Unchained - Jeremy Allaire on Circle's ‘Multi-Decade’ Strategy and Where Stablecoin Regulation Is Headed - Ep. 543

Episode Date: September 12, 2023

It’s been a busy year for USDC issuer Circle, with several new product launches and partnerships, a crypto banking crisis to contend with, the entry of PayPal into the stablecoin business, and plenty of new global regulatory developments, including a bill in the U.S. now making its way through Congress. Circle co-founder and CEO Jeremy Allaire joins Unchained for an in-depth discussion on the reasons behind Coinbase’s investment in Circle, how Circle has emerged stronger from the banking crisis, what he thinks of PYUSD, what he likes and doesn’t like about the current U.S. stablecoin bill, and his thoughts on what the final bill will look like.  Listen to the episode on Apple Podcasts, Spotify, Overcast, Podcast Addict, Pocket Casts, Stitcher, Castbox, Google Podcasts, Amazon Music, or on your favorite podcast platform. Show highlights: why Circle and Coinbase created the Center Consortium and why Coinbase acquired a stake in Circle whether Circle is aiming to be acquired or become a public company, and why Jeremy is pursuing a "multi-decade" strategy why Circle partnered with MercadoLibre and the stablecoin usage in Latin America [may need to cut if embargo does not stick] how the company has been supporting developers to build applications why Circle is launching native USDC on so many new blockchains  what the purpose of cross-chain transfer protocol (CCTP) is and what the big problems with bridges are how Circle responded to Silicon Valley Bank’s collapse and why the world began to feel that "it's not safe to be exposed to the US" Jeremy's thoughts on the launch of PayPal's stablecoin, PYUSD why having stablecoin legislation is a "national priority," according to Jeremy why Jeremy is a proponent of a fully reserved banking system why he thinks the US needs to "aggressively" take action to preserve the global reserve currency status of the US dollar how China’s national digital currency is likely to develop how crypto can provide a better way of providing identity without giving up privacy why blockchain technology is much more than just a financial regulatory matter Thank you to our sponsors! Crypto.com Arbitrum Foundation Toku LayerZero Guest: Jeremy Allaire, cofounder, Chairman and CEO of Circle Previous appearances of Jeremy on Unchained:  Crypto on Every Corner: Driving Adoption With Jeremy Allaire and Meltem Demirors Circle’s Jeremy Allaire and Sean Neville on Why Crypto Will Be Bigger Than the Web Jeremy Allaire on Why the US Government Needs a New Category for Digital Assets Links Unchained:  Coinbase Acquires Equity Stake in Circle Amid USDC Updates and Market Challenges Will PayPal’s PYUSD Steal Market Share From Tether and Circle? The Fall of SVB: What Happened and How It Affects Crypto CoinDesk:  U.S. Stablecoin Bill Takes Big Step Despite Fight From Democrats, White House  Circle Seeks to Make Crypto Payments Easier With New 'Programmable Wallets' Written Statement of Jeremy Allaire Before the United States House Committee on Financial Services, “The Future of Digital Assets: Providing Clarity for the Digital Asset Ecosystem” South China Morning Post: Head of crypto firm Circle accepts ban in mainland China, but sees role for yuan-backed stablecoins  TechCrunch: Solana Pay integrates plug-in with Shopify for USDC payments  Decrypt: News Explorer — Circle Partners With Mercado Libre to Bring USDC to Chile  Jeremy’s comments on the launch of PYUSD Learn more about your ad choices. Visit megaphone.fm/adchoices

The Fed wants it, Treasury wants it, Congress wants it, the White House wants it. It's a priority that has been set by the highest levels of the administration that we need to have dollar stable coin regulation in the United States. Hi, everyone. Welcome to Unchained, your no-hype resource for all things crypto. I'm your host, Laura Shin, author of The Cryptopians. I started covering crypto eight years ago and as a senior editor of Forbes was the first Main Tree Media Reporter to cover cryptocurrency full-time. This is the September 12th, 2023 episode of Unchained. The game has changed.

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Make it simple today with Toku. Buy, trade, and spend crypto on the crypto.com app. New users can enjoy zero credit card fees on crypto purchases in the first seven days. Download the crypto.com app and get $25 with the code, Laura. Link in the description. Today's guest is Jeremy Allaire, co-founder, chairman, and CEO of Circle. Welcome, Jeremy. Thank you, Laura.

It's really great to be back on the show. and see you. Thanks for having me. Yeah, it's been a while, not, you know, out of any desire to not talk to you because Circle has been making waves. And one of the most recent bits of news is that you've dissolved the center consortium that was managing the development of USC and Coinbase now has taken a stake in Circle. What was the impetus behind these moves? Yeah, it's really exciting. I mean, there are a few pieces to this. I think the first is, you know, if you go back a number of years, you know, we, we sort of invented USDC and kind of debuted it to the world, you know, just over five years ago. And, you know,

when we, when we created USC, you know, we had a vision for like what a protocol could be for fiat tokens is what we called them. They weren't called stable coins really broadly then, but some people did. But that could work, you know, on blockchains. And, and that you could build something that would allow for a kind of interoperable value exchange, you know, built on these open networks. And so we had a big set of ideas and we really thought about these kinds of protocols as things that would benefit from sort of having standards around them. And it was really important to us when we got started that we could kind of develop those

standards together with other industry leaders and kind of have a shared, a shared stake in the success of a protocol like USDC. And so we were very fortunate in 2018 to forge a partnership with Coinbase. It was a really important strategic partnership for both firms to drive USDC in the market. And as part of that, you know, Circle was sort of issuing USC. It was sort of were the regulated electronic money transmission. firm and issuing it. But we had a lot of ideas for how that could evolve over time. But also, most importantly, while there were regulations around like what money transmission was and how

a firm like Circle needed to operate, there were a lot of things about stable coins in particular that, you know, there weren't really regulations around, like how to hold the reserves, how to manage the security of the network itself, you know, all these kind of governance issues in a sense that were needed and how to deal with, you know, law enforcement interactions and other things. And so we created Center Consortium with this idea of kind of creating self-governance around a stable coin and published more and more of the policies of that and so on. Now, what's happened in five years, a lot of things have happened. So one is, you know, USDC went from, nothing to being one of the most important digital currencies and digital assets in the world today.

It went from very small to being a, you know, a billion-dollar-plus, you know, revenue stream business today. But also most critically is, you know, really starting a few years ago, governments sort of said, well, we're actually going to govern this. Like, we see stable coins as part of what I refer to as the prudential regulatory framework, meaning the regulatory framework that the central banks and the major regulators of payment systems wanted to have rules around. And that was really key. And so kind of coming back to the heart of your question, which is as governance goes from kind of a self-governance model to a government governance model, the kind of nature of this

changed. And so, you know, working together with Coinbase, we looked at, you know, how do we, you know, how do we make sure that Circle can continue to build and innovate and. do what we need to do as the issuer and operator of this and do it in a way that is responsive to the regulations that are emerging all around the world on stable coins and stable coin issuers and make sure we can follow those guidelines now that there are rules that are kind of out there and also, you know, have really, have continued to have really strong aligned economic incentives to make this, you know, as widely successful as possible. And so a mixture of things there in terms of,

them taking a stake in Circle, sort of taking full-on ownership over all of the development operations of USDC, but also making sure that this can work in the context of all these new stablecoin laws that are popping up around the world. Yeah, you know, it's funny because when I saw the news, it sort of felt like the consortia model

was sort of the crypto way of doing things, and that was appropriate for a time when, yeah, USDC was smaller. This was something that was really kind of more focused on the crypto community. But of course, now the conversation has just changed so much. And we have regulators and lawmakers that are really looking at this space. There's probably going to be legislation about it. And so it felt like, oh, they're moving to a model that can fit into existing regulations.

Yeah, big time. Yeah, I mean, something else that was interesting, which I'm sure you saw, is that the news of this arrangement caused some speculation that Circle was setting itself up to be acquired by Coinbase. And I was wondering, as the CEO of Circle, which direction are you working toward when you're steering Circle to going public or to an acquisition by another company such as Coinbase? Right. We're definitely on the path to be an independent public company.

We've had the benefit of having a number of strategic investors in the company over the years. More recently, BlackRock took a minority stake in the company as part of a broader strategic partnership between the firms that was last year. Having a stake in a company can create really good product and value alignment, and that's really key. And it's important. I want to make sure that, you know, Coinbase has a stake in our long-term success in addition to being able to make money from the SDC. That I think that's like a win-win. But, you know, as a company, just to be clear, like, it's our 10-year anniversary. So it's a, you know, it's a fun year for us. Congratulations.

Thank you. And, you know, I say this often, but, you know, when we founded the company 10 years ago, you know, I made it very clear to my investors and employees that, you know, this is a multi-decade journey to really realize the vision of the company. And, you know, when you think about kind of where we are today, right, there's whatever, a hundred and some billion stable coins in circulation. Yes, there's a lot of volume of transactions that are happening, but this is like barely begun to penetrate the financial system.

And so there's just an enormous amount ahead and a general purpose, you know, protocol and utility for dollars on the internet, it has an, there's an enormous market to go after there, not just for the movement of money, but actually just the. having money represented and stored in this kind of form, you know, there's 25 trillion dollars of electronic dollars in the world across the different kind of formats of that. And so we're really quite small. So and frankly, like the utility of programmable money and the utility of a frictionless medium of exchange that becomes possible like this, we're like just beginning to see the value of that. And so like I would just say for everyone out of

out there like Circle still, even though we're doing a lot of revenue and very profitable, we're an early stage company as far as I'm concerned. I view Circle as an early stage company right now. And I think when I think about what I'm trying to do and what we're trying to build, it's a multi-decade kind of strategy. And I think I'm excited to see that through and really to do that as a, I hope a very strong, you know, independent publicly traded company. Well, one of the steps that's definitely going to take you out of the early stage development is that you recently announced that the largest e-commerce and payments firm in Latin America, Mercado Libre, announced that it's going to adopt USC.

So tell us a little bit about that partnership and what impact you think it'll have on Circle. Yeah, I mean, it's very exciting. It's a tremendous firm that has paved the way for kind of modern commerce, and they play a really big role in payments as well in Latin America. And it's part of a broader theme that we're seeing around, you know, the growth in sort of demand for digital dollars and demand for using those in markets where maybe local currencies aren't as exciting. And Latin America is definitely one of those places.

But I think very specifically, you know, the first phases of this are going live, you know, in specific countries in Latin America, you know, ultimately we envision that this will be very broadly, you know, rolled out. But I think it's important as we look at sort of indicators of where we are in the adoption of stable coins that this is going from, oh, this is just used as something to trade on defy or this is just, you know, used to for arbitrage traders or whatever, you know, to speculation. Yeah, speculation to, no, actually, this is a, this is, this is, is something that is fundamentally providing, you know, dollar store of value to people who need it, providing a very efficient cross-border payment mechanism for people who need it. And these are

major mainstream companies that serve hundreds of millions of users. So, you know, Mercado-Libra has, I believe, around 200 million customers. And that's tremendous. And so we think about, you know, how do we grow the tam of wallets that can transact in USDA? And, you know, Coinbase has over 100 million wallets that can transact in USDC. These kinds of partnerships really grow that. And there are many, many, you know, wallets that people use. I think Metamask has 30 million active, you know, users, and they can all transact in USDC.

And so as we see more and more wallets, these traditional, you know, kind of fintech commerce firms, digital wallets companies, and then all the new people building, you know, the next account abstraction, smart account wallet that's going to be the killer app for making all this usable. Like as those things get built, it just creates more and more avenues for people to use USDC. Yeah, and I want to talk about those tech developments. But before we move on, I just wanted to ask for the Mercado Libre. So obviously, like, let's say I'm in Chile and I, you know, I'm going to buy something on Marcaro Libre. It would show me the Chilean peso price.

But then in addition, would it have this price in USC? Or is because like, is the consumer also recognizing that their price could be denominated in dollars? Is that how that will work? I don't actually have the, like, the details of the user experience, uh, exactly how that is, is set up, um, in front of me. Um, what I, what I do know is that they have a, lot of demand from their customers to hold and transact in dollars. And so this is really a really powerful way to move more of the store of value that exists for their customers into

into digital dollars. And then obviously, once you have those, the usefulness of them, both within their own platform, but the power of all of this and the reason why stable coins are interesting in some ways in the first place, and USDC specific, is because of the reach, because of the interoperability. Like, I want to live in a world where I've got a digital wallet and I'm in the Philippines and I know someone in Brazil and I know someone wherever. And like that's power of crypto, right? Open networks that you can transact over directly, peer to peer, interoperably.

I mean, that's really the power. And so, you know, kind of, you know, I think that's ultimately the big unlock that comes from a partnership with Circle like this. And you've tweeted that 70% of USDC usage is from out of the US. Is that one of the drivers that people simply want to keep their savings in US dollar denominated currency? Or what's driving that? Yeah.

Well, it's a few things. I think the first is just the whole blockchain ecosystem, if you think about it, is highly global, right? We know this just in general. Just like there's just huge amounts of the activity are in markets all over the world. And so to the degree that you need, you know, a trusted, redeemable digital dollar, right? USDC is a great option. And so it sort of follows the overall growth of that of that international market as well.

However, we've absolutely seen a major uptick in basically that demand for, you know, store of value in dollars. and we've seen that in particular come from emerging markets. And so we've seen growth in emerging markets, Latin America, Africa, Southeast Asia, other places like this, where we've seen just so many startups that are launching things and building partnerships with those, major companies, major global companies as well, that are actually embracing this as a way to settle transactions. So that international dimension is very powerful, and I expect that to continue to be the case. And this, you know, I'm sure we'll get to this in the conversation, but this ties into like,

why should the U.S. government care about dollar stable coins? Well, it turns out that it makes digital dollars a powerful export product of the United States that it enhances the soft power of the country and reinforces the economic interests of households, firms, and the government itself. And so there's a strategic alignment of interest between, you know, the proliferation of dollar stable coins, especially ones that are well regulated and, you know, really try and follow the law and supervised and national economic interest and foreign policy interest as well, which is, you know, for some, you know, controversial, but it is, it is a fact. Yeah, and you're right. We will definitely unpack that because I know you probably have a lot more

to say on that topic. But first, let's go back to the tech development. Circle just released a new programmable Web Free Wallet platform that you believe will help businesses offer digital asset payments to customers. Tell us more about that. Obviously, we're really well known for USDC and the stablecoin that we offer. On the other side of that, right, you know, USDC itself is a protocol, right? It exists as a dollar protocol that any developer can build on and plug into. And that's happened, right? All across defy and wallets and custodians and all kinds of different products and services, they integrate to that protocol and then they know, oh, I have a safe way for my users to store and transact and settle dollars. So a lot of the success of USDC has really been built on working with developers and

working with developers that are, you know, trying to create value and they need a trusted, you know, kind of stable coin built into that. But we see that we can do a, a lot more as a company. And so last year, we did a multi-hundred million dollar acquisition of a company called Sabo that had really, we thought, really outstanding technology for deploying on blockchains, managing and deploying smart contracts, handling like wallets and wallet security and all these things. And we got really excited about this category that was not yet emerged, but I think is now

emerging of like Web 3 services. And the analogy is, you know, Amazon, you know, built their own e-commerce infrastructure and they said, hey, what if we took the infrastructure that was behind that and we started to make that available to developers to build on top of? So Web2 developers could like bring online an application really easily. And that gave birth to Amazon Web Services. And so when you look at if you're a startup or you're a big company or whoever you are and you're like, I want to build an app that integrates on top of blockchains. I want to not have to worry about managing the infrastructure of that and the security and the operations and the compliance, the really hard problems. And I want to just

focus on delivering like a delightful end user experience that is safe for the users and safe for me as a developer. That's a big need. And when we all talk about developers, There's lots of discussion about like developers on blockchains and the developer ecosystems on blockchains. And that's a really important thing. And we, you know, as you know, like we have, USDC is rolling out on six more chains. We could talk about that too. But the bottom line is the number of developers that are capable of like easily building an app that integrates on blockchains and makes it safe for their users to hold, whether it's an NFT token or a stable coin,

and making a payment, the number of developers that can do that today is tiny. There's like a hundred million developers in the world that can write software. And there's about a half a million that are able to build on blockchains. And if we want to see Web2 go, you know, evolve into this new architecture, right, we have to dramatically change how easy it is for these developers to build, operate, and run these kinds of apps and services. So for us, we see that as a huge opportunity. It's super aligned with what we're doing with stablecoins.

Because at the end of the day, whether it's a commerce app or a financial app or a consumer app or whatever it is, all of those apps are going to need to use money and they're going to need to move money. And we can make it super seamless and take advantage of breakthroughs that are happening in blockchain infrastructure and EVMs and other abstractions, which we can talk about here as well. we can make that so simple that it just proliferates the number of useful apps. And we want to grow the number of useful apps. And if we grow the number of useful apps and they're plugged into our into our into our protocols like USDC,

that grows the network and it grows the network utility. And if we can do that, that will generate a lot of value for us. And so this is a new revenue line. Like we're we're monetizing it like AWS. It's like pay as you go. It's utility pricing. And like if there's a huge. you know, a hugely successful app, we can generate a lot of revenue. But it's very affordable.

Like, you can just get in and go and it's truly self-service. And so it's actually going back to my own roots. Not a lot of people know, but like I started my career building developer platforms, programming languages, some of the most popular web development tools ever in history I was the creator of back in Web1.0 and Web2.0. And so I love these kinds of products. And it's, I think it's, it's a really important moment, and I think it represents a shift in whose circle is as well, from sort of the stablecoin issuer to being more of a platform-oriented business in this whole Web3 space. I imagine it's probably a little bit more fun for you than the regulatory step. It's just my speculation.

But I wanted to ask about the blockchains, you're adding six new ones, you said. And is that driven by demand that you're seeing? you know, developers on that side or D5 builders are saying, we need this? Or is it you saying, we just want to make sure that if any of these take off that we're going to be there? Like, how are you making those decisions? Yeah. It's a little bit of both. There are obviously like hundreds of blockchains out there, right?

And we're not going to go and launch like native USDC on like hundreds of blockchains. There are many of those that are, there's like a lot of dead chains, right? and, and, you know, I'm not going to name names, but like, you know, there's, there's a, there's a, you know, a long list. And there's people like, I mean, how many new, you know, opt stack, you know, layer two's are launching. Like, there's all these, right? There's, there's so much proliferation. What's clear to me is that, like, right now, there's still a lot of ongoing innovation happening in, in both layer one and layer two. Given what I just described in terms of the actual number of apps and the actual number of users of those apps,

we're still in like the early stages of the maturation of that. And so, but it's very likely that in the coming few years, you're going to start to see some like power law curve type of adoption and you'll see, you know, maybe there'll be five different layer ones and layer twos that, you know, take up, you know, whatever, 80% of the market. But right now there is a lot of innovation and competition. And there's like completely new architectures that are coming out. And there's still really hard problems to solve around privacy, security, scalability.

You know, all these, there's still hard problems to solve that haven't been solved. We want to be Omni-Chane. We want to make sure that if there is an infrastructure that has, you know, a strong technical innovation and has some amount of developer traction or we believe is going to have developer traction, like we're going to, you know, work with that and do that. And so a lot of it reflects that. And we're not done, right? We're going to continue to be OmniChain and experiment with that as well.

But at the same time, the other products that we're building, right, are designed so that, you know, you could build an app that is multi-chain as well. And, you know, so our Web3 services and smart contract platform and so on will target, you know, multiple chains. And then we're also trying to solve interoperability issues as well, which is a huge issue that exists in a world where there are multiple layer ones and layer twos, and no one thinks that's going to end. We've really had a horrible, horrible way for people to move their dollars around, which is these bridges. And you have all these bridges. And the bridges basically, like,

you'll lock the USDC and then wrap it. And then there's like a wrapped version of USDC that's moving on these bridges, it's slow, it exposes these huge honeypots for hackers. And so, like, many of the highest profile hacks have been of bridges, basically, where there's been, like, you know, the developers have a multi-sig and someone gets a key. I mean, it's awful. And we're talking about like a billion dollars. Like a, and it's terrible. And USC is, in fact, the most bridged asset in, in the whole ecosystem. USDC is the most bridge asset. And So we built and launched a cross-chain transfer protocol for USC that it's called CCTV basically allows a user or a developer building an app, but just say we'll call it a user

to actually teleport USC from one chain to another without a bridge, without locking these, without any incremental fees. So you're not paying for a liquidity provider to make that transfer. And we're able to do that because we are the canonical mint of USC. And what that means is if I have USDC on, you know, on arbitram and I want to, you know, send that USDC on arbitram to a wallet on base or optimism or on Ethereum mainnet, like I I can teleport it directly and it will burn the USDA on that one side and it will mint the USC on the other side.

So it's faster, safer, and there's no capital inefficiency. And so it's a huge way to provide like safe, interoperable digital dollars. And it is an abstraction that allows end users. Like I don't, if I'm an end user and like you have a wallet and I have a wallet, I don't really want to care about like what layer one or layer two you're on. I just want to be like, I have USDC, I'm sending you this and you send it back. It should just work and it should be safe. And that's what this allows.

So we're also, in addition to innovating and bringing USC to change, we're also a protocol developer and we're building new protocols that make it safer and easier for people to use these digital dollars on these networks as well. And so, yeah, I mean, we're excited. We launched these new chains, some of these new chains last week, and we launched more routes, as we called them, for CCTV as well last week. And so it's all part of just making this the most useful, safest digital dollar on blockchain networks. So all of that is super interesting.

Circle faced an existential moment earlier this year when $3.3 billion of its reserve, were locked in Silicon Valley Bank, which then failed. Since that time, USTC has been losing market share against Heather, what has been your strategy to recover from that event? Well, there's a bunch of pieces here. I think the first is just to understand how our infrastructure works. And I think one of the key things that we do take a huge amount of pride in is the fact that we have the most transparent disclosures in terms of our market infrastructure. So we disclose all the banks that we work with. We disclose the details on every single bond treasury bill that we hold down to the serial number, down to the date.

And we actually right now have about 94% of the reserves are held in an SEC registered and supervised structure called the Circle Reserve Fund that BlackRock manages. and you can go to, if you search for USDX, the ticker, you can go and see within that on a daily basis every single thing there. So you can understand exactly that the safety of this is, and that is a compliant registered infrastructure. There's no one else that has that in the market. And so we have a very, very high degree of safety and transparency that comes from that. The second piece, though, is sort of just thinking about, you know, what happened. I think there's some pretty dramatic things that happened to the whole industry. And obviously, we were unique in that our own specific exposure in terms of a bank,

a large publicly traded bank with $170 billion of assets, you know, over the course of a 48-hour period went through an extraordinary run that had nothing to do with crypto. That was a run that happened when there were essentially disclosures that they had taken huge losses on their own balance sheet. And Goldman Sachs was unsuccessful raising money for them. And so I'm happy to take you through kind of what happened there. But that was a shock that affected the entire U.S. financial system. And we still have banks that are failing on a regular basis for similar reasons. But up until the day before the SVB bank failure, they were one of the, you know, very well-rated, A-rated, you know, financial institutions. And so it was a true shock

to, other than certain hedge funds who had been shorting them, it was a huge shock. The other thing I would say is that, you know, we have always sought to keep up-leveling the market infrastructure that sits underneath the SDC. And so that meant, you know, having more and more redundancies in terms of the banks that handle the transactions that allow us to see the flow. And just to put it in perspective, in a matter of 10 days, you saw basically three bank failures happen. Two of those banks that failed or were seized were like the critical banking infrastructure for almost every firm in this entire industry.

And so you literally had overnight, virtually overnight. you had 5,000 plus companies around the world debanked. And there had been this growing pressure from U.S. regulators on banks in general, and that is ongoing. But you literally had like 5,000 plus companies debanked overnight. But do you mean crypto companies or just? Yeah, digital assets companies. Yes, yeah, yeah, crypto and digital assets companies that banked with companies like

Silvergate and signature, right? They were just, boom, like gone. Now, we had been doing a number of things, you know, prior to all this. One was we put in place, you know, we created this Circle Reserve Fund, which we did in our strategic partnership with BlackRock. And we were, we had effectively by Q1 of this year, we had, you know, we had moved over 80% of the reserves into that. And that was the, so within the stable coin space for the first time ever, you had an

SEC registered and supervised structure with all the protections that includes with daily transparency into the safety of that. And that's extraordinary. And again, this is a level of safety and transparency. Now, we also continue to maintain around 20% in cash so that we always could meet whatever the most extreme amounts of daily liquidity needs that there could be. Now, as you're where if you're in the digital asset industry, you're in the crypto industry, it's not like you can just go and open bank accounts with whoever you want to open bank accounts with. It's extremely difficult to get banks. And so it's also extremely difficult. A company like Circle who's been compliant from day one, does things the right way, super transparent, has all of this capability

in terms of risk management. It's not like we get to choose, hey, JP Morgan, will you hold our reserves? It doesn't work that way. If you're Microsoft, Yeah, you can decide which bank you want to put your cash assets in. But that freedom doesn't exist. However, we had been making huge strides in progressing our ability to use what are often called GSIDS, globally systemically important banks, as the infrastructure behind USDA. And in fact, we had just begun doing that for cash for USC, literally in the week or two prior to the SVB collapse.

And so we were actually very fortunate, even though all this stuff happened, we were very, very fortunate that literally we were able to sweep everything into the safest G-Sib in the world. And you can go and look at our attestations now. And you can look and see that, okay, all the cash is with like the safest, you know, globally, systemically important cash, dollar cash custodian in the world and in this trusted reserve fund structure. And so on the other side of this, we literally have the safest, most transparent digital dollar on the internet today. Like there isn't something that has that

level that's there. So in terms of what we're doing about it, we're just continuing to do what we have been doing, which has continued to up level the market infrastructure, to up level the transparency and the like. And the other thing I would say is, you know, the debanking that's taken place for this entire industry, the effects of that are still ongoing. I mean, it's become, as you probably are aware from many people that you talk to, it's become a major issue. What we have been doing is we've made a huge investment in basically building a global liquidity and settlement network for USDC. We're really excited about the progress we're making. We are bringing online banking partnerships in every major region of the world with high-quality banks that will,

allow for the creation and redemption or the liquidity of USC in those local markets as well. So you're not dependent on U.S. banks for that. So we're making huge what I consider to be just like market infrastructure investments. And the only reason we can do all those and that banks will work with us is because we are a compliant, transparent, risk managed company. Like some of our competitors, no one knows anything about any of the banks. And they never have. And it's just a huge mystery. And there's liquidity issues that, exist and like it's not clear how you actually redeem and and I mean that's like that's terrifying. It's like terrifying. If we're talking about the future of the financial system, you know,

like like totally shadowy things that no one knows anything about other than, you know, public pronouncements, like that's really tricky. So other things though, I mean, look, bottom line is we've been impacted by a perception that was really in the aftermath of this multifaceted banking crisis in the U.S. and the shuddering of banks in the U.S. and a wave of SEC lawsuits against almost every major U.S. crypto company, knock on wood. This huge set of things that happened over the course of, in a concentrated way, over the course of about eight weeks. And the rest of the world's reaction was, it's not safe to be exposed to the United States.

it's not safe to have money in an institution that's exposed to the U.S. banking system. It's not safe to be working with firms that are under the supervision of regulators in the United States. It's actually not safe. And so what we have seen is a flight from safety. And that's been pronounced. Like there's been a flight from safety. And in fact, other companies, you know, will tout like we're not exposed to U.S. stuff. And that's not. tenable over the long run, right? That is not tenable over the long run. And if you're up close to these issues, actually, there's tremendous progress being made. The Fed actually is coming out with the supervisory framework for banks that deal with crypto. There's clear rules that are merging

around stable coins. There's major financial institutions that are deepening what they're doing here. And so the opposite is ultimately true. And I think that that flight two-scentrales, safety, that will ultimately be the case. The other thing to note, though, is, it's really important is we also have a cyclical business. When interest rates were zero, and there's just massive amounts of capital flowing everywhere, including into crypto, that created an environment where, you know, if you had dollars, you could go and go after, you know, all kinds of, you know, investment and other activities in the blockchain ecosystem. And so you saw this huge growth in stablecoins. And we benefited from that. Now, you've had these huge increases in rates on a speed that we just

haven't seen in decades. And so the inverse is the case, right? If you're sitting on a digital, you know, on a dollar asset and you know you can go and get five and a quarter percent, somewhere else, if you are a customer who has access to the U.S. banking system and the Tradfai system, you're going to do that. It's just like obvious. And in fact, I have a chart. Maybe I can send it for your show notes. But it basically, if you look at effectively like stable coin supply where it was in April of 2022, which is when the first rate hike happened and then rate hikes, they're like directly inversely correlated. But we're actually in this funny position where Coinbase and Circle have great banking, relatively speaking, and we actually provide a way to

redeem one for one at no cost into banks. And so we have the Tradfai layer. And that's like part of why people love USDC and part of why they trust this product as well. But that also subjects to being kind of the off ramp as well. It's like it's harder to off ramp out of certain other products, but it's actually quite easy to off ramp through USDC. So we've had we've had that. as an impact. But I would say the broader impact is truly macro cyclical, which is in a high-rate environment, yes, we're generating significant amounts of revenue. And we just publicly disclosed our full year last year and our first half revenue and income and EBITDA. And, you know, it's very significant. So despite our circulation issues, like we're seeing very high year-over-year

growth and cash flow as well. But it is this macro cyclical piece. And so I think I'm taking a long-term view on this, which is build the best infrastructure, build the most compliant, regulated infrastructure, build the best banking infrastructure, the most transparency, do things the right way, make it work, make it work for any company, any fintech, any FI, make that work, build great things for developers. And like the rest will follow. And Like, well, the macro cyclical piece is going to be there as interest rates come down. You know, you get to a neutral interest rate environment. And then the kind of what people do with their dollars starts to shift.

It's worth noting, like, since interest rates started going up, banks have lost a trillion dollars of deposits. You can look at the chart. That's this Federal Reserve data, the Fred database. You can look it up from April of last year to now. Banks have lost a trillion dollars. of deposits. Money market funds have gained about $800 billion. And so, like, it's the same phenomenon that's at work there as well. Yeah. So in a moment, we're going to look at how regulation

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Propel your project and community forward by visiting Arbitrum.io today. Back to my conversation with Jeremy. PayPal recently introduced a stable coin, and they are a behemoth in terms of payments. How does Circle and tend to compete there? I'll say a few things. I think, first of all, you know, as the day they launched, I was, I think, quite complimentary and congratulatory to PayPal and Paxos, because it's a good, it's a good partnership for Paxos. And I think it's wonderful to see a major mainstream payment company embrace dollar stablecoins. And so we're excited about that just from the perspective of, you know, I think this is a very clear indicator that there's enough regulatory clarity in the world around stable coins. that major companies are getting into this market.

And as regulation comes into place, that's exactly what you want to see. You want to see an open, free, competitive market. And as that regulation becomes available, there's a baseline of safety that's there as well for the market that everyone can depend on. And you'll see, yeah, you'll see a lot more competition. So we fully expect to see more competition, not less competition, not just in the U.S. but around the world because stablecoin laws are dropping everywhere. But first of all, I think that's just from an overall perspective of positive thing.

Now, in terms of how do we compete, I focus less on sort of the competitor and more on what are the things that we do that we think are really valuable and important that people will depend on. And I think part of what has made USDC so successful is that we're a kind of market-neutral infrastructure company, right? We're not competing for merchants. We're not competing for retail users. We don't have a consumer wallet. We are purely a market neutral infrastructure company. And we think about USDC as like a dollar utility for the internet. And we want to work with, you know, tons of different companies to build on top of that. And I think that makes us unique. I think, you know, PayPal has a lot of great partners as well, but they have, you know, a franchise.

They have a franchise, you know, charging, you know, fees to merchants to collect payments using credit cards. And they have a franchise of end users. And so, you know, there are lots of people who, you know, would view that as competitive. And, you know, we've been able to build great partnerships with lots of firms who might view each other as competitive, right? Robin Hood and Coinbase probably look at each other as competitive. We have a partnership with Block.

We have a partnership with Stripe. We have partnerships with Visa and MasterC, with MoneyGram, with a lot of different firms that are depending on and using USDC in different ways. And it's, I think, our market neutral position that is really important. So I think that's going to continue to be important as this grows. And what's exciting to me, when I look at where we were a few years ago, compared to where we are now, it's obviously enormously different. But even just like 12 months ago, the range of mainstream companies that are engaging on this

and who are working on things with USC, it's totally night and day. And so I'm really excited. I'm really excited as we launch partnerships in the coming quarters because, you know, we're just sort of seeing, like the Mercado Libre example is just, it's a great one. And that's like, that's a company with 200 million. PayPal has a however 100 million. Coinbase, a great partner bar says 100 million. USDC supported in the finance wallet. They have 100 million users, right?

So there's, you know, we have reach and we're continuing to add great, great partners that have reach. And that's what's important. How, what's the reach that's there? And then our strategy is really different. Like we're building developer platforms. We're building infrastructure platforms. we're building protocol layers. And that's how we want to grow this.

And so we feel good about our position. We think we can continue to be a very meaningful part of the market. But we welcome the competition as well. All right. Let's finally turn to regulation in late July, a stable coin bill that many had anticipated would receive bipartisan support, instead moved out of committee in the House,

supported only by Republicans. Around that time, you made some remarks to the House Financial Services Committee on ways that you thought this bill could be improved. Before we get to your specific suggestions, tell us what you like about the bill. So, I mean, I think a couple things. First is, you know, the bill did move out a committee with bipartisan support. It wasn't broad-based. It was definitely with bipartisan support, but not, you know, it didn't have ranking member waters on board, right? there were, you know, five Democrats that voted alongside the Republicans.

Oh, right. Yes. I think the bill accomplishes a lot. And, you know, my view, I'm very up close to the issues here and very up close to the politics here as well, which is that what's really interesting is that this is a piece of legislation that everyone wants to get done. The Fed wants it, Treasury wants it, Congress wants it, the White House wants it. It's a priority that has been set by the highest levels of the administration that we need to have dollar stable coin regulation in the United States. So it is a national priority and people are working hard to get that done.

And the U.S., just to remind people, the U.S. led the way globally to go to the G20 and say everyone here, everybody at this table, all of you guys and gals, all of you nations have the table, you need to have stablecoin regulation in place. And they all agreed, we're all going to put stablecoin regulation in place. They agreed on the principles of it. And then they went off for their governments to say, okay, let's go get it done. Hong Kong's getting it done. Singapore is getting it done. Japan's already got it done. The EU's already got it done. The UK is about to get it done. It's getting done. So people are doing what they said they do. The U.S. has a little bit of a longer legislative process, but everyone wants to get it done,

which is great. So the probability of there being stablecoin regulation is high. The specific bill that came out of committee, I don't think is the bill that will be signed into law because there are key things that are still important to the administration and to the Fed that just haven't quite been resolved. And so a lot of this has to do with how much of a role does the Federal Reserve play in not just setting the standards. So right now the bill that went out of committee, basically the Fed sets the floor.

They say, here's all of the requirements. And they define that. But I think there's a debate over like, does the Fed get to veto who gets a stable coin license? Or does the Fed have any specific supervision if it's a state, like New York State, issues a stablecoin charter to someone. Does the Fed have any joint or dual supervisory role? It's kind of technocratic, but it's actually really important stuff that has to do with states' rights and federal rights and the balance of power and the like. But it's like down to those kinds of issues. But overall, what I like about it, to get back to your question is it creates a

clear pathway for bank and non-bank stablecoin issuers. It creates a role for the states and the federal government. It sets a very clear and very high bar on the prudential supervisory requirements. It's very specific about reserves, transparency, risk management, like all the things that are needed. And it effectively creates legal certainty that a dollar stable coin is a part of the global financial system. It is a part of the U.S. dollar financial system, which will mean that accountants know how to deal with this, whether you're a public company or a private company, that financial institutions would hold it just like cash or collateral. And so it will unlock massive mainstream usage of this as that happens. So there's a lot to like

about it. And I think, you know, it would be interesting to see, you know, we're just getting back into the congressional session. It'll be interesting to see. how this moves in the Senate and as well through the House. But we remain optimistic that the United States is going to ultimately do the right thing and preserve and protect the interest of the dollar on the Internet. And as I've said many times, the future of currency competition is technological competition and it's technology on the Internet that is driving that. And it's a question of, are you going to unleash open networks, free market competition,

private sector innovation, private sector technical innovation, which is what the United States has historically done to compete. And that's why the American internet and technology universe is so strong. And they have to make that choice. Do you want to compete that way or follow, you know, the way of authoritarian regimes that are trying to build monopolistic systems over money? Yeah, one thing that I noticed, you know, amongst your suggestions that especially peaked my interest was you made the request to revise the bill so that stable coin issuers be allowed to access federal reserve account services. And I'm sure your experience with SVB informed that request. What's the reception been like to this idea? So actually for years, well prior to the most recent banking crisis and really a fundamental premise of the company. when we founded it 10 years ago is that we need to move to a full reserve banking system.

And I think that's sort of implicit in some of the economic philosophy that undergirds, even things like Bitcoin, like Austrian economic philosophy is sort of you can't, you know, the sort of full reserve, you can't, you can't fractionally reserve Bitcoin. I mean, you could do it like, you know, maybe Sam Bankman-Fried did it. Yeah, no, nobody do that, please. If you have a database and you're telling people you have an IOU and you, you, you, you could do that. But at a physical level, right, Bitcoin can't be fractionally reserved, right? And so the, but the idea of a full reserve banking system is something that I've been passionate about for a very long time. And,

and there's a similar economic philosophy that emerged after the Great Depression. When bank failures cascaded across the United States, there was a big debate about, well, how do you deal with this? These banks that were all going under. And there were two options that were very seriously discussed. One is called the Chicago Plan, and that was a group of prominent economists, Irving Fisher out of Chicago School, but many, many others that basically said, we need to have a separation between the payment utility of money and lending. And we need to have full reserve money. And so it's still sovereign money, meaning it's still like a government obligation, but it's fully reserved. And banks can't create money themselves. They can't fractionally reserve.

They can lend, but only with money that's fully reserved. And that was a big argument that, and the argument was that that would result in a safer financial system where there's less inherent risk and less tendency to boom and bust and would likely lead to fewer recessions. Well, there was another view, which was actually the view of the banks, which was, no, no, no, no, we want to be able to do fractional reserve, but let's just create an insurance pool. and we'll have an insurance pool, and the insurance pool will basically, we'll all chip in insurance, and if one of us fails, then we can draw on their insurance and pay for the failures.

But we get to do this risk-taking stuff. And that was the formation of the Federal Deposit Insurance Corporation, the FDIC. So I think commercial interest won out then, and that's been revisited over and over throughout time when the savings and loan crisis happened in the 1980s, again, after the financial crisis after 2008. That's when I took a real interest in all of this. This is what got me into crypto was how does this fractional reserve banking system really work? What does central bank money? How can we improve on this? That's what got me in all of this before I even knew about Bitcoin.

It was sort of I was interested in all this. I've always wanted there to be a model for full reserve dollars. And I believe that if you have the technological superpowers of blockchains and the internet and you have this incredible programmable money that moves at the velocity and speed and efficiency of the internet, that the ideal underlying basis for that should be a full reserve money and that it should either be in, like, it should be government obligation money. So it should be either like cash held at the Fed or, you know, kind of short term government obligations like treasury bills. And that if you had that, then everyone would know this is as

close to cash as possible. This is like the safest thing as possible. And they'd be willing to use it very, very broadly as a medium of exchange. And that's really what we strive to. And we're really close to that. The only thing is right now the cash piece of what we have, we have to hold it in commercial banks. And I've always been nervous about that. And that turned out to be something to be nervous about. And so now, you know, we are fortunate in that we're holding the cash almost entirely with, you know, one of the very safest globally, systemically important banks in the world, which means it kind of has a government backstop behind it. So we have still a very safe place. But I do think the proper design on digital dollars and private sector intermediated digital

dollars, which is what we're talking about here, is something where you can take advantage of that central bank facility. But are you seeing that people on Capitol Hill agree that that would be a good step in something to put in this bill? I don't think we're going to see that in this bill. I think the bank lobby is quite seriously opposed to it. And so I don't think we'll see that in this bill. I think, you know, the reserve requirements in terms of the assets, I think, go a long way to ensuring that the reserve assets can be extraordinarily safe. And you can kind of get to like 98% of the safety that you'd have. And so that may be, you know, a fight for another day.

Another suggestion you made was for the bill to define what would be a legitimate U.S. dollar stable coin versus what you called counterfeit ones. And honestly, some of your comments earlier where it felt like you were throwing shade at tether without naming them, maybe what you were thinking about when you were talking about these, quote, quote, counterfeit dollars. So how do you think this, like, legitimate U.S. dollar stable coin? What definition would you like to see there? Well, I mean, I think if, you know, to quote and literally quote Jay Powell, the chairman of the Federal Reserve, is like, you know,

his view is that stable coins are dollar money creation. And that is the responsibility of the federal government to define what is legitimate dollar money creation. What is actually considered a dollar instrument in the global financial. system. And I think, you know, in particular, if it's something that is determined to be equivalent to cash, that from an accounting perspective, from a balance sheet perspective, that everyone understands that way, there ought to be a very, very high bar. And if you're out there saying you're a dollar and you're not meeting the standards and requirements of the law to be a digital dollar, then you shouldn't be able to be out there parading as one. And so,

So that's what I think more or less the view. And so my own view is that there need to be consistent prudential standards for these fiat stable coins around the world. And I think you're seeing that. You're seeing that it's basically the central banks in all of these major G20 jurisdictions. They're basically all coming to the same conclusion. And the law is basically quite similar in all these places. And so I think over time, we will certainly be in a world where if you're, if you're offering a digital currency, a fiat digital currency, right, you're going to have to be under this kind of robust regulatory regime or you're not, you're not going to be able to be used. So, I mean, I think that that's sort of the direction of travel that's happening right now.

And it will take, you know, it'll take two or three years to play out, but it seems pretty clear. So as you've alluded to earlier in the conversation, there are all these discussions happening around the world. And they're different in different places, partially, you know, an analogy similar to what we saw with, like, for instance, Blockbuster or what, you know, many of these previous, like Kodak, like there's all these previous companies we've seen with the Internet that just, they were the dominant, you know, force in that industry. and because the upstarts had more motivation to find use in this new technology, they were able to take them out and pretty quickly, frankly. Unfortunately, I hate to say it because I know a lot of lawmakers and regulators listen to the show, but sometimes when I'm covering this face, I feel like the same thing is happening with the U.S. government and the U.S. dollar.

Hopefully I'm wrong about that. But, you know, obviously you are interfacing with these different jurisdictions. and one probably really notable country that has focused on blockchain technology and on central bank digital currency is China. They've rolled out its digital yuan fairly quickly. And I just wondered what your thoughts were as you're seeing the contrast between these two governments and how they approach stable coins and central bank digital currencies. I think China does not have a specific regulatory position on stable coins. So that that, that, that, that is still, they have not, they're not, to my knowledge, working on specific new rules for

stable coin issuers in China. However, I wouldn't be surprised to see that happen. I think that, you know, if you look at the state of play, the priority in most jurisdictions from the government is get stablecoin regulations in place as quickly as possible. And so, you know, stablecoin rules for Euro stablecoins are becoming model law. And that will be years before there's a digital euro from the ECB. Stablecoin rules in Japan have been effective since this June. And that'll be, you know, it's not even clear that they'll ever be a CBDC in Japan. And so the priority, including in the United States, I mean, the Fed has made it clear.

We are not working on a CBDC. And so the priority is there is private sector digital currency initiatives. There needs to be safeguards and rules. And there needs to be a fair market for competition with technology, innovators, banks, non-banks, et cetera. And that's the priority because that is the here and now. And so I think as that happens, as every major jurisdiction in the world is supervising private sector innovation in the space, I think China will have no choice other than to also unleash their own

creative, technological, competitive capabilities. Now, it may be that an R&B stable coin that's privately intermediated could actually be a more attractive instrument to businesses and others around the world than the actual CBDC because you kind of want to air gap between you and and the Chinese government. And so I think, you know, that's a real question. You know, I think does a big corporation that's settling transactions cross border with China, do they want the government's systems

reaching into their own technology environment? Probably not. And so private intermediation, it could be backed by a central bank digital currency. And that's kind of where I think over very long run in the United States will see. We'll see upgrades to the wholesale kind of core technology infrastructure of the central bank. And then private intermediation will integrate to that. But it'll principally be kind of stable coins and the kind of rapid, constant innovation cycle that

comes with open infrastructure and technology innovation. That will kind of be what is quote unquote retail, what's touching businesses and end users directly. And I think my own belief is that something like that will probably emerge for China as well in the future. And do you think that in the U.S., those developments will happen quickly enough that the global reserve currency status of the U.S. dollar will remain in place? Well, I think the U.S. needs to be aggressively taking action right now. And unleashing competitive digital dollars on the internet is one of the best things that the U.S. could be doing right now. And I certainly have made that case in testimony, and I make that case in person to a lot of people in Washington. But it's a very clear thing that can be done because then it's about, you know, you're fighting for the hearts and minds of users in the world, businesses, households, others that are making decisions as they talk.

turn on their computer or their smartphone. And I think the United States, I think the dollar remains the most resilient, most attractive reserve currency in the world. It remains the safest asset in the world. And I think that can certainly continue if the United States is willing to, you know, kind of get behind some of these transformations that are needed in the safety of the dollar and the technological competitiveness of the dollar. So aside from the suggestions that you made to the House bill on stable coins earlier,

are there any aspects of regulation, stable coin regulation from other jurisdictions that you would like to see adopted in the U.S.? Well, so there are what I'm seeing in some places are proposals to have stablecoin issuers have direct access to central bank clearing facilities. So, for example, I think that would be, as I've already recommended in the U.S., I think that would be a positive, you know, a positive step. I think, you know, one of the things that you're seeing as well is, and this is very new, you know, there are provisions in Japan, for example, that are dealing with effectively

various forms of reciprocity with kind of foreign issued stable coins. And I think that's really important as well, is that we can get to kind of like-for-like treatment. so that if I'm a business or I'm in the capital markets in Japan, that the regulators in Japan will acknowledge something like USDC as an instrument in their markets so long as there's regulatory equivalence in terms of the various safeguards that need to be in place. So I think that's something that we're seeing initial ideas around from other jurisdictions. That's not explicitly addressed in the U.S. Stablecoin legislation right now.

now. And it's a hard issue, but it will, and there'll be iteration around this, but, you know, ultimately, because these are digital assets that this move on the internet and can show up in any digital wallet, it's just, you know, where are the private keys, who has them? You know, I think the cross-jurisdictional issues are, are one, is an issue that that has to be, you know, considered. And I'd like to see that considered more here in the U.S. You've tweeted that crypto has the tools to unlock better KYC or know your customer processes for dealing with things like anti-money laundering. What did you mean by that?

Yeah, I mean, take as an example, what was it? There was just a huge breach of every, you know, the company that was involved in in safeguarding the customer information associated with the, I don't know if it was the FTX bankruptcy, or the Block 5 bankruptcy, that was compromised, and all the KIC information was sort of made available publicly, right? Well, how does that happen? Well, right now, if you're a financial institution, the way that the AML rules work and the way that the KYC rules work

is that if you're interacting, you, the financial institution, are interacting with another financial institution, you actually have to exchange the personal information of your customers, whether it's a person or a business. You have to exchange that information. So all of these different financial institutions, whether they're a startup fintech or a giant bank

or a broker-dealer or any market participant, you have this vast amounts of proliferation of your personal information. And so your PII is being broadcast over and over and over, and it's basically showing up in these honeypots everywhere. And so, yes, there are, like, you know, SOC standards and security standards and safeguarding standards. But at the end of the day, you as a person are having your personal information just blasted out everywhere. Well,

crypto is, I mean, obviously like crypto is a loaded word, but it's cryptography. And there's like innovations in cryptography that are constantly happening that allow for proofs without actually having to share the information. So zero knowledge proofs are like the most, commonly referred to a way to do that. But there's other types of cryptographic proofs where you can have a proof that shows up as like a certificate. It's a provable certificate that is it like a credential. That credential then can be shown to someone and that relying party can say, oh, you have a KYC credential. And that KYC credential was issued by like a legitimate firm that has compliance with certain rigorous standards of knowing who their users are.

And I'm able to rely on that. And I don't need you to give me all the person's information. And so there's a way to basically make using cryptographic proofs, using digital credentials, these cryptographic credentials, to allow people to more safely interact without giving up their private information. And it allows for things like selective disclosure as well, which is, you know, the most common example being, you know, if if my daughter walks into a bar, why is it that she has to legally give the bartender her address and her name? Like, why? That doesn't make any sense, right?

So why can't we just prove that we're of age? Why can't we present a credential from a digital wallet that proves that I'm of a certain age? And I've biometrically proven that I'm actually the holder of that. And so all this is crypto, right? Crypto. And so I'm really excited about basically various types of the use of cryptographic credentials, NFTs, zero knowledge proofs, this whole kind of collection of technologies that are totally becoming mainstream or have the potential to become mainstream. We can do a better job at proving identity without giving up our privacy. So we can have privacy preservation and proof of identity.

and we can even have ways the financial institutions can exchange proofs without having to create these huge honeypots as well. So that will require that, say, the U.S. Treasury Department that sets the rules for, you know, kind of any money laundering policy for financial institutions or the global body, the financial action task force, FATIF that sets the standards for like what they require. You know, it's sort of consortium of all the governments decide. You do need to say, yeah, we want to enable safer, privacy preserving, but still very rock-solid, you know, identity checks. And so there's a way to do it and leverage crypto to solve those problems. All right. Well, final question. You have made a number of points throughout the show about, you know, what you'd like to see from U.S. regulation.

But I just thought I would, you know, give you one last opportunity if there's any message, specifically that you'd like to send to regulators and lawmakers, what would that be? Look, I think there's a couple things. I think I will, I'll be a little bit of a broken record on the stable coin issue, which is just that we have a moment. It's a here and now moment. There's a dollar competitiveness issue. There's a national competitiveness issue. There's a industry and market competitiveness issue. And while it's very easy to look at the people who've committed frauds or the or the companies that have run. Ponzi schemes or the people who've been bad actors and say it's all crap, that is just not the

case. And so we're right, we're right on the cusp of, I think, a very strong framework that would be very powerful for the, for the US, the US dollar, for industry, competitiveness, etc. So that I feel strongly about. The other thing I would say is that there really tends to be, and this isn't just in the United States, but it's everywhere in the world. blockchain technology is colored through the lens as a financial technology. And I think it's really important that policymakers understand that we're talking about general purpose internet infrastructure, general purpose internet computing infrastructure, data infrastructure.

It's a really, really important general purpose infrastructure that's important to a huge array of industries and categories. And so how we treat that infrastructure, it needs to be independent of just saying this is a financial regulatory matter, because it's actually not. It's really about a next layer of the internet and getting that right. And so I find sometimes that the policies that are being considered are kind of, they're stovepiping everything or they're kind of marshalling everything into a financial regulatory lens, that is not a good position. I don't think it's accurate. And so I think it really just requires, you know, more and more understanding. And so I would encourage policymakers and their staff to

really get a better understanding of, let's just call it the computer science of this network technology and what that is. Because that's really where, you know, someone value will come and it's not just because someone's got an airdropped token or whatever the thing that that people you know find you know problematic is all right well jeremy this has been such a pleasure um where can people learn more about you and your work yeah sure well um me personally i'm jr allaire on twitter and circle dot com if you want to learn about what we do at circle Perfect. It's been a pleasure having you on Unchained. Thank you, Laura.

Thanks so much for joining us today. To learn more about Jeremy and the latest developments on USDC and Circle, check out the show notes for this episode. Unchained is produced by me, Laura Shin, with off from Kevin Fuchs, Matt Pilchard, Juan Oranovich, Sam Shreehan, Megan Gavis, Jenny Hogan, Leandro Camino, Shoshank, and Marka Curia. Thanks for listening. Unchained is now a part of the Coin Desk Podcast Network. For the latest in digital assets, check out markets daily seven days a week with new host, Noel Acheson. Follow the Coin Desk Podcast Network for some of the best shows in crypto.