The Wolf Of All Streets - Putting The “Stable” In Stablecoin | Jeremy Allaire, Circle

Episode Date: June 19, 2022

I sat down with Jeremy Allaire, co-founder and CEO of Circle, the company behind USDC. We’ve covered many questions that arise these days in relation to stablecoins: what are the stablecoins, how ��stable” are they, why USDC won’t have a bank run, why the demand for stablecoins is growing in the emerging markets, and what role the regulators are playing in the stablecoins development. https://twitter.com/jerallaire THANK YOU TO OUR SPONSOR ►► Have you ever had your exchange go completely offline during days of high volatility? Of course you have. We've all been through it. Those days are no longer with Bullish. Bullish is a new breed of digital asset exchange that empowers users to trade with deep and predictable liquidity across highly variable market conditions. They also have incredible automated market-making and industry-leading security. I can't get enough of this platform and it's fully regulated. Sign up here: https://thewolfofallstreets.info/bullish/youtube Bullish is licensed by the Gibraltar Financial Services Commission. Virtual assets and related products are high risk. Consult your investment advisor and trade responsibly. Bullish is available in select locations only and not to U.S persons. Visit bullish.com/legal for important information and risk warnings. FOLLOW SCOTT MELKER • Twitter: https://twitter.com/scottmelker • Facebook: https://www.facebook.com/wolfofallstreets • Web: https://www.thewolfofallstreets.io • Spotify: https://spoti.fi/30N5FDe • Apple Podcasts: https://apple.co/3FASB2c

As often happens, the crypto industry has found itself in a pickle, trying to differentiate between what an algorithmic stablecoin is and what a truly fully backed collateral stablecoin is. We have a problem with getting our definitions right and delivering that message to regulators. Well, Jeremy Allaire, the CEO of Circle, came to set the record straight and talk about why fully backed collateralized stablecoins like USDC are superior and what that looks like moving forward. This is a conversation you do not want to miss. Obviously, the talk of the town has been stablecoin, certainly in light of the term algorithmic stablecoin, which I would say is a horrible misnomer and needs to be eliminated

immediately. But do you think that it's unfair to even call these sort of competitors stablecoins? Yeah, it's really funny. And Scott, thanks for having me on the show. Like the whole word stablecoin, that was not something that we chose. That chose us, whether we like it or not. Back in 2017, when we first actually published the first white paper outlining what we were hoping to do around the space, we used the term fiat token, which is a lot less glamorous, or I don't know, it's just different. But the concept was like, hey, we can tokenize fiat currency. And that has a different meaning, right? If you're tokenizing fiat currency, well, what is fiat currency? Well, it's liabilities of central banks,

it's government debt, like treasury bonds, it's sort of what do we really mean when we get beneath the surface? Something that purports to represent a dollar, but in fact is a bunch of crypto collateral or maybe it's a mixture of commercial loans and other things. There's huge differences. And so we've been hammering for the last year, year and a half, not all stable coins are created equal. And now, you know, really recently it's been, you know, kind of, you know, how to be stable. What is stability? What does that really mean?

And getting to the essence and the heart of how do you maintain dollar for dollar liquidity and what's the right regulatory framework for that. And everyone's sort of feeling around a lot of issues, but look at a high level, if you go across our website, it's very infrequent that you'll find the word stablecoin. You'll see that we talk about USDC as a dollar digital currency. And just like there'll be Euro digital currencies and yen digital currencies, we have a dollar digital currency, which is USDC. I think we have a huge problem in our industry in general with our vernacular and verbiage. I mean, I hate the term cryptocurrency, to be quite frank, because 99% of them are not

even attempting to be currencies, algorithmic stablecoin, as you said, even the term stablecoin, right? And so I think, I don't know if the crypto industry needs better PR, but I think we certainly need better wording. Yeah, no, I mean, look, some of this is just going to come from the industry and users and how we describe things. Some of it might end up being statutory. There might be statutes that define the different types of crypto assets. And there's something that really is a currency. There's something that's a commodity. There's something that is more like an investment contract or whatever. There's lots of different ways to think about it from a definitional perspective, for sure.

But here we are, and people are talking about these as dollar stablecoins. And certainly, we'll keep hammering the differences and what's really important, really, at the end of the day for users in the market to kind of know what they're dealing with. Well, I think transparency is obviously essential and important. But there has been a challenge, I think, in this industry. Jeff Dorman from ARCA actually recently pointed it out. He somewhat said, we demand transparency, but then if you're Luna or a Celsius, whales can attack that transparency

and effectively liquidate your assets and make you insolvent because you've now shown them exactly where your attack vectors are. It's a challenge. Yeah, I mean, look, I mean, I think there are reasons why there are registration rules, investor protection rules, market conduct rules, market surveillance rules, consumer protection rules, anti-competitive rules.

There's a reason for that because people get hurt, people lose money, it can be extraordinary what happens. And so I think we're in an environment where crypto is going to be held to a higher standard. And obviously, you know, Bitcoin is Bitcoin, right? Bitcoin is, it is just what it is. But the way in which market conduct happens on different things and all these things, right, that things need to be held to a higher standard. And I think that's very self-evident to anyone who's on the outside looking in. I think when you're on the inside looking out, I think, you know, I think people are increasingly just kind of coming to grips with that, you know, more and more. But it's interesting. There's a reason why USDC is actually the most redeemed stablecoin really ever built. And that's because everyone understands that USDC is always held in reserve as a dollar in a dollar liquid asset under a regulatory framework that defines it.

So there's not like an arm there or something to attack there unless you're going to attack the T-bill market. Right. And, you know, that would be, you know, economic warfare between, say, China and the U.S. or something like that. But, you know, we've redeemed and people focus a lot on like, is it liquid? Is it redeemable? We've redeemed over the last 12 months, 108 billion USDC. That's because it's liquid and always redeemable. And because it's always redeemable and you always get a dollar. That's why it's always held to a dollar. Is there any level at which it could mimic a bank run? I know the answer, but I'm going to give you an answer, the opportunity to say it anyways. No. I mean, this is, I think, the thing that people have to understand. Banks take your dollars and then they say, hey, I have an IOU. I owe you a dollar. Your balance, your demand

deposit account, your balance is an IOU. But then what the banks do is they take your money and they invest it. They invested in automotive loans. They invested in mortgages. They invested in commercial loans. They invested in whatever the heck their proprietary investing group wants to do. And they do that on a leverage basis, on typically like an eight to one leverage ratio. That's what a bank is. That's what you're investing in. So yes, there can be runs on banks because they don't actually have the money. They have essentially eight to one leverage and in a severe economic environment, that's why you have these mutualized insurance products like FDIC to backstop that risk. But nonetheless, that's the case. In the case of USDC, it's cash

and it's, you know, sorry, three-month U.S. Treasury bonds, right? So always, you know, U.S. Treasury bonds are the most liquid financial instrument in the world. The three-month U.S. Treasuries, that is even safer than a deposit in a bank because a deposit in a bank, you're kind of taking the risk, the underlying risk there. And so it's structurally very, very different. And we'd like to make it even safer over time. We'd like to have the cash parked at the Fed. And so you've got to cash at the Fed and you've got basically short-term government debt. And that gives you something that is as close to a cash or cash equivalent that you can get. That's imaginable, but it has internet

superpowers because it's operating as a digital currency on a blockchain. What steps would be necessary to actually be able to park the reserves at the Fed? We have signaled our intention to operate under some national regulatory framework for stablecoins. There's a lot of congressional work that's happening around that. And there are discussions around that. The OCC, which regulates national banks and thrifts and trusts and financial institutions, is looking really closely at this. We've got great engagement there. And so our hope is that there is a future structure where we have the ability to have the cash at the Fed. And I think there are multiple avenues to achieving that over time. It's interesting because I think in our industry,

we keep hearing SEC, CFTC, right? Sort of consumer facing regulators, but really isn't the end game here? The FDIC, the Fed, the OCC, the bank regulators, as you're talking about. I mean, the single probably largest choke point in theory for the crypto industry is banking access, right, in general. Yeah, I mean, I think, you know, there's a phrase all roads lead to the Fed. But I think, you know, when you're talking about, you know, representations of government debt money, which is what fiat is, what a dollar is, it's sort of, it is a form of government debt money, representations of government debt money, you know, those and the payment systems and essentially the systems of technology that express that in electronic form that enable it as a medium of exchange, that is supervised by what are often referred to as prudential regulators. They're looking at the fundamental risk of the

monetary system and the financial system. Those are the prudential regulators. They're looking at the fundamental risk of the monetary system and the financial system. Those are the prudential regulators. Those are not capital markets regulators. Those are the kind of core money systems regulators. And I think with something in particular like stable coins of the ilk, like USDC, that's really where that fits. And that's sort of what's happening. If you look at the legislative kind of regulatory proposals coming out of Congress, they're all focused on having it be kind of regulated in that space. Same thing in the UK, same thing in the EU, same thing in many, many other markets in the world, what just came out of the financial regulators in Japan. And so I think there's kind of a consensus view around this,

that that's the case. But of course, in crypto as a whole, there are absolutely markets issues. There are exchanges and different types of assets and investor protection issues and market manipulation issues and insider trading issues and all these sort of things

that markets regulators have worked on for a very long time. And you see that, you know, whether it be Coinbase or FTX or others who are super, super active in the U.S. regulatory dialogue are really advocating for market regulators to have a regime around crypto exchanges in the U.S. for sure. Yeah, I mean, markets hate uncertainty. And so I think that everyone would almost prefer bad clarity to no clarity at this point. It seems like the industry and obviously they're pushing towards the CFTC as potentially a more friendly regulator to get that done. But I mean, I challenging. Obviously, when you've got issues where various products and services sort of blow up, then that obviously creates an impetus for regulators to sort of say, hey, look, we got to draw some lines here and take action. And so obviously we're seeing that. And one could argue that that's a healthy thing to a large degree, right?

If in the end, what you end up with is some precedent and or de facto kind of frameworks that could end up being a healthy thing. Yeah. You certainly hate seeing the self-inflicted wounds and seeing sort of the ammunition being handed to the regulators right at a time when perhaps they were actually starting to look favorably at the industry. But in the end, I mean, not selfishly, but for you, that should push most of the interests and favorable regulation in your direction. Look, I mean, we've always, you know, I started Circle nine years ago. And my co-founder and I back in, you know, we were getting started nine years ago. And we always knew, and I always knew that we had to always work, you know, go in through the front door, as I like to say, and, and, you know, be open and educate policymakers and regulars

just do that. There's nothing to hide here. It's like, here's the innovation. Here's what we're trying to do. Here's what the risks are. Here's how we're managing it. Here, you know, here's how we interpret the laws that stands today and how we're going to be compliant in that and sort of working to do that. And so we've been doing that for nine years. I testified to the U.S. Senate nine years ago in November. And so it's just been something that's there. And I think at the same time, we've always tried to be really, really innovative and advancing what's possible, even where there isn't total regulatory clarity, because that's where innovation comes from, right? You innovate in gray areas and eventually

things get big enough that there's more of a perimeter that gets defined. And so I think that you're right, just that the approach of trying to kind of do things the right way in that sense will be important. Again, that kind of concept of like crypto held to a higher standard, I think is really important. But there is a lot to do that just has nothing to do with regulators. There's just so much that the industry needs to do itself. And there's so much sort of self-policing and there's so much more like accountability. And I think there's a lot of looking oneself in the mirror that needs to happen as well, because I think in a bull lot of looking oneself in the mirror that needs to happen as well, because I think in a bull market, it's really easy to sort of believe,

believe the hype on, on any which way, you know, on anything, any which way. But I think, you know, you know, things like, you know, kind of people just want to believe the financial alchemy of, of, of Terra Luna UST. They just wanted to believe it. They wanted to believe like this time it's different. This is something, but if anyone with reasonable analysis could just look at it and say, this thing is set up to collapse, but people just wanted to believe. And so I think for, for people that wanted to believe, you know, they got to really get underneath their assumptions and their cognitive biases and other things and try and better understand that. That's kind of self-policing in a sense.

Yeah. What's sad, though, is it's, you know, when you say that, it feels like it was just retail that wanted to believe. But I think that Luna was largely empowered by some of the biggest names and some of the biggest funds. And when you see those names and funds tacitly supporting it and throwing their money into it, how can you as maybe even a sophisticated retail investor who would dig in, but non-sophisticated investors, certainly, how could you be expected to not go, look, if they're doing it, it must be safe.

It must be secure. There must be something behind this. Yeah. No, I think that's right. I think that's right. So, you know, that whole affair will get litigated over time and we'll see where things end up. The good news is that there was actually minimal contagion from it. And I think it sort of passed in less of a hurricane than we expected after. It's probably not even worth talking to

death at this point. And I think what is, is the fact that now it seems that we have at least some legislators who are very clearly making the distinction between what a true, fully backed, collateralized stablecoin is and everything else. Do you think that, listen, that's what I hear because I'm deep down this rabbit hole. So of course I hear the Lummuses and the Gillibrands and the Toomeys who are saying these things. Do you think that there's a wider spread understanding of that, or at least a willingness for other legislators to dig in and learn? I think there is. I mean, I think there is a wider spread understanding. And I think, you know, we've been doing the hard work for a while.

And this is sort of, you know, first just getting the media who covers this space to kind of be able to differentiate. And that's been a battle, but one which I think we've largely won. It's been getting, you know, top participants in the financial system to acknowledge that. And so, you know, kind of hearing positive comments from the

head of the IMF at Davos, hearing positive comments about stablecoins done the right way from Chairman Powell, from Secretary Yellen, you know, hearing those things publicly in public testimony is really, I think, an indicator that, an indicator that people are hearing that. If I'm a member of Congress and I've got Secretary Yellen or Chairman Powell saying, look, there are innovative private sector stablecoin models that work, yeah, we might need to define some more rules around it, which deals with tail risk and other things, but still acknowledging it, I think it's a really big deal. And you're certainly seeing more of that. But on a grand scale, you might have some of the names that you mentioned who are active in the legislative process, but of the hundreds of

members of Congress, the many hundreds of members of Congress, the number who've actually got an understanding and can differentiate that is probably quite small. It's probably, you know, in the maybe a few dozen. And so there's a lot of work to do still. And if there is going to be legislation, and it is going to be sane and reasonable, we need everybody to understand this. The IMF comment blew my mind. That was the most out of left field that I've heard, because obviously they've been extremely, I'll say the nice word, skeptical of the El Salvador experiment. They openly pushed back against Argentina, who was moving in a favorable crypto direction, you know, and said, basically, you can't do that if we're going to offer a loan. Do you think that's because this is a dollar product and not necessarily a Bitcoin product? So the IMF would

be, or these organizations would be more likely to support something that obviously spreads the dollar? It's really interesting. The IMF has done a lot of publishing on digital currency over the past several years. And I think they've been looking at stablecoins. And in fact, the first G7 report on stablecoins was co-authored by one of the key people at the IMF. And they published a lot. And I think their vantage point has been, hey, the stablecoins could actually kind of meet a kind of what sometimes is referred to as synthetic CBDC, which is also an extension of this former concept of a narrow bank, but this idea that you could have a nationally chartered financial institution that has a narrow charter, which is basically to hold stable reserves and then enable a very low cost frictionless

payment system built on top of it. And that's the sort of synthetic CBDC, the concept being, hey, if it's got the same kind of characteristics as central bank M1 money, like, you know, which is sort of the dollar electronic records of the Fed or government bonds, short-term government bonds, if you have that kind of form of money and you can operationalize it as a digital currency and run on the internet and get all the efficiencies of that and the openness and interoperability and global reach, like that would be really powerful. So they've actually advocated for that. They've actually advocated for that as a more likely path to lead to innovation and financial inclusion than central bank digital currency models. And so it's interesting. They've been sort of, I think, out in front on this

that's different than their point of view about countries adopting Bitcoin, which I think they're quite negative about. But I think, you know, it's interesting, too. I mean, I think you're starting to hear people, including folks at the IMF, begin to think about the monetary sovereignty implications of digital currency. And, you know, the fact that a dollar digital currency like USDC can kind of exist everywhere, the internet exists, and people can use it around the world. And there's sort of money substitutes, and what happens with that and what happens to economic policy and fiscal policy and monetary policy in different parts of the world. That's already been an issue with dollarization as a general theme and sort of what happens if that gets on steroids because of the

frictionlessness of the internet. And so that's raising broader political and economic questions that I think need to be grappled with. Because I think in the end, maybe five years from now, 10 years from now, pick your timeframe, like the world doesn't need 190 currencies. And society, households and firms are gonna vote with their internet connections,

what economic system they wanna participate in. And they just will, just like they vote with their internet connections, what economic system they want to participate in. And they just will, just like they vote with what communication system. They choose to use WhatsApp, or they choose to use Signal, or they choose to use email. They're choosing these mediums that are built in software and protocols and internet. And that's happening with the economic system, the monetary system. And that is just going to pose really major issues for governments. And so this has to to pose really major issues for governments. And so this has to be grappled with clearly. Everybody knows that there are advantages to trading on both centralized and decentralized exchanges.

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Yeah. Listen, I'm a Bitcoiner, so of course I believe that Bitcoin's great store of value, is a great medium of exchange, especially for people in these places. And I'm you agree, but at a granular level, and something that people are starting to talk about more, is that most people in the world who are unbanked and underbanked actually want access to dollars. That's the thing that there is a dearth of. That's the thing that they can't get at a bank. That's the thing that is way better than the Bolivar or their peso or whatever hyperinflating currency that they have. And I'm not saying they shouldn't transfer it into Bitcoin, but anecdotally, you know, we have friends in Venezuela that we've sent Bitcoin over the years to help them.

Yeah. There became a point where they said, how about stable coins? Yeah. So those dollars. Right. And that's the way that, right. Yeah. And so I think, you know, I think. Right. And that's the way that, right. Yeah. And so I think, you know, I think one of the things that's important in this market, and I've been thinking about this for a long time,

is you have to kind of zoom out and take some perspective over different timeframes. And I remember really well, you know, when the, I don't know if you remember the block size debates that were happening.

Of course, it's hard not to remember them, but the block size debates, and it really brought to bear this big debate over is Bitcoin really meant to be like a utility for payments and scaling, or is it really meant to be this digital gold and this store of value, which eventually over the long run, once the monetary base is large enough in the many, many, many trillions of dollars of value, and mining is done, and you're in that transactional mode, where it becomes more of a unit of account. And I think if you take a very long-term view, I think that's right. And I think there's good arguments to say a monetary unit like that could become more important as a unit of account in the future.

And so I think for some people, it's sort of like, hey, I need an everyday medium of exchange that is sort of relatively price stable and that is widely accepted and understood around the world. And then I need kind of short-term savings instruments, which maybe can predictably, you know, give me, you know, protect me from the short-term inflation and, or maybe, you know, slightly exceed it. And then I need long-term savings. I need ways to sort of say, Hey, I'm, I'm, I'm taking a view over the long-term value and store of value and doing that. And, and I think there's different crypto assets for all of those scenarios, different, you know, whether it's a stable coin or a DeFi protocol that one uses or a crypto commodity or something like Bitcoin itself. You said crypto assets. That's the term I would like to replace cryptocurrencies with, by the way. Everyone says digital assets, but then I'm like, what about our MP3s? And so I really like crypto assets as the term. And so have you actually, do you have data or have you seen anecdotally support of the idea that I just presented that you're seeing increased adoption on the ground in countries with hyperinflation or with a mass of the population underbanked? Yeah. I mean, we've been seeing really for the past two plus

years, we've been seeing consistent demand for USDC in emerging markets. And I think that has grown in some ways, right? The pandemic caused more fiscal and monetary instability in more places. And one could argue fiscal and monetary instability in more places. And one could argue fiscal and monetary instability here in the United States. But it's had that effect. And so corresponding to that has been this kind of rise in demand for things like USDC. So we've definitely seen that. And I would say that's accelerating. That activity is accelerating. So many startups we're seeing, so many companies building connectivity with USDC in markets around the world. And it reflects that. It reflects that kind of organic demand that's there.

Yeah, that makes perfect sense. It aligns with what I would expect it obviously to be. Now, interestingly, at Circle, you guys have a yield product, right? I believe the rates are the mid 4%, depending on how long. How are you able to, you're obviously talking to regulators and legislators. A similar product was actually presented to the SEC by Coinbase, which was dismissed outright. Yeah. Actually with the threat of litigation, I think. Right. base, which was dismissed outright, actually with the threat of litigation, I think. How are you able to offer those, which I believe for this space, especially very reasonable yields?

Yeah. So as you know, there's a large market for people who want to borrow stable coins like USDC. And so there's a borrowing market, there's a borrowing and lending market. And that borrowing market, there's an institutional borrowing market, and it's sophisticated institutions that are at scale, generally, who want to borrow USDC or borrow other stable coins. But USDC is one of the most popular that people want to borrow. And those borrowers are willing to borrow at reasonable interest rates, four or five, six, seven, eight, even 10%. That's sort of the cost of capital to borrow. If I was a business, say I'm a financial business or a non-financial business, and I go to a bank just

in the traditional sense and say, I want to borrow capital. I want to work in capital line, right? You might get a 7%, 8%, 10%, 12% interest rate. If I'm a consumer and I go to a bank and say, I want to borrow, well, they have a credit line. It's called a credit card. And you can borrow up to, say, $50,000 at a 17% interest rate. And so there are very clearly like these dollar borrowing markets. And there are these institutional stablecoin borrowing markets that exist. And so what we chose to do was build a product that was regulated. So we sought out a regulator that would supervise a lending product, the risk management, the collateral needed, the custody, security, any money laundering,

the whole thing. So we worked with a regulator. And the other was that our analysis was that to offer such a product is selling a security. It is offering a security. And so Circle Yield is offered as a security and it's only offered to accredited investors. And so it's not something that's available to anyone. It's sophisticated institutions and accredited investors and the like. And so there's full risk disclosures. You're purchasing a note, which is an investment contract. That's what you're doing when you take your USDC and you put it in your circle account, and then you create a loan and you get that interest rate. And so we designed it compliantly. We designed it understanding it was a security. We designed it with a regulatory framework. And

the entire thing is driven by very high quality institutional market participants. And so that's how we allow it to do what it does. And I think it's a very good product. And as we're seeing the products that we're out offering, too good to be true, whether it be Anchor or Celsius or what have you, I mean, some of these are running into real challenges. Yeah, that makes perfect sense. I actually wasn't aware that it was securitized and only available to accredited investors. So yeah. So that puts you very safely within the framework.

But it obviously begs the question, and I think everyone's assumption is, why would people borrow USDC? Is it so that they can short? I mean, look, USDC is becoming like the preferred working capital of the digital asset world, right? Whether you're a trading firm or a startup, so many startups are actually in this space, raise their capital in USDC. Circle Ventures, we've done 70 investments and we invest using USDC. People manage their Dow Treasuries using USDC. And it's increasingly just viewed as the kind of dollar treasury and a dollar mechanism. And so to the degree that there's just working capital demand and working capital borrowing demand,

that's there. And then similarly, institutional market participants who are borrowing to pursue whatever particular investment strategy, they're borrowing USDC because that's what you need to participate in the markets. And if you're going to put on an investment strategy, you're doing that with stable coins. You're not doing that with a traditional bank wire. Can USDC become large enough that a central bank digital currency in the United States is effectively pointless? I mean, our view is very much that the path towards dollar digital currency kind of ubiquity and adoption, not just in the US, but around the world is through well-regulated private sector market competitive forces. And that technology innovation, which is, this is very much a technology innovation problem and public internet infrastructure, which is what blockchains represent.

It's a kind of public good, public internet infrastructure. That's the fastest path towards, you know, competitiveness for dollars on the internet. And if you just look at every innovation in electronic money, whether it's the wire messaging system or checks and check clearing to the invention of the credit card, the invention of the debit card, the invention of the ATM, the invention of PayPal, and then Apple Pay, and then stable coins, and then stable coins, these are all driven by private sector innovation, a lot of times with standardization happening around them. So de facto standards or explicit standards. And I think that's sort of

what we'll see here as well. And, you know, the central bank didn't build any of those things. They really let a well-regulated private competitive market execute on that. I think that's very Western. I think that's how a lot of that's happened. There are going to be parts of the world where governments centrally manage and control things, where governments want greater surveillance. They want to be able to be monitoring more of consumer behavior. They want to be able to eliminate private sector competition. And in markets like that, like China, that might make more sense for what they're trying to achieve in an authoritarian regime. But I'm not convinced that that's the value system that people in the

West really want to see. I think people want an air gap between their money, their wallet, and the government. You mentioned, obviously, a central bank digital currency in China. That's a very different proposition, correct? I mean, with very different goals and very different ambitions. Totally. I think the message here that we've been delivering to policymakers in DC is, you know, the strategy can't be to out China, China. The strategy has got to be, what are your strengths? What are your strengths? What makes the West so amazing? It's openness, competitiveness, free markets, you know, the ability to build on this public commons and do that and privacy preservation. These are important values. And those are, I think, important to how, you know, how these geoeconomic regions compete. And this is going to be an internet scale competition. Do you think that there will be demand or popularity of stable coins, or we'll call them fiat coins, for every currency in the world? Or it still seems that even in the crypto industry,

there's very little demand even for Euro-back backed coins or anything else. So, I mean, I think this idea of international stables is super powerful, actually. And I think in some ways, as you said, right, the demand in the crypto world has mostly been around dollars. But I think that's really changing. As you know, we just announced Euro coin, which is a Euro backed stable coin, which is a Euro-backed stable coin, which is going to be available in the coming couple of weeks, and which I think is going to provide the same kind of quality and the same kind of experience that people have come to expect with dollars, but with Euro. And I think it's indicative of, I think, something that's happening, which is that crypto and digital currency is going to find its way into more payments, trade, commerce, and other applications.

And it's sort of that evolution from a purely kind of speculative value phase into a utility value phase. And with that utility value phase, you know, kind of FX, trade, settlement, and commerce becomes a lot more real. And so as a result, not only are we launching Eurocoin, but we actually expect there to be real proliferation and more fiat denominated stable coins and digital currencies, because I think that that kind of real world utility is starting to come online. And so I think that's going to be something that I think is worth really watching closely over the next couple of years. And obviously, we're excited to have the second largest reserve currency in the world being something that we're issuing and making available for people to build on and use. That's really exciting. I have to imagine that getting there with the regulators all over

Europe would have been a challenge. So it's a pretty incredible feat, I would imagine. Yeah, I mean, look, we're starting out issuing this out of the US under the same regulatory framework that we use for USDC. And I think there are legislative proposals that are near final in the EU, which will finally define a framework for regulated stable coins in the EU. And we're super excited to obviously be registered and operating under that as soon as there's clarity on what those laws are going to be. That makes sense. Speaking of clarity on laws, I actually had the opportunity to sit down with Kirsten Gillibrand recently right after they announced the bill. And I was really impressed, to be quite frank, at how thoughtful it was. I would love to hear your thoughts on the Lummis-Gillibrand proposal, obviously stable coins, as they call

them, being a huge part of that. Yeah, I mean, look, there's a lot in that bill. And sort of maybe my first comment is, there's a lot in that bill. And so I think it is probably the first comprehensive set of legislative proposals that touch on many of the issues, many of the important issues, everything from tax treatment to definitions of assets to specificity around types of regulators, stable coins, et cetera. So I think it's ambitious. There's a lot that I like about it. I think maybe kind of narrowing in for us, obviously, we do care about all of those issues and they impact us directly or indirectly. I think the one we're most focused on is the stable coin policy side of it. And I think it's a pretty sound set of proposals. I mean, I think it's relatively consistent with what we saw from Senator Pat Toomey, who put forward a proposal. We've seen some proposals come out of Democrats or both bipartisan

proposals in the House as well. And so I think when you kind of draw those together and you kind of look at those and kind of break it down, we're starting to get to potentially a consensus view from both Democrats and Republicans on what stablecoin policy and regs could look like, which is to have a national framework for it, to have national standards around transparency, reserves, liquidity, auditing, reporting, and then potentially to have a way to kind of be registered and licensed through the U.S. Treasury Department, which I think would be a really positive step and would provide a really powerful signal to the rest of the world that this is a national infrastructure for how dollars can function that the rest of the world could depend on as well.

At the very least, I find it incredibly impressive and encouraging that we have the president of the United States putting an executive order that this is now on the floor. Three or four years ago, I would have called you crazy if you said that in 2022, this is what we would be seeing. Totally, totally. Well, I thank you for your part in that.

Obviously, you've been a huge proponent in pushing it extremely hard. And I can't wait to see what happens moving forward as we obviously sort of gain some clarity and see what makes it and what doesn't, I guess, so to speak. So thank you very much for taking the time. Much appreciated. Absolutely. My pleasure, Scott.