The Rise of Stablecoins with Circle’s Jeremy Allaire | E2004

0:00We have a vision for what an internet financial system can look like. We have a vision for what open, programmable, composable money can bring to the world and the innovation of that and the open Internet and what that makes possible. And we want to make sure that that can come to life and not be stifled. And that does require policymakers and governments to actually create more degrees of freedom for innovation to happen, as has happened in other major areas of the Internet. this week in startups is brought to you by linkedin jobs a business is only as strong as its people and every hire matters go to linkedin.com twist to post your first job for free terms and conditions apply google cloud accelerate your startup journey with the google for startups cloud program get up to 200k in google cloud credits or up to 350k for ai startups plus training and guidance.

0:57Apply at startups.google.com slash twist. And Beehive. Power your newsletters with AI tools, referral programs, and ad network features all in one platform. Get 30 days free and 20 % off your first three months at beehive.com slash twist. Welcome back to This Week in Startups. My name is Alex. I'm Alex over on X or Twitter, if you want to call it that. Today, we have a very special guest, one that I've been looking forward to talking to for some time. Now, I've been covering crypto since 2013, 2014, somewhere in there, back when Bitcoin was either double or triple digits, if you want to know how far back that was.

1:40And a question that has always come up is what will be the killer use case for crypto? Some people said store value, some people really leaned into trading. I think that the union of those two things is the real thing that crypto is going to unlock for the world, and that is stablecoins. So today on the podcast, we have Jeremy Allaire back. Jeremy is the co-founder, CEO, and chairman of Circle. Jeremy, hey, welcome back to the show. Thank you, Alex. It's awesome to be here. Excited for the conversation. Yeah. So before the show, we were talking about the ancient past, the 90s, if you will, and the era of the internet that brought us into the 2000s.

2:16you founded a company called a layer that made cold fusion tell us about how you took that company and ended up the cto of macro media yeah absolutely so just yeah going way back in time um just even before i founded that company i got involved in the internet in 1990 and the thing that got me interested in this was i experienced firsthand the sort of power of open networks distributed and decentralized networks open protocols open source software this is sort of what i like to refer to as like the dna of the internet and um i experienced that as i was looking at you know what was happening with the collapse of the soviet union i was sort of studying that and i i basically you know i went very deep on technology and became convinced that like this would be transformative to the world and then in 1994 as the very first like graphical web browser technology emerged, it became really clear, like, okay, we now have like a piece of software that you could render content and applications and other things into, which led to this concept of sort of the web as an application platform.

3:24And so, with my brother and others, we co-founded a lair, which built, as you noted, ColdFusion. And ColdFusion came out in January of 1995. And it was the first commercial web programming language. There were some things like Perl, if you remember pearl um uh and like yeah and and people would write c code behind web servers to like make things in dynamic in web browsers but cold fusion really made it easy and accessible to anyone who had an idea and like a thousand dollars to build an interactive application you can deliver through a browser and that was a really big concept in 1995 and that like took off and we rode the whole wave of of people building websites e-commerce to bring content online um we had literally uh in the whole family of tools that we built out we had millions of developers using our software and then as uh as that market matured like we we took the company public in early 1999 um and we were unfashionable because we were profitable uh most companies going public in the dot-com era were not profitable at all but um uh it was it was it was it was good But we were kind of an armed supplier to the whole Internet 1.0 revolution.

4:35And then after we went public, we merged with Macromedia, which was also a huge provider of tools for building the Internet, building the web, building content, and so on. And I, yeah, I became the chief technology officer of that combined company and then helped pioneer the use of Flash, which we all probably remember as like a very powerful piece of software for doing deeper forms of media communications interactivity over the internet. And that was, yeah, that was back in 2001. So going back quite some time. I mean, we outgrew Flash, but I do think Flash gets a bad rap in retrospect. Like we used it for a really long time.

5:15Flash was great. until we, I don't know, had better stuff, but I feel like there's a lot of like, um, yeah. Monday morning quarterbacking about the demise of flash that I don't think is entirely fair. I know a lot about it. I know a lot about it. Yeah. So this is a little bit of a layup for you, but you know, given your conversation about the internet, open protocols, decentralization, um, what brought you from the end of your time in macro media to 2013 when you decided that, Hey, we need to found circle. We need to start working on the stable coin issue. Um, I presume that there's some ideological kind of like parallels between those two points yeah so i mean if you go back to sort of what brought me into the internet in the first place i was actually studying international political economy i was sort of looking at kind of comparative economic systems political systems i was very interested in sort of international economic systems stuff like that i got you know excited about the internet got excited about sort of the transformation of of these open networks and what that could do for information and and and information distribution and software distribution and that was sort of led there and then actually it was at macromedia where you know we back in you know it was 22 years ago we put a a seamless way to play video into flash player in march of 2022 or 2002 sorry um and and we basically made like video playback ubiquitous on the internet and we we kind of made it the for the first time it It was easy for anyone to put video into a browser.

6:45And that led to the development of YouTube, which exploded. That was all built on Flash Player video. And that also led me to found a company, Brightcove, which basically was taking, again, these fundamental DNA of the internet, open networks, open protocols, distributed systems. And my idea was, well, we could basically enable any company, any media company to directly distribute video and television on the internet. And back in 2004, we had just started getting broadband. We had just started getting Wi-Fi. We didn't really have mobile devices yet, but there were all this talk about connected devices.

7:23And it was very clear, like, okay, I can see how we're going to have all these connected devices. We're going to have Wi-Fi and mobile broadband, and that's going to unleash video in a way that wasn't possible. So, built up a kind of online television distribution system, online video platform. And that was kind of a continuation of sort of, okay, there's now new stuff you can do on the internet. It's richer. It's fuller. It's sort of more true to things people thought during the dot-com era would be possible, actually became possible in Web 2 when you had at least these sort of more technology proliferation that was better.

7:59And that was a very successful business and grew. And we IPO'd Brightcove in early 2012. So we sort of grew it to that point. And so here's sort of getting to the answer to the question, which is when the financial crisis hit in 2008 and 2009, that like significantly stimulated my earlier interests that were my earlier kind of academic interests. And I sort of became like an armchair political economist. And so I found myself reading a huge amount about the nature of money, central banking, the international monetary system, the nature of fractional reserve banking, like all this stuff. I became really interested because I was like, how did this happen?

8:47And is there a better way forward? Is there a better way to build the international monetary system? And, you know, it's not the kind of thing where, you know, you sort of wake up one day and say, I'm going to create a startup to, you know, transform the international monetary and economic system. It's not, you know, it's not a typical thing that you just decide to do. But so at that time, 2009, you know, 2010, like I didn't do that because there wasn't a clear path to do that. It was more just I'm interested in this. And then in 2012, actually, not long after I took Brightcove public, I came across crypto and went down the rabbit hole and got very excited about the technology.

9:30And I am a technologist. I'm a product guy. And I kind of looked at it from a technology first perspective. And I saw several things. I was like, wow, this is actually a technical breakthrough. There are problems. There are computer science problems that have been solved here that are really powerful. And the first time I synchronized the blockchain, the Bitcoin blockchain onto my laptop and was able to conduct a transaction using that directly over the internet, that was like the NCSA mosaic moment for me. It was like, oh my God, this direct infrastructure where you can safely and provably conduct a transaction directly with a counterparty over an open source protocol on the internet.

10:11It's like, wow, this is a breakthrough. This is a missing, it's a fundamental missing piece of the internet. and the more that my co-founder and i dug in the more that um and in particular into like the technical community there are a lot of people in the technical community of of crypto back then who were really jazzed about ideas like how could you use this tech to not just have bitcoin but issue other types of of now we call them digital assets or digital tokens on these networks and And I had built virtual machines and helped build programming languages and stuff in the past, as we just talked about.

10:50And so, there was discussion of how could you make these types of digital assets programmable? How could you have programmable money? How could you have smart contracts? And these were like ideas on napkins for a lot of people. There were a couple of white papers and stuff. But it was very clear that all those things would happen. And we could see very clearly how all those things would happen. We didn't know the exact timeframe, but we knew that those would happen. And when we looked at all that, and I kind of merged that with my thinking about like, how do you build a safer financial system?

11:23And how do you build a more open financial system? All this like converged. And I became basically, it's all I could think about, totally obsessed, and obviously decided to found Circle. and you know the the basic idea um and and it goes back to something we were talking about before we started the show the the basic idea was can we create like an http for money can we create a protocol for dollars on the internet that is open programmable etc that was the idea you know 10 11 years ago and and now we've done it like it's here and it's happening and as as you introduced right It's sort of killer app of crypto and it's really starting to take off.

12:03But it took a long time to build it. But now it's quite a significant scale, but yet still very early. Founders, I know that you're keeping a close eye on your burn rate. I am too. In today's venture market, every single hire you make has to be perfect, right? You can't make mistakes. You got to keep that runway as long as possible so that you can run more experiments. and you need talented people to run those experiments and figure out how you're going to get product market fit, how you're going to scale your company. And that's why you need to use LinkedIn jobs. As you know, LinkedIn brings you the candidates that you can't find anywhere else.

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13:09What? F-R-E-E? What a great price. LinkedIn.com slash twist. That's right. LinkedIn.com slash T-W-I-S-T to post your job for free. Terms and conditions, of course apply. So thinking about the moment that we saw Bitcoin reach the more broader technological consciousness, and then stable coins today, I see a bit of a gap between them. And I know this is perhaps me being an old fuddy-duddy, but when I think about Bitcoin, programmable money, and reforming the world's financial and economic systems, it seems a little strange that we've ended up at a place where the coolest and most hot thing on the blockchain is digital dollars and we'll get to it in a minute digital euros is there a tension between the desire for decentralization and more transparency and then stable coins having you know themselves tied to existing fiat currencies i think um you know my view and this has been the the sort of circle path since we started was this concept of a kind of hybrid system where if we want to move to a to a world where a huge percentage of the money that's stored like the stored value and where you know economic transactions and economic coordination um it all kinds of economic coordination not just payments but like more complex forms of contractual coordination where where more and more of these things are happening on the internet natively on chain as people like to say if we want to get to that world um we have to start from the world we have right and and we have you know the dollar is the strongest currency in the world the dollar uh and you can you can you can say hey the there's 34 trillion of debt and you know the u.s government could maybe like fall over paying its debts or it's overextended or it's you know take the ray dalio argument about these sort of these these long-running cycles and and are we in a decline cycle and that's legitimate discourse like i i firmly believe that's very legitimate discourse but like for from a here and now perspective most people in the world want a network that effectively gives them a a stable unit of account and gives them a powerful technologically and utility wise powerful medium of exchange and um and i think you know dollars themselves and digital dollars specifically are are really really a powerful and preferred medium and so that's a starting point and we need it rooted in like real dollars that's why the way we've designed usdc is sort of you know getting as close as we possibly can to like government obligation money um and you know kind of this fully reserved so people who hold are like wow okay this isn't as risky as a bank deposit this is like you know t-bills and like and and basically you know cash that's held with the safest custodians in the world and like that that's you know for the people who really drill in they can see wow this is this is ultra safe dollar money and it has all this utility on the internet and and that is highly useful um and and it is a hybrid world because we are you know circle is a centralized regulated entity um you know but um the the protocols of public blockchains are open network protocols the usdc protocol and and the cctp protocol these protocols these are open public permissionless protocols that developers can build on that end users can connect to.

16:48And there's these vast ecosystems of startups and enterprises and big companies that are connecting to these protocols in the same way that people connected to the HTTP. And so, you have this kind of hybrid model. You get the benefits of this public internet infrastructure, and you get the sort of reliability, certainty, compliance, legality of a digital dollar that's sort of anchored in its core in the existing dollar system. And then providing that interoperability layer so that, you know, you want that interoperability layer. A lot of people, you probably remember this, when like Skype came out, like it was like, wow, I can't believe it.

17:29I can have free phone calls on the internet. Amazing. Obviously, we use all kinds of stuff for that now. But like, you know, for a while, it was like really important that like you had interoperability. You could use like Skype out. If you remember, Skype out was like, I can use my Skype to like get on a regular, connect to the legacy phone system, right? Now, it's not quite the same analogy, but it's similar here in that you want interoperability. You want basically the ability to come on and off chain very, very seamlessly and easily all around the world. Yeah, I had in my notes, is Circle a TradFi company or a crypto company?

18:04I tried to answer that question while prepping for our chat today. And I ended up having no answer to it. So I'm glad you think that it's hybrid because that makes me feel better about not being able to put the company into one camp in particular uh i do want to go back just a little bit to the the point about um reserves and so forth i'd looked into the funds that you guys hold yeah um through your uh main uh black rock um yeah fund if you will reserve fund yep exactly uh by the way i do love that in the sec filings it's like who can purchase this not you just cervical kind of cool to have your own fun um but if you go through the reserves apart from just standard bank balances you guys do hold an an enormous amount of US federal debt.

18:46And when we think about the euro stablecoin, EURC, which has seen some pretty impressive growth lately, does that mean that circle is going to hold the underlying backing assets for the euro stablecoin in EU and euro denominated debts as well? Yeah. So the European stablecoin laws actually affect both USDC and EURC. And so July 1st, we announced that we were the first global stablecoin issuer to have both a dollar stablecoin USDC and a euro stablecoin EURC, legal electronic money in the European Union and issued and made available in the European Union itself. So it's both dollars and euros that are under that regime.

19:33We're the only major company and global player with the dollar stable coin that is actually legally compliant now there but specifically to your question um the the the laws kind of um prescribe you know the kind of safety uh of the reserves and what you need to do and euro needs to be held in euro cash or it can be held in um basically like the highest rated european government bond so think of it as german t-bills or say french t-bills right bundes bonds uh for example uh jeremy that's italy erasure come on i'm just telling you what are the highest rated you know government bonds and so some portion, a meaningful portion of the reserves can be held that way.

20:25Now, EURC is new, it's growing, but it's, you know, we're not at the stage where we have that sort of same exact structure as USDC, but we're optimistic about the potential for EUROS stablecoin and, of course, we'll evolve to ensure, obviously, it has to be legally compliant, but we do have the ability to kind of, you know, have a similar structure to USDC. All right, everybody, you know, being at a startup is a team sport, you're not going to get there alone, man, you got your founders, you got the early team members, of course, investors, most importantly, that first couple of customers, right?

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22:21All right, let's get back to this amazing program. All right, let's talk about the state of stable coins as a market. You and I are both token terminal fans on Twitter, and they had a really excellent set of charts that shows four critical data points here. One is upper left is outstanding supply, total stable coins in circulation, nearly back to an all time high if I'm reading that chart correctly. but the charts that really stood out to me was the number of stablecoin holders uh the amount of transfers and how quickly things are moving around it seems that all the charts right now for stablecoins are up and to the right uh almost at an accelerating pace so jeremy why is this moment proving so um fecund for the stablecoin market you know it's it's it's interesting because you know over the years and i would say even say two years ago a year ago you know people are always asking like um you know you know what does it take for this to achieve like mainstream scale right and and you know my answer has has typically been um there's sort of three key things that we need to solve right and and by we i don't just mean circle i'm sort of like collectively like all of us together trying to figure out how to solve this one of those is infrastructure so the infrastructure the blockchain networks themselves and and and my mental model for these blockchain networks is these are internet operating systems.

23:40And basically, we need higher performance, higher throughput internet operating systems, these blockchain networks. And so that's been a big jump. Over the past couple of years, we've firmly moved into the sort of third generation of blockchain networks through high performance layer one blockchains, and these layer twos. And what that effectively means is that you can do higher throughput, and the transaction costs for per transaction are either a sub-cent or a penny or whatever. And so, this is Brian Armstrong tweets about sub-second, sub-penny transactions, like we're there, right? And there are these high-performance networks and that is contributing to that growth because you bring the unit costs down, the marginal cost down, you make the throughput higher.

24:26It's sort of like going from dial-up to broadband and web 1.0 to web 2.0. We're kind of going through that infrastructure upgrade and that's unleashing more utility. Now, the second thing is that stablecoin networks like USDC are network effect businesses. They are platforms that people build on, meaning developers build apps to integrate to the protocol. And the more apps that are integrated, the more utility the network has, the more people who have the digital asset, the more utility the network has. And so you have these kind of positive network effect models. And then the more that happens, the more the developers say, hey, like, I'm at a competitive disadvantage if I'm building a product if I don't support USDC.

25:08And so you have the infrastructure upgrades, you have these really interesting, both user and developer network effects that are starting to really take hold. And then, you know, you also have, like, what I'll call like real usability improvements. And it's part of the infrastructure upgrade. You know, you probably remember, you know, just just even two, three years ago, right? You know, to use a stable coin, you need to like go buy it somewhere and then you needed to like go get like a browser plugin and the browser plugin you needed to in order to use it you needed to buy like ethereum and like that cost a bunch and there's like fees and then like takes you like seven minutes to transfer the ethereum to your self-custody wallet and like it's just like completely nonsense completely nonsense and and so it would be like totally justified for someone to say like who in their right mind is going to is going to use this but now you know you literally through through web-based interfaces and mobile app interfaces you can't onboard into a a wallet uh with like the onboarding experience of like onboarding to like whatsapp with a mobile id a pass key a face id like these kinds of things it's it's secure and you don't have to remember seed phrases and all this jazz and you can you know the the what i like to call the on and off ramps which is sort of the the way in which you can kind of get from the existing money system into the on-chain system is much, much easier and getting better.

26:34And so all of that combined is creating conditions that allow it to be easier to adopt and use stablecoins. And sort of the final boss in all of this is the government. And so what we're really, I think what's really exciting is that all around the world, almost every major jurisdiction from Japan to Hong Kong to Singapore to all of Europe, the UK, UAE, and the United States, all these jurisdictions are putting in place laws and regulations that define stablecoins as legal, electronic money, and a part of the real-world financial system. And so as those laws happen, then that really opens up the universe beyond the crypto early adopters to everyone and so like i think by the end of 2025 we we believe that like stable coins will be a legal integrated part of the financial system like pretty much really broadly and so that's why i also think those those charts are great and they're fun to look at and i and and we're excited about that but um we also recognize like it's still super early days when you think about how how large this phenomenon can be um because we're we're still we're kind of like in crossing the chasm metaphor jeffrey moore's kind of thing where i think we're kind of like midair trying to leap over the chasm right now we're not we have not crossed we have not crossed the chasm things could still go bad and we could plummet um but um but i think i think we're going to make the lead okay i want to get the future currencies point in a second but on the wallet's point i do think that the user interface for crypto writ large has gotten so much better over the last 10 15 years, but also in the last couple of years, to your point, is there a time in the future that you can see when I have, okay, let's just say a Citibank account and I have a debit card and I want to go purchase something and it's a USDC transaction and Citibank could effectively mediate between my checking account balance of dollars and digital dollars that it might have for its own kind of swapping purposes and i can use a trad card in a usdc transaction without needing to have a stable coin account or metamask account or coinbase account whatever and i can just use what i have and not even know that i've switched from regular dollars to digital dollars so there's a there's a lot in that question i i think um so i think there's a lot of things happening simultaneously that align with what you're describing.

29:13So on the one hand, we are seeing more and more what I'll broadly call like the fintech forward banks or like the, what are often called neobanks, right? More and more of these firms that are just adding directly the ability to use stablecoins. And so whether that's Nubank in Latin America, or that's Revolut, in Europe or, you know, a, a kind of brokerage, uh, app, like, uh, uh, Robin hood, obviously, you know, in some ways, you know, some of these huge, um, crypto firms like, uh, Coinbase and Binance that have like 400 million users combined, those are like kind of financial super apps increasingly where you can hold a balance.

29:57You can take your paycheck, you can have a card attached to it. You can do these things and, and they make it seamless to get USDC and stuff like that. But so we're seeing more and more of this ability to store value in what you would think of as dollars. It is USDC. And actually, we work with both Visa and MasterCard today. And they have programs in place where a card issuer, so someone's issuing like a Visa card or a MasterCard, those card issuers can issue a card where the money that is being spent is actually stablecoin. and so you're spending usdc and there's a big proliferation of these especially in emerging markets we're seeing all these products launch with they're basically like the neo banking style digital wallet apps that have a card and it lets you use stable coin as your as your way to store value because people want to hold dollars and then you spend it in the existing card network rails and it settles using usdc so like those those card issuers can actually settle the funds that they owe to visa or mastercard actually using usdc itself so like it's actually being used as a settlement rail for between the the financial institution and and and the card networks um so that's an interesting thing that's happening on that side um on the other side we're seeing like merchant acquirers so you know the world pays of the world uh you know the checkout.coms of the world the new vase of the world the stripes of the world offering options for settlement on the on the on the merchant side in usdc so we're we're seeing yeah so actually one of the coolest uh things that we saw um earlier this year was john collison at their big annual conference got up and did his kind of one more thing uh uh thing and he basically said hey look um you know crypto is back but it's it's usdc and it's stable coins and he demoed basically like in in the stripe checkout product um which they're rolling out it's like a it's like the product that you could just add as a merchant to your website or your app or whatever in the stripe checkout product like usdc payment acceptance will be right there alongside card payment acceptance and he was really excited about it and talked about it.

32:19There's a video of him on Twitter you can see. And he basically shows like, hey, you can now settle. Look how easy this is. You can have instant settlement on Solana they demoed with USDC. The money arrives to the merchant instantly, and the fees are much lower. And he sort of made a comment like, this is how payments should work. And so we're starting to see these sort of connection points, again, the hybrid model these connection points that that are there and i do think that to your precisely to your question as the kind of legal status of this becomes more clear that more and more um financial institutions will sort of say hey yeah i'm going to use this as like a settlement layer um because it's um it's it's it's a very powerful way to do that and and it could be like a business says i'll take usdc because i get the money instantly and it's lower fees like good for me the business and then on the other side there's more and more of these end user products whether it's a traditional bank a neo bank a crypto a super app like these different types of apps where it's a experience to scan a qr code and as i tweeted about earlier this year like ios opening up uh nfc uh to third-party wallets is a really big deal and that will enable yeah that will enable um web3 wallets that have usdc in theory it'll enable them to do tap pay right so you can actually use your phone with a wallet with usdc to make a transaction to a to a merchant at a point of sale other people have to do stuff the processors the acquirers have to like enable blockchain transactions you know the wallet developers themselves need to upgrade their wallets to add nfc tech and they need to get approved by apple and like there's a number of things that need to happen but these are all things that are kind of in the 2025 horizon which is pretty cool okay everybody you know i love newsletters i love sharing knowledge and what i'm up to through my newsletter and if you've got a newsletter you got to check out beehive it's spelled b-e-e-h-i-i-v i use it for the twist ticker and our twist 500 newsletter my team is raving about beehive because it is an all-in-one platform that not only powers our newsletter but it's got all these incredible platform features that are helping us grow our subscriber base which is what these newsletters are about listen to this beehive's co-founder is the same person who helped morning brew reach millions of subscribers in other words they took all those tactics and they put it into a platform they've got a great feature i just want to tell you about it's called the ai post builder this makes writing easy as a great writer sometimes i need inspiration well they will get inputs for your ideas and then shape and optimize your content for the maximum impact it's perfect for busy founders right and they're available 24 hours a day they also have a referral program that turns your audience into ambassadors it works great plus hey if you want to monetize they got an ed network and you know what it's super affordable starting just at 39 a month so here's a great call to action 30 day free trial plus 20 off your first three months go to beehive.com slash twist beehive.com slash twist b-e-e-h-i-i-v.com what a great product a question that keeps coming up in my mind as i listen to you is who are you making mad because you're disrupting something you're not disrupting the dollar you're actually i think strengthening the dollar by helping it become digital absolutely buying u.s government debt similar thing in in in europe but you know if i was the leader of a country that had a less stable currency and my citizens were trying to um offload their local assets for four dollars which they now can do with usdc do you run into people telling you to get lost from their national borders well within the international financial system right you have um you have a lot of different currencies obviously there's hundreds literally um and and you have a lot of different um kind of approaches to in the traditional system how money is allowed to move um and you um you know in some big markets you have very strict laws and capital controls like china and india right those are the two probably the two biggest examples and you know you don't see us going to china trying to drive usdc so we can't do that it's not that would be funny but it wouldn't work no um and so in many parts of the world you have what are called you know free-floating currencies and you have kind of open open currency exchange and there's no restrictions on you know a person uh holding different types of currencies and so huge parts of the world that is the case um but i i think um it'll be very interesting i do think that this is an area where it's a it's certainly going to be complex from a policy and political perspective um and you know i think i like to refer to you know stable coins as over the top money like we had over the top money yeah yeah ott money it's like ott media ott communications ott software distribution like all this stuff like the internet kind of let you do this and so stable coins are like ott money you know netflix is ott television but like you know different countries have different laws about what netflix can and can't do um and so we will have to navigate that and we are and so in what's what's actually happening is more and more countries are are actually putting stablecoin laws on the books.

37:59And they're figuring out like, okay, well, here's how a foreign issued stablecoin like USDC is going to be allowed to work in our country. And the intermediaries within those countries that are allowed to be distributors or providers, and what are the reporting requirements and other things. So there are going to be laws that react to this. But at the same time, right, there's utility, there's like the raw utility that exists, and end user preference and i've said this in the past like i think increasingly over the next decade people everywhere will be able to vote with their smartphones what economic system they want to participate in and and that is going to create complex issues but i do think that that is that is um a path uh that that will emerge it's going to be ultimately very very good for open systems i think that i think so that'll go well i mean that's sort of my my thesis from 30 years ago open internet wins right i mean i mean look if you as you said earlier we're looking at the soviet style economy what was one of the problems well it was information you can't essentially plan let's you have all the information they couldn't get that by definition ergo everything was out of whack at all times so i think you and i share a transparency leads to efficiency the argument i just i wonder what will happen when i don't know bricks countries for example you know opt out of this because they want to have stricter capital controls and so forth i mean they're going to end up isolated not only from digital money writ large but also i just think from an economic system that is experimenting in a way that really helps people escape what you might call bad economic geography derived luck like i was born in the u.s i had dollars my whole life right good fortune it poses significant questions for governments over time and my own belief is that um like it just seems inevitable over the coming decades that there'll be like because of the internet because of digital currency because of the proliferation of this technology it's likely that there will be fewer you know fewer major um international currencies I mean, there already are very few major international currencies.

40:12You look at that in the trade flow data and sort of what happens in trade flow, right? But I think even all the way down to the kind of domestic use, right? I think that there will end up being fewer. um and and that ultimately can be very very positive for economic development it can be very very positive for financial stability it can be it can be it can it can be very very positive um but it will require some difficult choices for you know for countries around the world and even in the u.s government itself like the treasury department or the u.s government they don't necessarily want to have like the their economic policy decisions which they're mandated to make for the domestic u.s population now all of a sudden they're like oh now we need to think about the argentinians or now we need to think about the this that is already the case like interest rates follow the fed and you know we're effectively exporting our inflation or exporting our our cost of money and it already happens that way that what's called the triffin dilemma in monetary uh theory that exists for for a reserve currency but i do think that these issues um will drive towards more consolidation in currencies over time we are going to get to interest rates in um just a couple seconds i want to talk about circles business model and then also it's um history through spax ipo filing and so forth but sticking just to the currencies and blockchains point uh i think there are 15 supported blockchains for usdc today you guys have the 16 now.

41:49Ah, your website led me astray. This is what happens when things are moving quickly. 16 blockchains. I apologize, Jeremy. Yeah, that's right. That's right. The dollar stable coin, the euro stable coin. I guess maybe the right question is, is there a time in the next couple of years when it's 10 currencies and 50 blockchains, or is it going to be more like four currencies and 20 blockchains? How much more do those numbers go up in the near show? Yeah, so a couple of things. I think first I'll talk about blockchain themselves so sure while to some people they might say hey you know evms have won and it's layer one layer twos super chains all this stuff like that that's like done i don't agree with that um i what i see and i i use my mental model on this is mobile which is and you can remember this well pre-iphone there were like 17 different mobile operating systems there was the symbion operating system windows phone remember uh palm pilot blackberry ntt docomo you know you had tons of different tons of these different and and and everyone was trying to get developers to say build on this and get their handsets distributed and all this stuff it was all awful like none of it was any good it was it was none of it was trash yeah it was all trash like and and people were like you go to mobile world congress and it was like and then people be showing off their like what they did with their Symbian 60 or whatever.

43:16It was just awful. So one could argue in some ways, like as it being frank, blockchain experiences and the usability of blockchains and the capabilities of blockchains up until more or less now has been kind of awful. It's sort of like, here's this incredible, these are like operating systems. They're competing for capabilities, developers and user capabilities, friendliness, etc. And I would very clearly say we have not yet achieved an iPhone moment of blockchain networks themselves. Wait, I want to I want to push back on that. Because base, which is associated with Coinbase has been growing incredibly quickly.

43:56And I follow a lot of folks who build on crypto, and I keep seeing more and more notes about base. and so to me in my head i was questioning is this the kind of like iphone moment faster cheaper integrated backed well by a major company so that was my impression uh i don't think you're trying to say that it's not the iphone moment but you seem to think that we still aren't there yet is that fair well there's so much still to be done um meaning like i and and by the way we're we're huge fans of base we have like all our products are supporting base and coinbase is a key strategic partner in in in usdc and so like it is it is great and it's amazing what they've achieved and like i'm constantly retweeting cool stuff that they're doing and stuff so it's it's really good um but like we need to be in a world where blockchain networks are not just supporting financial transactions they're supporting social games content intellectual property they're supporting provenance of data for AIs.

44:56They're supporting, you know, AI agent transaction flows. They're supporting retail scale applications, you know, digital tokens that are used in like super large mainstream application utilities, right? All this stuff. You can't do that today. You can't do it. Like the throughput's not there. Everything falls over. So we're not scalable in that sense. We need to be able to get to millions of transactions per second on these networks over time. And that is achievable. And look, I think the whole paradigm for software engineers and developers and the user experience side of this is still quite early as well.