just be paid in

823
00:42:36,160 --> 00:42:39,600
Speaker 4: stable coin. But I think there is value in these networks,

824
00:42:39,719 --> 00:42:42,920
Speaker 4: and I think that there's very likely value for token

825
00:42:42,960 --> 00:42:47,160
Speaker 4: holders on these networks if these networks provide scalable infrastructure

826
00:42:47,200 --> 00:42:49,960
Speaker 4: that people can take advantage of. Again, stable coin is

827
00:42:50,080 --> 00:42:53,399
Speaker 4: one application layer there, and there'll be many many other

828
00:42:53,440 --> 00:42:56,799
Speaker 4: application layers on those and so you kind of pay

829
00:42:56,840 --> 00:42:59,279
Speaker 4: for the shared the shared state of the machine, the

830
00:42:59,320 --> 00:43:02,160
Speaker 4: shared data state, the shared transaction state, the shared compute state.

831
00:43:02,440 --> 00:43:04,840
Speaker 4: There's value in paying for that shared state.

832
00:43:06,080 --> 00:43:08,080
Speaker 3: Just on this note, can you tell us when you're

833
00:43:08,080 --> 00:43:11,640
Speaker 3: talking to clients or potential partners, like, what is it

834
00:43:11,680 --> 00:43:14,879
Speaker 3: that they are most interested in getting from you? Can

835
00:43:14,920 --> 00:43:17,719
Speaker 3: you provide us with a sort of hierarchy of needs

836
00:43:17,800 --> 00:43:21,439
Speaker 3: for you know, USDC customers in the sense of are

837
00:43:21,480 --> 00:43:25,160
Speaker 3: they worried about the speed of the technology? Are they

838
00:43:25,239 --> 00:43:28,680
Speaker 3: worried about the reserve assets? And I guess corporate governance

839
00:43:28,760 --> 00:43:31,239
Speaker 3: and things like that. How would you prioritize what people

840
00:43:31,280 --> 00:43:32,800
Speaker 3: are actually thinking about.

841
00:43:33,000 --> 00:43:35,800
Speaker 4: Well, we have a huge range of types of people

842
00:43:35,920 --> 00:43:39,160
Speaker 4: that we work with, from like individual developers that are

843
00:43:39,200 --> 00:43:43,279
Speaker 4: creating a new product in some emerging market, to you know,

844
00:43:43,280 --> 00:43:47,040
Speaker 4: people building on chain protocols to very large you know,

845
00:43:47,160 --> 00:43:50,440
Speaker 4: financial institutions that are looking at using this or integrating

846
00:43:50,440 --> 00:43:53,040
Speaker 4: this in different ways, and so the things that they

847
00:43:53,920 --> 00:44:01,200
Speaker 4: care about do vary across those, But I would say trust, transparency, liquidity.

848
00:44:01,280 --> 00:44:03,759
Speaker 5: Are really really important to everyone. Right.

849
00:44:03,840 --> 00:44:06,360
Speaker 4: If I'm a developer and I'm building a product, I

850
00:44:06,400 --> 00:44:10,160
Speaker 4: need to know that this is a legitimate digital dollar,

851
00:44:10,360 --> 00:44:13,720
Speaker 4: that it's accessible in the markets that I'm intending to serve,

852
00:44:13,760 --> 00:44:17,240
Speaker 4: that people can easily access it and use it, and

853
00:44:17,320 --> 00:44:21,080
Speaker 4: that the infrastructure is good. I can build good product experiences,

854
00:44:21,160 --> 00:44:24,279
Speaker 4: I can build good user experiences and build an application

855
00:44:25,040 --> 00:44:26,840
Speaker 4: or something from my own customers.

856
00:44:26,440 --> 00:44:27,280
Speaker 5: That works well.

857
00:44:27,680 --> 00:44:30,120
Speaker 4: And so they care about the developer tooling, the on

858
00:44:30,280 --> 00:44:32,280
Speaker 4: chain infra, the liquidity, the trust.

859
00:44:32,280 --> 00:44:34,120
Speaker 5: They care about all those things as a startup.

860
00:44:34,320 --> 00:44:37,480
Speaker 4: But even a large company, say you're a big fintech

861
00:44:37,760 --> 00:44:39,879
Speaker 4: and you're like, hey, I want to start leaning into this.

862
00:44:39,960 --> 00:44:42,040
Speaker 4: I want to add stable coins for payments, or I

863
00:44:42,080 --> 00:44:45,000
Speaker 4: want to enable my customers to access DeFi or other

864
00:44:45,040 --> 00:44:48,200
Speaker 4: things like that. They're going to care more about the

865
00:44:48,360 --> 00:44:51,520
Speaker 4: kind of legal and compliance status of Circle. They're going

866
00:44:51,600 --> 00:44:54,960
Speaker 4: to care about the governance of the company itself, but

867
00:44:55,080 --> 00:45:00,120
Speaker 4: also of the underlying regulation that affects us, because they

868
00:45:00,000 --> 00:45:02,200
Speaker 4: I have to face those same issues whether they're in

869
00:45:02,239 --> 00:45:04,600
Speaker 4: the Philippines or in Brazil or in the United States.

870
00:45:04,680 --> 00:45:07,759
Speaker 4: So they care a lot about those things. And then

871
00:45:07,760 --> 00:45:12,160
Speaker 4: they also care about infrastructure clearly, like infrastructure readiness. Is

872
00:45:12,200 --> 00:45:14,680
Speaker 4: this something like I could bring a large number of

873
00:45:14,800 --> 00:45:17,920
Speaker 4: users to and then everyone cares about user experience?

874
00:45:18,040 --> 00:45:20,840
Speaker 5: Right? Can I craft an experience.

875
00:45:20,440 --> 00:45:23,160
Speaker 4: Where the crypto disappears, where I don't need to know

876
00:45:23,200 --> 00:45:25,520
Speaker 4: what blockchain I'm on, and I don't need to know

877
00:45:25,560 --> 00:45:27,880
Speaker 4: about gas pees, and I just want to create a

878
00:45:27,920 --> 00:45:30,520
Speaker 4: way for I have stored value. I want to enable

879
00:45:30,560 --> 00:45:33,080
Speaker 4: people to move it around really easily. They care a

880
00:45:33,120 --> 00:45:34,920
Speaker 4: lot about that, whether you're the biggest company in the

881
00:45:34,960 --> 00:45:36,600
Speaker 4: world or a small startup.

882
00:45:36,840 --> 00:45:39,600
Speaker 2: Jeremy Alert, thank you so much for coming on the odlock.

883
00:45:39,840 --> 00:45:41,080
Speaker 5: Thank you, my pleasure.

884
00:45:41,120 --> 00:45:43,200
Speaker 2: Probably the first crypto company I can think of that

885
00:45:43,320 --> 00:45:45,879
Speaker 2: actually tried to grow through the regulatory approach and didn't

886
00:45:45,920 --> 00:45:49,120
Speaker 2: get destroyed and blocked down. Very impressive and I'm yeah

887
00:45:49,200 --> 00:45:49,920
Speaker 2: great chatting with you.

888
00:45:50,120 --> 00:45:58,200
Speaker 5: Thank you.

889
00:46:03,000 --> 00:46:05,680
Speaker 2: Tracy. You know one question I didn't get to ask,

890
00:46:05,800 --> 00:46:08,360
Speaker 2: or I forgot to ask, is like the perennial, like

891
00:46:08,600 --> 00:46:11,320
Speaker 2: live or buy coffee with a stable coin. At some

892
00:46:11,360 --> 00:46:13,680
Speaker 2: point maybe I will maybe I won't. But in the

893
00:46:13,880 --> 00:46:16,880
Speaker 2: conversation I started thinking, that's probably the wrong way to

894
00:46:16,920 --> 00:46:19,120
Speaker 2: think about it. It's gonna be those machine to machine

895
00:46:19,400 --> 00:46:23,080
Speaker 2: payments that if stable coins become a real important payments thing,

896
00:46:23,719 --> 00:46:26,360
Speaker 2: it's going to be like those like computer to computer

897
00:46:26,440 --> 00:46:27,440
Speaker 2: payments that have to be.

898
00:46:27,360 --> 00:46:29,759
Speaker 3: Seen, right, and they're sort of plugged in the inner

899
00:46:29,800 --> 00:46:30,800
Speaker 3: workings of the Internet.

900
00:46:30,960 --> 00:46:34,040
Speaker 2: Yeah, it makes sense. Maybe the coffee thing will happen,

901
00:46:34,080 --> 00:46:35,959
Speaker 2: who knows, But like, I don't know.

902
00:46:36,560 --> 00:46:38,600
Speaker 3: I don't find it that hard to buy a coffee

903
00:46:38,680 --> 00:46:41,160
Speaker 3: right now, right exactly.

904
00:46:41,800 --> 00:46:44,520
Speaker 2: Buying coffee's is a solved problem as far as I'm concerned.

905
00:46:44,680 --> 00:46:46,279
Speaker 3: Yes, but this is a new problem, You're right, that

906
00:46:46,320 --> 00:46:49,080
Speaker 3: could be solved. That's interesting. The other thing I thought

907
00:46:49,120 --> 00:46:51,440
Speaker 3: was really interesting was you hit upon the sort of

908
00:46:51,520 --> 00:46:55,640
Speaker 3: tension in the decentralization versus like traditional finance, and this

909
00:46:55,760 --> 00:46:59,760
Speaker 3: idea that like, okay, it's all about DeFi and blockchain

910
00:46:59,800 --> 00:47:03,440
Speaker 3: and all that stuff, but ultimately like black Rock is

911
00:47:03,520 --> 00:47:04,200
Speaker 3: holding the money.

912
00:47:04,280 --> 00:47:06,600
Speaker 2: Yeah, no, totally. And this is like, you know, it

913
00:47:06,880 --> 00:47:10,440
Speaker 2: goes back to those formative episodes we did with Austin Campbell,

914
00:47:10,480 --> 00:47:12,640
Speaker 2: which is a big part of the story to the

915
00:47:12,680 --> 00:47:15,239
Speaker 2: extent that this will be a thing, is like just

916
00:47:15,320 --> 00:47:19,120
Speaker 2: solving the sort of software payments, because we could do

917
00:47:19,120 --> 00:47:22,360
Speaker 2: a million episodes on legacy text acts and why JP

918
00:47:22,480 --> 00:47:26,839
Speaker 2: Morgan's or whatever companies internal software will always be They'll

919
00:47:26,840 --> 00:47:29,640
Speaker 2: be spending billions of dollars upgrading it whatever it is,

920
00:47:30,080 --> 00:47:32,799
Speaker 2: and the difficulty of integrations. But if you just have

921
00:47:32,920 --> 00:47:35,799
Speaker 2: like a one off, like so like global platform that

922
00:47:35,840 --> 00:47:38,360
Speaker 2: anyone can plug into and program where money can easily

923
00:47:38,400 --> 00:47:40,160
Speaker 2: be trend there, that's very powerful.

924
00:47:40,280 --> 00:47:44,160
Speaker 3: Yeah, this is why I say user interface, user experience

925
00:47:44,320 --> 00:47:45,000
Speaker 3: is underrated.

926
00:47:45,080 --> 00:47:45,319
Speaker 5: Right.

927
00:47:45,440 --> 00:47:48,480
Speaker 3: That's like me saying Michael Jordan is underrated. But like

928
00:47:48,640 --> 00:47:52,160
Speaker 3: that really that really is it? Right? Like that's where

929
00:47:52,200 --> 00:47:55,360
Speaker 3: the battleground kind of is the ability to like plug

930
00:47:55,400 --> 00:47:57,600
Speaker 3: in and interoperate with all these different systems.

931
00:47:57,880 --> 00:48:00,719
Speaker 2: Yeah, well I'm really excited. I think we should have

932
00:48:00,719 --> 00:48:01,960
Speaker 2: a Jeremy back at something.

933
00:48:02,080 --> 00:48:03,759
Speaker 3: Yeah, we should, all right, shall we leave it there

934
00:48:03,800 --> 00:48:06,200
Speaker 3: for Let's leave it there. This has been another episode

935
00:48:06,200 --> 00:48:08,719
Speaker 3: of the Odd Lots Podcast. I'm Tracy Alloway. You can

936
00:48:08,719 --> 00:48:11,360
Speaker 3: follow me at Tracy Alloway and I'm Jill Wisenthal.

937
00:48:11,440 --> 00:48:13,879
Speaker 2: You can follow me at the Stalwart. Follow our guest

938
00:48:13,920 --> 00:48:17,760
Speaker 2: Jeremy Alaire. He's at jare Alaire. Follow our producers Kerman

939
00:48:17,840 --> 00:48:20,880
Speaker 2: Rodriguez at Kerman armand dash Sho Bennett at Dashbot and

940
00:48:21,000 --> 00:48:23,960
Speaker 2: kel Brooks at Kelbrooks. More odd Lots content, go to

941
00:48:24,000 --> 00:48:26,120
Speaker 2: Bloomberg dot com slash odd Lots, where we have a

942
00:48:26,200 --> 00:48:28,560
Speaker 2: daily newsletter and all of our episodes, and you could

943
00:48:28,600 --> 00:48:30,520
Speaker 2: chout about all of these topics twenty four to seven

944
00:48:30,640 --> 00:48:33,840
Speaker 2: in our discord discord dot gg slash oud Lots.

945
00:48:34,080 --> 00:48:35,960
Speaker 3: And if you enjoy odd Lots, if you want us

946
00:48:36,000 --> 00:48:38,800
Speaker 3: to do more episodes on the future of the payment system,

947
00:48:38,840 --> 00:48:41,480
Speaker 3: then please leave us a positive review on your favorite

948
00:48:41,520 --> 00:48:45,279
Speaker 3: podcast platform. And remember, if you are a Bloomberg subscriber,

949
00:48:45,360 --> 00:48:48,640
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950
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952
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Speaker 3: listening in in