The State of the USDC Economy (Breakpoint 2024)

0:00Hey, everyone. As you know, Solana is one of the ecosystems I'm the most interested in. I've been incredibly bullish. I love to see the vibrancy of what is happening in the space. Unfortunately, I couldn't make Breakpoint this year, but the stories have been amazing. I heard the talks are incredible, and we're really proud of Real Vision to give you talks from Solana Breakpoint 2024 in Singapore. I really hope you enjoy them.

0:37Good afternoon. It's awesome to be here. I'm going to talk a little bit about the state of the USDC economy, which is strong, and it's very strong in the Solana ecosystem. Super excited to be here with the community. USDC has scaled enormously in the past six years since we launched it. Since we launched back in 2018, we've seen over$16.2 trillion of transactions happening, And that number is accelerating, and it's accelerating in a significant part because of the incredible adoption on the Solana ecosystem. At a high level, we're scaling on a bunch of fronts. First, we're scaling in terms of the infrastructure that USDC runs on, on 15 chains, and connecting those chains together in a seamless way through CCTP, which has already done about$13 billion of volume.

1:34As you know, USDC is available as a protocol, as a digital currency all around the world, and has grown significantly in the past 12 months. USDC in the Solana ecosystem is doing phenomenally well. If you look at that cumulative volume from 2023 to 2024, in 2023, cumulative volume of about$600 billion in USDC transactions. in 2024 so far already doing nearly eight trillion dollars in on-chain transactions in the Solana ecosystem which is astounding. Obviously available in all the places that you can connect to the blockchain and that just the sheer number of transactions that are happening through all of the different projects and protocols that are using this today has grown you know quite significantly as well.

2:30I want to just touch for a minute on CCTP. CCTP has been a huge innovation in enabling cross-chain liquidity, enabling people who are coming on chain through one ecosystem to move seamlessly across those ecosystems. And that's been a huge success. And I know a lot of developers here depend upon some of the other projects that have integrated this in seamless ways on Solana, and we're seeing more and more adoption. But that growth has been incredible. If you look at the numbers today, about 85%, almost 85 % of USDC that moves between chains is now moving over CCTP. And what that means is that these digital dollars can move safely, efficiently, securely, without any capital inefficiency and with the greatest security possible because of what we've been able to build.

3:25We're doing more with this. We're going to have new versions of this coming out, which developers will be able to take advantage of, and that ultimately are going to enable USDC to move extremely fast across all these different ecosystems. Again, so if you're building applications that need digital dollars and users are coming from different ecosystems, you'll be able to do it, whether it's a payment application where someone might be using a Coinbase wallet, using base and paying someone on a Solana wallet, you know, that is using USDC to enable that abstraction so that users don't have to know exactly what's happening underneath.

4:02And the other applications that are coming, like cross-chain margining, cross-chain DeFi, other things like that are going to be increasingly made possible using innovations that we're introducing in CCTP itself. I want to touch on an update on how to think about the safety and transparency and liquidity of USDC as well. We've invested massively over the last year to continue to improve the fundamental security and liquidity of USDC. On the left is a snapshot of the balance sheet of USDC. And what's really critical about this is that today, you can see there's a piece of this that is in cash. That cash is almost entirely held in several global systemically important banks.

4:53Banks that are too big to fail and that have the effective backstop of the government. So effectively the safest forms of commercial bank cash that you can hold. And the remainder is in what is called the Circle Reserve Fund. That is issued by BlackRock. It is an SEC registered and supervised structure that is available to Circle where we hold around 90 % of the USDC reserves. And those are held exclusively in treasuries and treasury repos. And what's powerful about this is that if you go on the internet and you search USDXX, you can actually go and look inside the Circle reserve and see every single instrument, every single T-bill, every single, all of the dates and liquidity.

5:36And so you have the most transparent digital dollar in the world. And we believe through this level of transparency, we're building one of the most transparent financial institutions in the world. We don't just take our word for it. A lot of companies in this industry say they can't get big four auditors. Big four auditors won't audit companies in this industry. That is just wrong. Deloitte & Touche is our auditor. at a corporate level and provides assurance as to these reserves on a consistent basis. When we think about what we're building, so that's the state of the USDC asset, and so you can feel comfortable building on this.

6:20But as a company, we think about what we're building as building a general purpose platform and network utility. It is a utility that allows any person, any developer, any application to use digital dollars anywhere in the world. And that network and that network utility is based on, at the core, the infrastructure that we provide in our platform. The open source infrastructure, our public protocols, CCTV, new public protocols that we're going to be launching. Also, all of the actual financial infrastructure we provide to ensure that we have the liquidity and availability in banking systems all around the world.

7:03Today, USDC can be created and redeemed natively, directly, in the U.S. banking system 24-7, in the European banking system also 24-7, in the Singapore banking system, the Hong Kong banking system. And just this week, we announced availability of direct liquidity in the Brazilian banking system with 24-7 integration, and in Mexico as well. We are expanding this liquidity network around the world. So that's at the core, this platform that we have. But today, we're just incredibly grateful to the thousands of companies that build products and services on top of this consumer facing, business facing, market facing.

7:42And so this partner ecosystem, which continues to grow and is thriving, is building value together with us. It's building value that then faces users and institutions all around the world. And that, in turn, builds a network that delivers utility that reinforces itself. This platform utility, the more people, the more institutions, the more developers that build on this, the more valuable this becomes for all of us because it creates more and more utility that we can tap into. So we have a lot we're building in this front, which we'll be excited to share as we go forward. Everyone talks about stablecoins and stablecoin use cases.

8:23It's been amazing to see, and a lot of the exciting projects are emerging also in the Solana ecosystem. As we just heard, the Biddle Fund is a great example of that that enables USDC interoperability with the traditional asset. That's like the capital markets use case with BlackRock and Securitize. But we're moving from a world where, you know, stable coins were really originally built in this digital asset trading space into a world where they're being used in consumer payments. They're being used in traditional capital markets that are coming on chain. And they're being increasingly used on a global basis to move value for households, for corporations.

9:02It's incredible being here in Asia, just talking to the number of people who are working with companies that are moving value between companies using stablecoins as really a next-generation model for how value moves in the world. Now, there's a lot of use cases that are expanding. One of the things that we're excited about is the infrastructure improvements that are actually happening in the Solana ecosystem. And I'm really excited, actually, to be able to bring up Lucas from Gito and talk about a major launch that we're excited about that's happening involving USDC and the restaking, liquid restaking ecosystem.

9:42So please welcome Lucas from Gito. All right. How you doing? Good. Awesome. I see all those numbers and charts going. We like the direction. So yeah, today we're excited to announce that Renzo will be launching EZUSDC using Jita restaking. Super excited. I think USDC is a great asset. We're going to see a lot of stablecoin adoption in restaking. You don't really have to worry about the security dropping and volatility in the asset. So super excited to see that and all the networks that are going to launch and use USDC. It's awesome. Congratulations. All right. So this is super cool, right? Right.

10:30USDC can be a liquid restaking asset and that can help secure all of these new networks that are launching and building up on the Solana ecosystem. So it's a huge step forward in the utility of USDC in the core security of how this broader ecosystem is going to be built.

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11:48As we think about the future of the internet financial system, we have a traditional legacy financial system, but we're all together building this future internet financial system, and it's being built on-chain. And I've met with a number of, you know, lots and lots of projects that are here today that are doing pieces of this today. They're building on-chain payments. They're building on-chain FX using multiple stablecoins. You know, projects like squads and others building on-chain treasury management. On-chain credit, I believe, is also going to be a critical piece of what takes place where actual credit intermediation moves to happen entirely underwritten through pools on chain.

12:30And over time, we expect corporations as a whole to move more and more of all of the facets of what they do, not just in finance, but in commerce and in governance. We have a long-term vision to see all of this built out. But I want to drill in on one thing here that we're super excited about, which is on-chain AI agents. Today, if you think about the internet, it's fundamentally being rewired with progress in AI. We're all using that and seeing that constantly, but there's tons of friction that exists. Over 80 % of the web's content is behind paywalls, and most apps that you want to interact with require you to register and use them.

13:11We believe we're going to see, and we're beginning to see a rewiring of that in a world where blockchain networks and AI can connect and unlock use of all this knowledge, use of all this information, and facilitating more and more seamless transactions behind the scenes, doing work for you and doing work amongst those AI agents themselves. So what if we could do a world where AIs can programmatically interact with micropayments down to the cent? What kind of blockchain could support that today? Come on. Solana. All right. So we're envisioning and working towards with our programmable wallets infrastructure, SDKs and other things that are going to enable a better way to search and pay for information.

13:59I want to know what the future of electric cars is. I want to enable my AI agent to be able to make microcent, microtransactions across these paid content sources to give me the best information possible. I want a faster, easier way to book a trip to Singapore. I want to tell it what I want, and then I want it to be able to go out and give me the answers for what's possible, and I want to be able to have those AIs doing work on my behalf and paying pennies for the basic work and the basic tasks that they're doing. I want to build an app. I want to ask an AI to produce something for me. I want to give it a prompt.

14:41I want it to come back and use Replit to actually generate that app in seconds, and I want to compensate that AI agent for producing that specific interactive utility that I need to conduct my work. This is all possible to do today, and you're going to see more and more from Circle in this area as we pursue a world of AI agents that are interacting and mediating commerce, transactions, finance, and other things on the internet. Programmable wallets, which are available on Solana, gives the wallet infrastructure that's necessary for websites to be able to handle transactions in stablecoins and put those behind APIs that AI agents can consume.

15:25The infrastructure, that software that's spun up by AI agents to make those transactions happen. And then obviously USDC itself, as this critical infrastructure, and critically, the velocity of transactions, the scale of transactions, and the cost efficiency of those transactions has to happen on high throughput, highly scalable, highly cost-efficient internet infrastructure. And that's exactly what Solana is doing. Obviously, there's other ecosystems that are trying to address this problem, but we're obviously very, very impressed and what we've seen from and heard from with Fire Dancer is extraordinary.

16:04We envision a world where there are the explosion in transaction velocity that happens when the cost of moving value is effectively zero and the explosion of software and interaction that's going to take place through mediation with AI agents is extraordinary. And that's coming into focus even in the next year. The proliferation of agentic applications is coming in a meaningful way, and we need this kind of infrastructure together to do this. So USDC has done incredibly well in the last six years. Solana is a huge part of its success, and I'm grateful to everyone here that works with USDC and builds out this network and creates more utility for all of us.

16:49And I'm incredibly excited about more partnerships in this ecosystem and seeing what becomes possible when this extraordinary infrastructure combines with the kind of infrastructure circles building to build a very different future for the internet. Thank you.

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