1 00:00:00,080 --> 00:00:02,520 Welcome to Epicenter, the show which talks about the 2 00:00:02,520 --> 00:00:05,120 technologies, projects and people driving decentralization 3 00:00:05,120 --> 00:00:07,880 and the blockchain revolution. I'm Kodelika Ads and today I'm 4 00:00:07,880 --> 00:00:11,720 speaking with Zach Abrams, who is the CEO of Rich. 5 00:00:12,000 --> 00:00:15,320 Look, we love investing in new areas of the business and we 6 00:00:15,320 --> 00:00:18,400 described a few of them at cryptos, a particular area of 7 00:00:18,400 --> 00:00:20,240 investment. We made a large acquisition in 8 00:00:20,240 --> 00:00:23,160 the stable coin space. When I looked at stable coins, 9 00:00:23,160 --> 00:00:27,760 it was very clear to me that they were an economically 10 00:00:27,760 --> 00:00:30,440 rational winner. Over time, getting into the 11 00:00:30,440 --> 00:00:33,880 crypto space, the banks were like, you know, if you're doing 12 00:00:33,880 --> 00:00:36,320 anything with stable coins, you're automatically in this 13 00:00:36,320 --> 00:00:38,440 risk bucket. Whereas if you're doing the same 14 00:00:38,440 --> 00:00:40,960 activity but not with stable coins, you're in a different, 15 00:00:41,120 --> 00:00:43,560 different risk bucket. We're starting to make for the 16 00:00:43,560 --> 00:00:45,960 first time regulatory investments. 17 00:00:46,000 --> 00:00:49,240 The long term success of the stable coin space is going to be 18 00:00:49,240 --> 00:00:51,040 downstream of regulatory changes. 19 00:00:56,000 --> 00:00:59,400 I'm Frederica Ants and today I'm speaking with Zach Abrams, who 20 00:00:59,400 --> 00:01:04,519 is the CEO of Bridge Stripe acquired infrastructure platform 21 00:01:04,840 --> 00:01:10,320 and that lets companies issue, move forward and spend staples 22 00:01:10,320 --> 00:01:13,920 of in various ways. We'll get into all of the weeds 23 00:01:13,920 --> 00:01:17,280 in just a bit before that. These are our sponsors this 24 00:01:17,280 --> 00:01:19,560 week. This episode has brought you my 25 00:01:19,560 --> 00:01:22,640 noses building the open Internet one block at a time. 26 00:01:23,080 --> 00:01:26,680 Nosis was founded in 2015 and it's grown from 1 of Ethereum's 27 00:01:26,680 --> 00:01:30,080 earliest projects into a powerful ecosystem for open user 28 00:01:30,080 --> 00:01:32,920 owned finance. Nosis is also the team behind 29 00:01:32,920 --> 00:01:35,560 products that had become core to my business and that are so many 30 00:01:35,560 --> 00:01:39,760 others like Safe and Cow Swap. At the center is Nosis Chain. 31 00:01:40,240 --> 00:01:44,600 It's a low fee layer one with 0 downtime in seven years and 32 00:01:44,600 --> 00:01:46,640 secured by over 300,000 validators. 33 00:01:47,000 --> 00:01:49,720 It's the foundation for real world financial applications 34 00:01:49,720 --> 00:01:53,880 like Nosis Pay and Circles. All of this is governed by Nosys 35 00:01:53,880 --> 00:01:56,800 Dow, a community run organization where anyone with a 36 00:01:57,000 --> 00:02:01,320 GNO token can vote on updates, fund new projects, and even run 37 00:02:01,320 --> 00:02:04,760 a validator from home. So if you're building a Web 3 or 38 00:02:04,760 --> 00:02:07,080 you're just curious about what financial freedom can look like, 39 00:02:07,280 --> 00:02:11,760 start exploring at nosys dot IO. Hi Zach, it's good to have you 40 00:02:11,760 --> 00:02:12,040 here. It's. 41 00:02:12,560 --> 00:02:14,120 Great to be here, thanks for having me. 42 00:02:14,640 --> 00:02:18,400 For listeners who don't know you yet, give us the Cliff Notes 43 00:02:18,400 --> 00:02:22,560 version of your background and how you ended up in payments and 44 00:02:22,560 --> 00:02:25,680 money. So I founded Bridge with Sean 45 00:02:26,240 --> 00:02:32,840 and in maybe 2010 or so, Sean and I founded another company 46 00:02:32,840 --> 00:02:37,280 that was a payments company and we were trying to build a 47 00:02:37,280 --> 00:02:40,400 payment network by tying together university payment 48 00:02:40,400 --> 00:02:42,400 networks. And I don't know if this is a 49 00:02:42,400 --> 00:02:46,120 thing in. In Germany, but in the US, every 50 00:02:46,120 --> 00:02:47,800 school has their own payment network. 51 00:02:47,800 --> 00:02:50,560 That's not like Visa, MasterCard, Amex, Discover. 52 00:02:50,560 --> 00:02:53,880 It's like your campus dollar situation. 53 00:02:54,440 --> 00:02:56,880 These payment networks facilitate billions and billions 54 00:02:56,880 --> 00:02:59,800 of dollars of payment volume. And we were trying to be like 55 00:02:59,800 --> 00:03:02,880 what Venmo is to your bank account, but for these student 56 00:03:02,880 --> 00:03:05,200 payment networks. And then in doing so, bootstrap 57 00:03:05,200 --> 00:03:07,120 a new payment network by tying these together. 58 00:03:07,320 --> 00:03:10,920 Anyways, we tried to build that business for a while and we 59 00:03:10,920 --> 00:03:13,920 were. Woefully unsuccessful because it 60 00:03:14,360 --> 00:03:17,840 turned out to be a university sales business that we were very 61 00:03:17,840 --> 00:03:21,320 ill equipped to do successfully. We sold the company to Square. 62 00:03:21,320 --> 00:03:24,680 And basically, you know, from that point in time, I spent my 63 00:03:24,680 --> 00:03:27,880 entire career in fintech. It's like moving money, building 64 00:03:27,880 --> 00:03:29,680 money. Products were always the most 65 00:03:29,680 --> 00:03:32,960 interesting to me. And, you know, we saw from the 66 00:03:32,960 --> 00:03:36,840 very beginning what felt like really small changes in, you 67 00:03:36,840 --> 00:03:40,040 know, economic access, how big of an impact those could have, 68 00:03:40,040 --> 00:03:43,200 like with Square and they make. It just a little bit easier to 69 00:03:43,200 --> 00:03:46,560 accept card payments, enable millions and millions of 70 00:03:46,560 --> 00:03:51,720 businesses to you know, or or individuals to start businesses 71 00:03:51,720 --> 00:03:54,080 and run them full time when otherwise it would not have been 72 00:03:54,080 --> 00:03:56,440 possible. And so I stayed on that cake 73 00:03:56,440 --> 00:03:58,120 for, you know, a decade plus now. 74 00:03:58,800 --> 00:04:02,520 That's a long time payments kind of to someone who is not in 75 00:04:02,520 --> 00:04:07,000 payments, payments seems and I hate to say this seems somewhat 76 00:04:07,000 --> 00:04:09,800 trivial, no. So kind of you have a balance on 77 00:04:09,800 --> 00:04:15,840 on kind of one account or on one bank account of one wallet and 78 00:04:15,840 --> 00:04:18,240 kind of it, it moves somewhere else. 79 00:04:18,240 --> 00:04:22,960 Tell us about the misconceptions about how money actually moves 80 00:04:22,960 --> 00:04:26,720 versus how kind of the layperson thinks it moves. 81 00:04:27,200 --> 00:04:29,160 Yeah. I mean, I would say the thing 82 00:04:29,160 --> 00:04:35,600 about payments that is so interesting to me is that you 83 00:04:35,600 --> 00:04:41,800 have so many areas where you can be creative and find new 84 00:04:41,800 --> 00:04:44,880 solutions. So, you know, you could build 85 00:04:44,880 --> 00:04:49,680 new products at the UI layer, you know, by basically just 86 00:04:49,680 --> 00:04:54,000 making it easier to see balances and and you know, make a 87 00:04:54,000 --> 00:04:57,600 transaction or what have you. It could be at like actual the 88 00:04:57,600 --> 00:05:00,480 money. Storage layer, it could be at 89 00:05:00,480 --> 00:05:04,800 like the regulatory layer, you know, and it can be and, and it 90 00:05:04,800 --> 00:05:08,160 could keep going down. And like we've seen how like the 91 00:05:08,160 --> 00:05:12,400 best products are not just like innovations in terms of consumer 92 00:05:12,400 --> 00:05:15,880 behavior, but our material changes in. 93 00:05:15,960 --> 00:05:20,160 How? Material changes in in how you 94 00:05:20,160 --> 00:05:23,800 know, in money capabilities that are facilitated by, you know, 95 00:05:23,800 --> 00:05:27,720 regulatory changes or, you know, enabling functionality that 96 00:05:27,720 --> 00:05:29,120 others didn't have and, and a very. 97 00:05:29,120 --> 00:05:32,240 Quick example of this, that is like totally outside the crypto 98 00:05:32,240 --> 00:05:36,720 realm, but Cash App, for instance, Cash App is a 99 00:05:36,720 --> 00:05:40,960 peer-to-peer payment product in the in the US, it's been very, 100 00:05:40,960 --> 00:05:44,840 very successful. Early Cash App enabled you to 101 00:05:44,880 --> 00:05:46,880 instantly send money to any bank account. 102 00:05:47,200 --> 00:05:51,000 This was like not possible in the US before Cash App built 103 00:05:51,000 --> 00:05:53,280 their product. And the way Cash App built their 104 00:05:53,280 --> 00:05:58,360 product was by taking advantage of a debit card refund. 105 00:05:58,960 --> 00:06:03,320 So everybody in the US had a debit card, and you could refund 106 00:06:03,320 --> 00:06:07,280 money to a debit card which then immediately credited. 107 00:06:07,280 --> 00:06:08,960 That balance back to your bank account. 108 00:06:09,560 --> 00:06:12,520 And the Cash App team figured out that you could use this 109 00:06:12,520 --> 00:06:17,680 debit card refund to enable what felt like an instant payment in 110 00:06:17,680 --> 00:06:25,280 the US And, you know, finding these types of opportunities and 111 00:06:25,280 --> 00:06:28,840 being able to figure out how to take all these, like, wildly 112 00:06:28,840 --> 00:06:33,760 complex puzzle pieces and rejigger them together is what 113 00:06:33,760 --> 00:06:36,840 intellectually makes payments very interesting and I think 114 00:06:36,840 --> 00:06:39,840 like stablecoins. You know, bring it back to our 115 00:06:39,840 --> 00:06:42,960 business is sort of an innovation at every layer, which 116 00:06:42,960 --> 00:06:46,040 is particularly fun to, you know, makes it particularly fun 117 00:06:46,040 --> 00:06:50,240 because it enables so many new types of payment experiences. 118 00:06:51,480 --> 00:06:55,120 So. So the Cash App example is very 119 00:06:55,120 --> 00:06:59,000 much a legacy Rails example, right? 120 00:06:59,000 --> 00:07:03,840 I lived in the US for a number of years and it always struck me 121 00:07:04,120 --> 00:07:08,880 how backwards the financial infrastructure was compared to 122 00:07:08,880 --> 00:07:13,200 Europe because kind of like we've had free instant transfers 123 00:07:13,200 --> 00:07:16,240 between bank accounts for really long time. 124 00:07:16,400 --> 00:07:20,520 So why do you think kind of like there's this systemic difference 125 00:07:20,840 --> 00:07:25,800 in how powerful the underlying rails are? 126 00:07:27,280 --> 00:07:32,040 Well, yeah, I mean, this is so this is a, this is a great, a 127 00:07:32,040 --> 00:07:33,400 great, a great question. So. 128 00:07:34,480 --> 00:07:39,280 In the US there are like you know, 1000 X the number of banks 129 00:07:39,320 --> 00:07:42,960 than there are in in Europe. And so in the US we have this 130 00:07:42,960 --> 00:07:45,640 like dual banking structure where you can be a Federal Bank 131 00:07:45,640 --> 00:07:48,840 like JP Morgan or Wells Fargo or have you these are banks that 132 00:07:48,840 --> 00:07:51,880 operate across many different states or you can be a state 133 00:07:51,880 --> 00:07:55,280 regulated. Bank like, you know, the North 134 00:07:55,280 --> 00:07:58,800 Carolina Community Bank, for instance, that would just serve 135 00:07:58,800 --> 00:08:00,960 folks in a specific town in North Carolina. 136 00:08:01,120 --> 00:08:05,920 And this dual banking structure has multiple different 137 00:08:05,920 --> 00:08:09,640 regulators and the net result is that it's a lot easier and 138 00:08:09,640 --> 00:08:13,560 permissive in the US to create banks that operate at different 139 00:08:13,560 --> 00:08:15,600 scales. The benefit of this is you have 140 00:08:15,600 --> 00:08:20,760 a very dislike, very diverse and you know, very competitive 141 00:08:20,840 --> 00:08:26,040 banking ecosystem. And it enables, you know, lots 142 00:08:26,040 --> 00:08:31,000 of neo banking and like a lot of fintech products to be created 143 00:08:31,240 --> 00:08:34,039 because you have so many different banks are trying to 144 00:08:34,039 --> 00:08:36,480 find ways to compete with each other that some banks. 145 00:08:36,480 --> 00:08:40,360 Choose to support fintechs. You know, and they do that by 146 00:08:40,360 --> 00:08:43,280 enabling, you know, exposing their AP is and then a bunch of 147 00:08:43,280 --> 00:08:45,080 new fintech products get get created. 148 00:08:45,400 --> 00:08:48,360 Whereas in in Europe, there's fewer banks and those banks are 149 00:08:48,360 --> 00:08:52,480 much more heavily regulated. The flip side of that is that in 150 00:08:52,480 --> 00:08:56,160 the US, as a result, rolling out any changes to a payment rail 151 00:08:56,360 --> 00:09:00,000 necessitates the bottoms up adoption of that payment rail 152 00:09:01,040 --> 00:09:03,640 because there is not one. Regulator that can say hey 153 00:09:03,640 --> 00:09:08,320 everyone you're now using this bit of functionality and so 154 00:09:08,320 --> 00:09:11,480 you've seen this play out in the US where we have the automated 155 00:09:11,480 --> 00:09:15,800 clearing house that tried to roll out RTP payments, which 156 00:09:15,800 --> 00:09:18,400 have gotten some adoption but not that much adoption and the 157 00:09:18,400 --> 00:09:21,840 Fed has tried to roll out you know FED now, which is getting 158 00:09:21,840 --> 00:09:24,240 some adoption but not universal adoption. 159 00:09:24,440 --> 00:09:27,720 Whereas in Europe they could just say everybody we're in SEPA 160 00:09:27,880 --> 00:09:31,240 and everyone's going to support SEPA Instant and it and it and 161 00:09:31,240 --> 00:09:33,920 it happens. So there are pros and cons to 162 00:09:33,920 --> 00:09:35,920 this. And you know, I think everybody 163 00:09:35,920 --> 00:09:39,680 around the world can can see. The cons in the US where we have 164 00:09:39,920 --> 00:09:44,760 some of the most robust banking infrastructure in the world, yet 165 00:09:44,760 --> 00:09:47,600 some of the worst payment you know and lowest performance 166 00:09:47,600 --> 00:09:50,800 payment rails of any, you know, major developed country. 167 00:09:51,240 --> 00:09:56,680 You've kind of transitioned from the traditional payment rails to 168 00:09:56,680 --> 00:09:59,920 kind of the the new shiny stables rails. 169 00:10:01,000 --> 00:10:05,520 Was there a specific moment that kind of made you say I'm done 170 00:10:05,520 --> 00:10:07,360 with this, I'll see what else is out there. 171 00:10:08,440 --> 00:10:09,640 It wasn't. It wasn't so. 172 00:10:09,640 --> 00:10:16,280 Much like I'm, I'm done with this more that with one of the 173 00:10:16,280 --> 00:10:20,320 reasons that I really liked, you know, financial products. 174 00:10:20,320 --> 00:10:23,520 I'm curious, you know, what drew you to crypto products? 175 00:10:23,800 --> 00:10:26,880 But but for me, I've seen a bunch of different products be 176 00:10:26,880 --> 00:10:29,680 successful. The commonality across all of 177 00:10:29,680 --> 00:10:32,920 them, whether it was Square or Coinbase or you know, Breck's or 178 00:10:32,920 --> 00:10:36,840 what have you, all of these products were made financial 179 00:10:36,840 --> 00:10:40,280 sense. And so that by that I mean, they 180 00:10:40,280 --> 00:10:43,360 enable the payment or some type of functionality to happen 181 00:10:43,360 --> 00:10:46,520 faster or cheaper. And they did it in a way that 182 00:10:46,520 --> 00:10:50,000 was much more durable. And so like Square, you could 183 00:10:50,000 --> 00:10:53,280 accept a card payment at a fraction of the cost and a 184 00:10:53,280 --> 00:10:56,680 fraction of the time invested versus getting a terminal before 185 00:10:57,080 --> 00:11:00,200 or Breck's, if you were a startup, you could sign up and 186 00:11:00,200 --> 00:11:04,240 get a credit card with, you know, a fraction of the 187 00:11:04,600 --> 00:11:07,600 diligence required, you know, to pledge Personal Capital and you 188 00:11:07,600 --> 00:11:11,160 could do it same day, you know, and if you can find those 189 00:11:11,160 --> 00:11:13,240 opportunities, they're just like super obvious. 190 00:11:13,240 --> 00:11:15,120 And, and the most clear example of this is Robin Hood. 191 00:11:15,560 --> 00:11:18,960 You know Robin Hood if you know before you trade for $5 and now 192 00:11:18,960 --> 00:11:20,840 you can trade for free. Of course, if you can build a 193 00:11:20,840 --> 00:11:23,960 sustainable business around free trades, it's going to win. 194 00:11:24,360 --> 00:11:28,240 And when I looked at stable coins, it was very clear to me 195 00:11:28,480 --> 00:11:32,440 that they were an economically rational winner. 196 00:11:32,440 --> 00:11:36,520 Over time, they enabled payments to happen faster or cheaper. 197 00:11:37,040 --> 00:11:42,120 And as a result, it was super clear to me as we started 198 00:11:42,120 --> 00:11:45,200 spending time in the space that at some over some arc of time, 199 00:11:45,480 --> 00:11:49,320 this was going to become a very, very important payment rail. 200 00:11:49,320 --> 00:11:51,880 In some ways it took longer than I thought and in some ways it 201 00:11:51,880 --> 00:11:53,640 took took less time than I thought. 202 00:11:53,920 --> 00:11:58,480 But but, but that's really what drew me to the to the 203 00:11:58,480 --> 00:12:00,040 opportunity and to build in the space. 204 00:12:00,280 --> 00:12:07,400 What year was this? So I was at Coinbase in 2018 205 00:12:08,120 --> 00:12:13,440 when Coinbase was launching USDC with Circle and I was running 206 00:12:13,440 --> 00:12:16,400 Coinbase's consumer business at the time. 207 00:12:16,400 --> 00:12:20,240 So this is, you know, basically the consumer app that people 208 00:12:20,240 --> 00:12:24,400 sign up for and use to to trade. And there was a different group 209 00:12:24,400 --> 00:12:27,120 of folks who was launching USDC and we were tasked with figuring 210 00:12:27,120 --> 00:12:30,520 out how we would use it. And as we started spending time, 211 00:12:30,600 --> 00:12:33,760 you know, figuring out USDC, it was like our first idea was to 212 00:12:33,760 --> 00:12:36,640 make Coinbase into a global bank on top of USDC. 213 00:12:36,680 --> 00:12:39,040 So it enabled you to build financial products across 214 00:12:39,040 --> 00:12:40,880 borders that wasn't possible before. 215 00:12:41,160 --> 00:12:43,640 Our second idea was to facilitate cross-border payments 216 00:12:43,640 --> 00:12:45,880 and peer-to-peer payments through it because it enabled 217 00:12:45,880 --> 00:12:49,240 you to move value, you know, in a way that was much cheaper. 218 00:12:49,400 --> 00:12:52,280 Ultimately, it's taken, you know, I left Coinbase, it took 219 00:12:52,280 --> 00:12:54,920 Coinbase some time to build a bunch of those products, but 220 00:12:54,920 --> 00:12:57,600 that bug sort of stayed, stayed with me. 221 00:12:57,600 --> 00:13:03,320 And then when we started Bridge in 2022, it was shocking to me 222 00:13:03,320 --> 00:13:06,960 that more had not been done over the subsequent 8 years to enable 223 00:13:06,960 --> 00:13:09,560 that type of functionality. Stablecoins had mostly been used 224 00:13:09,560 --> 00:13:14,120 for trading use cases, you know, Defy and Bitcoin settlement and 225 00:13:14,120 --> 00:13:17,640 and so on. And we wanted to make it 226 00:13:17,640 --> 00:13:20,360 possible for others to take advantage of that opportunity. 227 00:13:20,760 --> 00:13:24,160 Were you worried about the regulatory implications of 228 00:13:24,160 --> 00:13:27,400 Staples because in 2022 the situation looked much different 229 00:13:27,400 --> 00:13:31,920 than it does today. There's a bunch of ways in which 230 00:13:31,920 --> 00:13:33,760 I could, I could take that, take that question. 231 00:13:33,760 --> 00:13:39,960 I mean, I think there's, yes, I was, I was, I was worried to 232 00:13:39,960 --> 00:13:42,640 some extent. But at the time when I was 233 00:13:42,640 --> 00:13:45,560 trying to, when Sean and I were trying to start the company, it 234 00:13:45,560 --> 00:13:50,200 was, you know, the 1st order. You know, in Maslow's hierarchy 235 00:13:50,200 --> 00:13:53,480 of needs, you know, we were still at like shelter and water 236 00:13:54,600 --> 00:13:58,440 and, and that was like just finding 1 customer. 237 00:13:59,440 --> 00:14:03,960 And we always viewed it that like if we if we were worried 238 00:14:03,960 --> 00:14:05,760 about the regulatory implications. 239 00:14:05,760 --> 00:14:08,920 Then that meant that we had some business to defend against 240 00:14:08,920 --> 00:14:12,120 regulatory changes and that would be a champagne problem. 241 00:14:12,640 --> 00:14:17,200 And so, so for the first bit we were, we were really just like 242 00:14:17,200 --> 00:14:18,880 hyper focused on shelter and water. 243 00:14:18,880 --> 00:14:22,880 Now that we have a business, it's clear that stable coins are 244 00:14:23,160 --> 00:14:27,040 really starting to work. The, you know, we're starting to 245 00:14:27,040 --> 00:14:31,760 make for the first time regulatory investments that you 246 00:14:31,760 --> 00:14:34,720 know, in trying to work with regulators to help them 247 00:14:34,720 --> 00:14:37,520 understand our business and and the opportunities that are 248 00:14:37,520 --> 00:14:40,160 available. Because it is really clear that 249 00:14:40,160 --> 00:14:43,360 the long term success of the stablecoin space is going to be 250 00:14:43,360 --> 00:14:45,200 downstream of regulatory changes. 251 00:14:45,200 --> 00:14:49,360 And this is like no different. I think all of us in the crypto 252 00:14:49,360 --> 00:14:55,240 space have like operated in a weird and temporary regulatory 253 00:14:55,240 --> 00:14:58,840 zone where most of us could ignore the regulatory 254 00:14:58,840 --> 00:15:00,360 requirements. And it was much like the 255 00:15:00,360 --> 00:15:04,160 Internet in like the mid 90s. There's like this great book 256 00:15:04,400 --> 00:15:05,960 called Who Controls the Internet? 257 00:15:05,960 --> 00:15:09,320 All about like the regulatory changes and regulatory thinking 258 00:15:09,320 --> 00:15:12,280 around the Internet, which like early Internet, everyone thought 259 00:15:12,280 --> 00:15:14,240 that local regulators didn't matter. 260 00:15:14,240 --> 00:15:16,720 You could sell goods anywhere, you could do what you wanted and 261 00:15:16,720 --> 00:15:20,120 so on. And France and PayPal, you know, 262 00:15:20,120 --> 00:15:23,560 got into this whole thing and that reshaped, you know, 263 00:15:23,560 --> 00:15:25,240 regulatory requirements around the Internet. 264 00:15:25,240 --> 00:15:29,840 And we're kind of in the precipice of our sort of France 265 00:15:29,840 --> 00:15:32,760 PayPal moment, but in the stable point and crypto space. 266 00:15:34,280 --> 00:15:41,280 So you recently, recently while back we're acquired by Stripe, 267 00:15:41,400 --> 00:15:45,440 you already alluded to it. Walk us through how that 268 00:15:45,440 --> 00:15:49,640 happened and how much kind of regulatory thinking kind of came 269 00:15:49,640 --> 00:15:55,440 into that. I did not think that heading 270 00:15:55,440 --> 00:16:00,400 into I guess like those conversations were in 2024, 271 00:16:00,400 --> 00:16:05,240 started in 2024, Yeah. And so heading into 2024, even 272 00:16:05,240 --> 00:16:08,520 midway through 2024, I did not think our business was 273 00:16:08,520 --> 00:16:15,720 acquirable, mostly because we were so optimistic about what 274 00:16:15,720 --> 00:16:19,120 was possible with stable coins and it was. 275 00:16:19,120 --> 00:16:21,240 Hard. To envision there being an 276 00:16:21,240 --> 00:16:27,760 Enquirer who was similarly optimistic and had this scale to 277 00:16:27,760 --> 00:16:31,080 put behind that, you know, to, to invest behind that optimism 278 00:16:31,520 --> 00:16:37,720 and had sort of the, the risk tolerance to be pushing forward 279 00:16:37,720 --> 00:16:43,440 in this brand new space. And, you know, it is like, it's 280 00:16:43,440 --> 00:16:46,320 really, it's really complicated. Like take an example of a 281 00:16:46,320 --> 00:16:51,920 business that is like, you know, regulated and to do, you know, a 282 00:16:51,920 --> 00:16:56,000 specific type of banking activity or money transmission 283 00:16:56,000 --> 00:16:58,320 or what have you. And then getting into the crypto 284 00:16:58,320 --> 00:17:01,480 space, we just heard it over and over again from our customers of 285 00:17:01,480 --> 00:17:04,720 like, our board doesn't know if we should be doing stuff in 286 00:17:04,720 --> 00:17:08,640 stable coins or, you know, our regulator doesn't understand 287 00:17:08,640 --> 00:17:11,119 stable coins. So like this is too risky. 288 00:17:11,240 --> 00:17:14,319 The banks were like, you know, if you're doing anything with 289 00:17:14,319 --> 00:17:16,560 stablecoins, you're automatically in this risk 290 00:17:16,560 --> 00:17:18,400 bucket. Whereas if you're doing the same 291 00:17:18,400 --> 00:17:20,440 activity but not with stablecoins, you're in a 292 00:17:20,520 --> 00:17:22,240 different, different risk bucket. 293 00:17:22,560 --> 00:17:24,359 There was no like first principles to it. 294 00:17:24,359 --> 00:17:28,560 It was just deemed to be in this, in this risky, in this 295 00:17:28,560 --> 00:17:31,640 risky category. And it became pretty clear 296 00:17:31,640 --> 00:17:37,240 though, when I started spending time with Patrick, that him and 297 00:17:37,240 --> 00:17:41,360 John and the rest of the, and the rest of the Stripe team were 298 00:17:41,360 --> 00:17:45,520 incredibly optimistic about what was possible with stable corns, 299 00:17:45,520 --> 00:17:49,440 You know, just as much and maybe even in some cases more so than 300 00:17:49,440 --> 00:17:54,040 than I was. And as we spent more time 301 00:17:54,040 --> 00:17:57,680 together, it was clear that we could do a lot more together 302 00:17:57,680 --> 00:18:01,280 than Bridge could do on its own. And, and now I think we're 303 00:18:01,280 --> 00:18:05,480 seeing a lot of that play out where our stablecoin issuance 304 00:18:05,480 --> 00:18:11,600 business, for instance, is growing at a faster rate and is, 305 00:18:12,560 --> 00:18:16,240 you know, much more compelling together with Stripe then it 306 00:18:16,240 --> 00:18:19,000 would be then it would be separate as an independent, 307 00:18:19,120 --> 00:18:23,440 independent entity. And so I think their optimism, 308 00:18:23,440 --> 00:18:26,640 you know, combined with our like shared belief in how far we 309 00:18:26,640 --> 00:18:28,320 could go together is sort of. What? 310 00:18:28,320 --> 00:18:31,160 Made it happen, but I did. I certainly thought the risk and 311 00:18:31,160 --> 00:18:32,800 regulatory stuff was going to be a problem. 312 00:18:33,200 --> 00:18:38,240 I, I actually had one of our investors as part of the process 313 00:18:38,640 --> 00:18:43,480 call Patrick and I was like do everything you can to convince 314 00:18:43,480 --> 00:18:49,000 Patrick not to do the deal as. Part of as part of the process. 315 00:18:49,000 --> 00:18:53,440 And so he called Patrick and put in like a really hard anti sell 316 00:18:53,440 --> 00:18:56,760 around like, you know, are you willing to take the risk and 317 00:18:56,760 --> 00:18:59,560 make the investments and so on to push forward in this space, 318 00:18:59,560 --> 00:19:01,840 even if some things might be competitive with products you're 319 00:19:01,840 --> 00:19:05,200 building internally and so on. And then afterwards he called me 320 00:19:05,200 --> 00:19:08,960 and he was like, no, he's all in, which was great. 321 00:19:10,240 --> 00:19:16,360 Yeah, that's, yeah, some, some, some people are just have a lot 322 00:19:16,360 --> 00:19:22,360 of founders kind of have really unshakable belief in things kind 323 00:19:22,360 --> 00:19:24,200 of like they've once convinced themselves of. 324 00:19:24,200 --> 00:19:27,680 So I think kind of yeah, 100%. I I I hear you. 325 00:19:27,760 --> 00:19:30,280 I totally, I, I agree. I'm guessing you see this with 326 00:19:30,280 --> 00:19:33,320 your business, but like now I feel like there's a bit of a 327 00:19:33,320 --> 00:19:37,600 cheat code that like if you are a founder of a business that has 328 00:19:37,600 --> 00:19:43,560 like worked, you kind of see how important growth curves are, you 329 00:19:43,560 --> 00:19:46,200 know, like cohort curves or growth curves or. 330 00:19:46,600 --> 00:19:48,720 You know what have you in a business and like. 331 00:19:49,280 --> 00:19:52,560 You know, you can apply the same thing to industries as a whole. 332 00:19:52,560 --> 00:19:55,040 And it's like once you see it, it's hard to be, it's hard for 333 00:19:55,040 --> 00:19:58,760 it to be unseen. And, you know, things that are 334 00:19:58,760 --> 00:20:00,480 like really starting to compound. 335 00:20:00,560 --> 00:20:06,040 It takes some like, you know, Herculean force to prevent and 336 00:20:06,040 --> 00:20:08,360 stop compounding once it starts going. 337 00:20:09,520 --> 00:20:13,960 And I think that they could apply that to the stablecoin 338 00:20:13,960 --> 00:20:16,160 space and you could see it starting to compound or you 339 00:20:16,160 --> 00:20:19,200 could apply that to our customers and like the cohorts 340 00:20:19,200 --> 00:20:21,840 and bridge which are starting to compound now. 341 00:20:21,840 --> 00:20:25,880 As I see it, you can like apply it to a bunch of different, a 342 00:20:25,880 --> 00:20:28,720 bunch of different industries, but these like, you know, 343 00:20:28,720 --> 00:20:31,720 starting these increasing growth curves. 344 00:20:32,160 --> 00:20:35,080 Where there is like clear opportunity to continue to 345 00:20:35,080 --> 00:20:38,480 impounding, it's like pretty easy now to gain conviction 346 00:20:38,480 --> 00:20:40,960 regardless of how crazy the idea seems. 347 00:20:42,000 --> 00:20:47,680 Yeah, I I think coming from a payments background and knowing 348 00:20:47,760 --> 00:20:53,400 how worthy of disruption many of the base technologies are, 349 00:20:53,800 --> 00:21:00,880 something so simple and clean a blockchain tech is also 350 00:21:00,880 --> 00:21:05,600 compelling in its own right, so. 100 a hundred. 351 00:21:05,600 --> 00:21:07,280 Percent. I mean, is that what is that 352 00:21:07,280 --> 00:21:13,200 what attracted you to the space? No, I was on a very early wave. 353 00:21:13,360 --> 00:21:18,040 I came for the cryptography and I, I stayed for the permission 354 00:21:18,040 --> 00:21:23,640 is innovation and the agency that kind of it can confer on 355 00:21:23,640 --> 00:21:26,120 people. So, but I, I do actually 356 00:21:26,240 --> 00:21:33,160 appreciate the the operational efficiency gains that you can 357 00:21:33,520 --> 00:21:35,640 get as well. Totally. 358 00:21:35,920 --> 00:21:39,280 So does that mean that like, did you come in was like Bitcoin the 359 00:21:39,280 --> 00:21:42,080 thing that brought you in or? Was yeah, so kind of when when I 360 00:21:42,080 --> 00:21:45,120 came in, Bitcoin was the only thing that was that was around. 361 00:21:45,160 --> 00:21:49,760 So it's a good. Let's talk about the things that 362 00:21:49,840 --> 00:21:54,040 you actually offer. So kind of so far there's been 363 00:21:54,040 --> 00:21:58,960 kind of a lot of kind of like Meta questions, but you have a 364 00:21:58,960 --> 00:22:04,160 platform that offers services to businesses and they they kind of 365 00:22:04,160 --> 00:22:05,920 they come in a number of flavors. 366 00:22:05,920 --> 00:22:10,160 Can you walk us through them? Yeah, we. 367 00:22:10,200 --> 00:22:14,240 We have. Five sort of core businesses, 368 00:22:14,240 --> 00:22:17,400 but but at the OR business product business lines. 369 00:22:17,400 --> 00:22:20,840 But at the end of the day, you know, we're totally focused on 370 00:22:20,840 --> 00:22:25,680 serving developers, so a team. Comes to us and they have a 371 00:22:25,680 --> 00:22:29,360 vision to build a fintech for their local country or to 372 00:22:29,360 --> 00:22:32,880 facilitate payouts. Or you know, a government entity 373 00:22:32,880 --> 00:22:35,720 might come, come to us because it wants to disperse aid. 374 00:22:36,040 --> 00:22:39,640 But you know, these these applications, whatever they are, 375 00:22:39,640 --> 00:22:43,920 come to us and they have an idea around how they want to use 376 00:22:43,920 --> 00:22:48,240 stable coins to facilitate some aspect of their of their 377 00:22:48,240 --> 00:22:51,040 business. And then we provide APIs that 378 00:22:51,040 --> 00:22:54,920 enable them to to take advantage of this tokenized money layer 379 00:22:55,320 --> 00:23:00,320 and to build products that reach more people or serve folks in 380 00:23:00,320 --> 00:23:04,280 new countries or you know, facilitate payouts into 381 00:23:04,280 --> 00:23:07,880 geographies that were cost. Prohibitive or inaccessible 382 00:23:07,880 --> 00:23:11,320 before or whatever that whatever the need might be. 383 00:23:12,320 --> 00:23:15,240 And, and the, the manifestation of that are these five products. 384 00:23:15,240 --> 00:23:18,680 The first are our orchestration AP is that's the first product 385 00:23:18,680 --> 00:23:22,000 we built and that is basically send one type of dollar in and 386 00:23:22,000 --> 00:23:25,720 spit another type of dollar out. So U.S. dollars in, you know, 387 00:23:25,720 --> 00:23:31,560 USD T out, USD T in, you know, USDC out and so on. 388 00:23:31,560 --> 00:23:33,560 And it can take any way shape or form. 389 00:23:33,560 --> 00:23:37,040 So like the US government might use these AP is to send U.S. 390 00:23:37,040 --> 00:23:39,320 dollars? In we convert them into stable 391 00:23:39,320 --> 00:23:43,080 coins and send hundreds of thousands of stablecoin payments 392 00:23:43,080 --> 00:23:48,240 out to end end recipients. The second AP is are are 393 00:23:48,240 --> 00:23:51,560 stablecoin issuance AP is so you can hit an API and you can 394 00:23:51,560 --> 00:23:54,880 create your own stablecoin. So someone could send in USDC 395 00:23:54,880 --> 00:23:57,560 and you could settle it as your own stablecoin and you would do 396 00:23:57,560 --> 00:24:00,440 that so that you can access the economics underlying the 397 00:24:00,440 --> 00:24:03,680 stablecoin. You basically get, you know, 4% 398 00:24:03,680 --> 00:24:07,840 interest on the on the balances. So it and unlocks new economics 399 00:24:07,840 --> 00:24:11,040 for you and it helps you control your dollars so you can make 400 00:24:11,040 --> 00:24:13,920 sure it's on the right block chains, there's no burn fees. 401 00:24:13,920 --> 00:24:18,080 You know, it is a, it is a money platform that you now control. 402 00:24:18,600 --> 00:24:21,880 The third AP is are our FX products. 403 00:24:21,880 --> 00:24:26,120 So you can send in dollars and spit out Mexican pesos or 404 00:24:26,240 --> 00:24:31,120 Brazilian Reyes or a bunch of other currencies, EUR, GVP and 405 00:24:31,120 --> 00:24:32,440 so on. Then we issue. 406 00:24:32,440 --> 00:24:35,120 Cards. On top of that, and then we also 407 00:24:35,120 --> 00:24:38,400 offer wallets. And essentially all of these 408 00:24:38,400 --> 00:24:40,920 products have come together through various needs of 409 00:24:40,920 --> 00:24:45,400 customers to build, you know, whatever stablecoin products 410 00:24:45,400 --> 00:24:47,520 they need. How bespoke is it? 411 00:24:47,520 --> 00:24:50,520 So kind of do you just provide the APIs or do you also do 412 00:24:50,520 --> 00:24:55,680 consulting for say an aid agency comes to you and asks for often 413 00:24:55,680 --> 00:25:00,160 they don't have the most tech forward kind of people in house, 414 00:25:00,160 --> 00:25:02,200 right? So is it kind of like a dual 415 00:25:02,200 --> 00:25:06,080 nature job where you kind of also consult with them or is it 416 00:25:06,080 --> 00:25:09,120 just these are APIs kind of you, you do you? 417 00:25:09,640 --> 00:25:13,160 Yeah. I mean, I think that it is at 418 00:25:13,160 --> 00:25:17,800 the beginning it was like entirely consulting, like an 419 00:25:17,840 --> 00:25:20,280 entirely consulting. That was partially because like 420 00:25:20,280 --> 00:25:24,800 our APIs never quite offered what anyone wanted because like 421 00:25:24,800 --> 00:25:29,120 the V1 maybe met like 50% of the needs of every customer who who 422 00:25:29,120 --> 00:25:32,720 came in, but but also because we're kind of creating a new 423 00:25:32,720 --> 00:25:36,640 category. And so this like whole segment 424 00:25:36,640 --> 00:25:39,720 space didn't really exist when we started the company. 425 00:25:39,720 --> 00:25:45,040 There really weren't companies that were building like, you 426 00:25:45,040 --> 00:25:48,320 know, core financial services with stablecoins. 427 00:25:48,440 --> 00:25:51,920 It like the market was more or less non existent. 428 00:25:52,040 --> 00:25:56,720 And as, as we've created our AP is the market has come around 429 00:25:56,720 --> 00:25:59,760 and matured through a lot of the use cases that have been built 430 00:25:59,760 --> 00:26:03,840 on us and some others. And, and, and, and so the, the 431 00:26:03,840 --> 00:26:07,640 early result is that we're sort of constantly on the frontier of 432 00:26:07,640 --> 00:26:09,720 the market. And I feel like being on the 433 00:26:09,720 --> 00:26:14,120 frontier of the market is, you know, you have to have to play 434 00:26:14,120 --> 00:26:16,320 more of a consulting role. Like you see this now with the 435 00:26:16,480 --> 00:26:19,760 AI companies, you know, they're doing a lot of forward deployed 436 00:26:19,760 --> 00:26:25,200 engineers to help businesses adopt AI because it's not clear 437 00:26:25,480 --> 00:26:27,560 how it's got. There isn't really a playbook 438 00:26:28,120 --> 00:26:30,920 quite yet. And so I would say there's some 439 00:26:30,920 --> 00:26:33,840 areas of our business where we're on the frontier still like 440 00:26:33,840 --> 00:26:36,400 stablecoin issuance is very much on the frontier. 441 00:26:36,400 --> 00:26:39,040 Teams are still figuring out how to issue a stablecoin and how to 442 00:26:39,040 --> 00:26:41,760 grow a stablecoin, what it takes for a stablecoin to be 443 00:26:41,760 --> 00:26:44,840 successful. Whereas other products like our 444 00:26:44,840 --> 00:26:49,160 stablecoin orchestration business, there's now like many 445 00:26:49,160 --> 00:26:52,720 years of data points on like what is working and what is not 446 00:26:52,720 --> 00:26:55,560 working. And if you want to replicate a 447 00:26:55,560 --> 00:26:57,920 use case that we've seen before, like you want to build a 448 00:26:57,920 --> 00:27:01,080 stablecoin neobank like that is super plug and play. 449 00:27:01,080 --> 00:27:04,520 Like you could come to our API, spin up accounts, serve millions 450 00:27:04,520 --> 00:27:06,520 of consumers, and do it extremely quickly. 451 00:27:08,320 --> 00:27:12,960 Super interesting to me out of kind of out of this bunch, the 452 00:27:13,120 --> 00:27:17,000 intellectually most interesting use case is the is the stable 453 00:27:17,000 --> 00:27:21,160 coin issuance just because kind of it goes to the heart of what 454 00:27:21,160 --> 00:27:25,440 money is, right. So maybe give us some examples 455 00:27:25,560 --> 00:27:31,560 of entities that issue their stable coins through you and 456 00:27:32,040 --> 00:27:37,040 kind of what what kind of usage they see, what they use it for, 457 00:27:37,680 --> 00:27:41,040 how much adoption they have? Yeah. 458 00:27:41,320 --> 00:27:46,760 So, well, first I'll take a step back like why, why does stable 459 00:27:46,760 --> 00:27:51,160 coin issuance need to exist in in our view, you know, today the 460 00:27:51,160 --> 00:27:56,120 market is a is a duopoly, more or less it's USDC and USDT, both 461 00:27:56,120 --> 00:28:00,640 of which have been amazing at building these markets and 462 00:28:00,640 --> 00:28:04,480 building really strong products that have like millions of users 463 00:28:04,480 --> 00:28:07,680 and a ton of adoption. However, neither of those have a 464 00:28:07,680 --> 00:28:11,800 business model or or really an interest that is aligned with 465 00:28:11,800 --> 00:28:15,160 enabling stable coins to be a core payment rail. 466 00:28:15,520 --> 00:28:19,360 For instance, in order to convert USD T into dollars, 467 00:28:19,680 --> 00:28:21,520 Tether charges you 10 basis points. 468 00:28:22,400 --> 00:28:27,920 That makes Tether and economically unviable payment 469 00:28:27,920 --> 00:28:31,280 rail. It is like literally would cost 470 00:28:31,280 --> 00:28:34,600 you many hundreds or thousands or 10s of thousands of dollars 471 00:28:34,600 --> 00:28:38,040 more to move money and settle it into a bank via USDT versus 472 00:28:38,040 --> 00:28:42,000 using U.S. dollars. And the same thing is true of of 473 00:28:42,000 --> 00:28:44,920 USDC. Both of these businesses are AUM 474 00:28:44,920 --> 00:28:47,000 oriented. They keep the yield and so it. 475 00:28:47,920 --> 00:28:51,560 It, it, it, it limits how big this space can be. 476 00:28:52,000 --> 00:28:55,840 And we really think there needs to be, you know, a neutral 477 00:28:55,840 --> 00:28:59,920 platform that is optimized for, you know, payments use cases, 478 00:28:59,920 --> 00:29:03,440 that distributes the economics back to the developers so that 479 00:29:03,440 --> 00:29:05,480 they can build whatever products they want. 480 00:29:05,480 --> 00:29:08,840 They can enable better financial services for their consumers and 481 00:29:08,840 --> 00:29:11,880 make sure that there aren't these burn fees or other other 482 00:29:11,880 --> 00:29:14,000 costs that inhibit payments adoption. 483 00:29:14,480 --> 00:29:18,840 And I think like the duopoly will remain really big and 484 00:29:18,840 --> 00:29:23,120 meaningful and I think there will be this like whole world of 485 00:29:23,120 --> 00:29:27,520 other applications that are built around it that ultimately 486 00:29:27,640 --> 00:29:30,600 over time will be much, much bigger than those two. 487 00:29:30,920 --> 00:29:34,160 Issuing your own save a coin. It was quite the rage for a 488 00:29:34,160 --> 00:29:39,560 while and it seems even as someone who who really has 489 00:29:39,560 --> 00:29:44,120 distribution, distribution such as Metamask, as soon as 490 00:29:44,120 --> 00:29:49,760 incentives go away, kind of the outstanding stables drops 491 00:29:49,760 --> 00:29:52,800 precipitously, right. The diopoly you talked about 492 00:29:53,160 --> 00:29:55,800 kind of the way that I see it as divvied up the word. 493 00:29:55,800 --> 00:30:01,360 So USDC is the US and USD T is everywhere else and kind of 494 00:30:01,360 --> 00:30:04,240 they, they are dominant in their own sphere and somehow it 495 00:30:04,240 --> 00:30:08,160 balances. What do you think has hindered 496 00:30:08,280 --> 00:30:14,520 other USD stables from surging? Yeah. 497 00:30:14,600 --> 00:30:19,400 I mean, so I will answer this question via via an analogy 498 00:30:19,400 --> 00:30:21,080 which is sort of the way I think about. 499 00:30:21,480 --> 00:30:24,560 I think about the the one of the ways in which I think about the 500 00:30:24,560 --> 00:30:29,520 market, there is a history of products that were meaningful, 501 00:30:29,520 --> 00:30:33,280 network effects, products that had huge adoption. 502 00:30:33,680 --> 00:30:37,640 And remained monopolies or duopolies for periods of time, 503 00:30:37,640 --> 00:30:43,400 only to lose over the longer arc of time to more open ecosystems. 504 00:30:43,960 --> 00:30:49,080 And one such example are airline booking systems. 505 00:30:49,560 --> 00:30:54,960 Totally sort of niche analogy, but early on with computers, the 506 00:30:54,960 --> 00:30:59,520 first booking systems that were created first, sort of like 507 00:30:59,560 --> 00:31:02,280 online booking systems were really the airlines. 508 00:31:02,680 --> 00:31:06,680 They airlines put all their inventory into a database and 509 00:31:06,680 --> 00:31:10,400 then booking agents could buy computers that were hardwired 510 00:31:10,400 --> 00:31:12,680 into those databases that could look up those flights. 511 00:31:12,680 --> 00:31:16,520 And you created a 2 sided network where the travel agents 512 00:31:16,520 --> 00:31:20,160 on one side facilitated a ton of consumer demand. 513 00:31:20,520 --> 00:31:24,520 And then whichever was called AGDS system, whichever GDS 514 00:31:24,520 --> 00:31:27,560 system had the most inventory was the most attractive to the 515 00:31:27,560 --> 00:31:30,000 booking agents, which then garnered the most demand, which 516 00:31:30,000 --> 00:31:32,800 then attracted more flights into the booking system and so on. 517 00:31:33,280 --> 00:31:37,360 Anyways, American Airlines created the first GDS system 518 00:31:37,360 --> 00:31:41,560 called Apollo, gained huge adoption, was a huge driver of 519 00:31:41,560 --> 00:31:44,480 their business because they basically put their thumb on the 520 00:31:44,480 --> 00:31:46,160 scale. So if you search for a flight, 521 00:31:46,160 --> 00:31:48,040 American was the first flight every time. 522 00:31:48,920 --> 00:31:53,880 Then then United Airlines built another GDS system called 523 00:31:53,880 --> 00:31:57,360 Apollo. That Apollo gained a ton of 524 00:31:57,360 --> 00:32:00,840 adoption on all the routes where American was not successful 525 00:32:00,840 --> 00:32:02,440 because there was no airline that was everywhere. 526 00:32:02,440 --> 00:32:06,760 So United was in the coast and in Chicago and so on. 527 00:32:06,760 --> 00:32:11,320 And so it gained adoption there. And for about 15 to 20 years, 528 00:32:11,520 --> 00:32:16,360 they just completely controlled the GDS markets. 529 00:32:16,760 --> 00:32:19,640 A bunch of other people tried to compete, Eastern Airlines tried 530 00:32:19,640 --> 00:32:22,520 to compete and, and a few of these other continental tried to 531 00:32:22,520 --> 00:32:25,240 compete. But ultimately they they built 532 00:32:25,240 --> 00:32:28,640 failed systems because they just tried to compete head on and 533 00:32:28,640 --> 00:32:30,880 they didn't have the network and so on. 534 00:32:30,880 --> 00:32:33,200 And over time there was just no adoption. 535 00:32:33,200 --> 00:32:35,760 It was too hard to break into the network effects of United 536 00:32:35,760 --> 00:32:39,200 and so on. However, the European airlines 537 00:32:39,200 --> 00:32:43,720 came around and the European airlines realized they were 538 00:32:43,720 --> 00:32:47,800 never going to use an American or United system. 539 00:32:47,800 --> 00:32:50,640 That's just like completely against that, you know what I 540 00:32:50,640 --> 00:32:52,640 mean? They'd be ceding their entire 541 00:32:52,920 --> 00:32:56,200 business to these American networks. 542 00:32:56,200 --> 00:33:00,240 So the the the. European networks built their 543 00:33:00,280 --> 00:33:07,120 own collective GDS system called Amadeus, and when it launched 544 00:33:07,200 --> 00:33:10,960 they immediately won Europe obviously, and now today Amadeus 545 00:33:10,960 --> 00:33:14,600 is the biggest GDS system. Completely supplanting United 546 00:33:14,600 --> 00:33:16,680 and Apollo. And then when the Internet came 547 00:33:16,680 --> 00:33:19,240 around, a fourth one came around, which was Worldspan, 548 00:33:19,560 --> 00:33:24,200 which serve the Expedia's and so on, which is now also bigger 549 00:33:24,520 --> 00:33:27,920 than Apollo and Sabre. And this all happened over a 40 550 00:33:27,920 --> 00:33:31,560 year period. And so anyways, my as I tie this 551 00:33:31,560 --> 00:33:35,040 back to the stable coin space today, a lot of the stable coins 552 00:33:35,040 --> 00:33:39,440 are launching and just trying to do exactly what, you know, it's 553 00:33:39,440 --> 00:33:42,840 like Eastern Airlines trying to create the exact replica of 554 00:33:42,840 --> 00:33:46,120 Apollo, but doing it with no network effects and five years 555 00:33:46,120 --> 00:33:49,080 too late. And so if a stable coin tries to 556 00:33:49,080 --> 00:33:51,160 do that, it's unlikely to be successful. 557 00:33:51,400 --> 00:33:54,920 And what I think we're going to see and what we are helping to 558 00:33:54,920 --> 00:33:58,880 enable is a bunch of stable coins to compete in orthogonal 559 00:33:58,880 --> 00:34:03,400 dimensions, which we think are completely wide open spaces, you 560 00:34:03,400 --> 00:34:05,920 know the equivalent of Europe right now. 561 00:34:06,440 --> 00:34:10,560 And these stable coins are all going to start small and these 562 00:34:10,560 --> 00:34:12,719 networks that we're building are going to start small. 563 00:34:12,920 --> 00:34:16,639 But if you have a 10 year arc of time or a 20 year arc of time, 564 00:34:16,920 --> 00:34:20,719 the opportunity that we are chasing is so much bigger than 565 00:34:20,719 --> 00:34:25,080 the opportunity you know that that USDC and USDT are going 566 00:34:25,080 --> 00:34:26,800 after. They're going after just defy, 567 00:34:27,080 --> 00:34:28,800 you know they're going after just AUM. 568 00:34:28,800 --> 00:34:31,080 They're not sharing any yield. They have burn fees. 569 00:34:31,400 --> 00:34:34,600 Those markets are much more limited than the global market 570 00:34:34,600 --> 00:34:38,199 for money movement. And so that's the market today 571 00:34:38,199 --> 00:34:41,800 that's small that we hope to win and scale over the next over the 572 00:34:41,800 --> 00:34:44,600 next 10 years. Doesn't answer your question 573 00:34:44,600 --> 00:34:47,239 directly, but like this is the arc of time and I don't think 574 00:34:47,239 --> 00:34:49,400 anybody's going to come around and win tomorrow. 575 00:34:49,679 --> 00:34:53,480 Like I don't think USDC or these network effects things take 576 00:34:53,480 --> 00:34:59,520 time, but we're operating on a very meaningful timeline and we 577 00:34:59,520 --> 00:35:05,960 think like this is an enormous, you know, multi decade sort of 578 00:35:05,960 --> 00:35:08,040 platform shift and how money moves. 579 00:35:08,360 --> 00:35:12,080 And I think we're investing behind the opportunity that we 580 00:35:12,080 --> 00:35:14,760 think is going to be bigger over a much longer period of time. 581 00:35:15,360 --> 00:35:19,480 Tell me about these orthogonal dimensions kind of like this 582 00:35:19,480 --> 00:35:23,480 Europe of stablecoin. So kind of what are what are the 583 00:35:23,480 --> 00:35:28,120 dimensions along which kind of you have to differ in order to 584 00:35:28,120 --> 00:35:33,320 kind of potentially become meaningfully successful? 585 00:35:34,440 --> 00:35:36,880 Yeah, like a a great example is banks. 586 00:35:37,280 --> 00:35:43,080 So today it doesn't make any sense for a bank to use USDC or 587 00:35:43,080 --> 00:35:45,000 USDT. If you think that stable coins 588 00:35:45,000 --> 00:35:47,360 are going to be core financial infrastructure, they have to be 589 00:35:47,360 --> 00:35:51,040 used by banks in some capacity. That's just the way money moves 590 00:35:51,040 --> 00:35:52,480 and settles. Globally. 591 00:35:52,600 --> 00:35:54,840 But a bank is not going to use the existing stable coins, 592 00:35:54,840 --> 00:35:57,880 because if you're using someone else's stable coin, they're 593 00:35:57,880 --> 00:36:00,200 getting all the yield. The deposits are held somewhere 594 00:36:00,200 --> 00:36:02,000 else. On someone else's balance sheet. 595 00:36:02,880 --> 00:36:05,080 And again, there are burn fees, so it. 596 00:36:05,320 --> 00:36:07,600 So it costs more money than than using U.S. dollars. 597 00:36:07,920 --> 00:36:12,160 Like think of a card network settling huge volumes of 598 00:36:12,160 --> 00:36:16,600 transactions via USDC. You know right now it would cost 599 00:36:16,600 --> 00:36:21,400 you more money to settle settle via USDC than it does to settle 600 00:36:21,400 --> 00:36:25,400 on U.S. dollars. So these types of opportunities 601 00:36:25,440 --> 00:36:28,520 are completely Greenfield because the existing stable 602 00:36:28,520 --> 00:36:34,520 coins don't have the underlying structures or economics that 603 00:36:34,520 --> 00:36:38,240 support winning in these spaces. They're being used in those 604 00:36:38,240 --> 00:36:41,440 spaces because everybody wants to do an, a science experiment 605 00:36:41,440 --> 00:36:44,640 to like figure out what could be possible. 606 00:36:44,840 --> 00:36:48,440 But actually scaling adoption necessitates having the 607 00:36:48,520 --> 00:36:52,120 underlying economics that align with that use case and align 608 00:36:52,120 --> 00:36:54,600 with that entity. You know, a bank needs the 609 00:36:54,600 --> 00:36:56,360 deposits to be held at their bank. 610 00:36:56,640 --> 00:37:01,200 A bank needs to be capturing the the Treasury yield to the, you 611 00:37:01,200 --> 00:37:03,200 know, to the extent that's where the funds are invested. 612 00:37:03,200 --> 00:37:06,680 And a bank sure as heck needs to ensure that you know they're not 613 00:37:06,680 --> 00:37:09,840 going to be paying a burn fee when stable coins are converted 614 00:37:09,840 --> 00:37:12,160 in and out. I think you kind of you 615 00:37:12,160 --> 00:37:14,160 implicitly already answered this. 616 00:37:14,160 --> 00:37:18,040 But in crypto we kind of, we have this, this duality of world 617 00:37:18,240 --> 00:37:19,800 views. We're kind of half of the people 618 00:37:19,800 --> 00:37:23,280 kind of believe that crypto will replace banks and the other half 619 00:37:23,280 --> 00:37:27,240 kind of believes that crypto will quietly sit underneath 620 00:37:28,080 --> 00:37:32,000 them. So I I take it you fall into the 621 00:37:32,000 --> 00:37:36,040 latter camp? I, I I fall into the into the 622 00:37:36,040 --> 00:37:36,720 latter. Camp. 623 00:37:36,720 --> 00:37:40,000 But but I mean, I think that even, I think it's sort of both 624 00:37:42,000 --> 00:37:45,000 in the sense that like ultimately, if you look at the 625 00:37:45,120 --> 00:37:49,400 crypto ecosystem and the stablecoin ecosystem, the the 626 00:37:49,400 --> 00:37:53,120 foundation, the base layer of the stablecoin ecosystem are 627 00:37:53,120 --> 00:37:55,480 banks. Because every stablecoin is 628 00:37:55,480 --> 00:37:59,840 backed by, you know, every dollar based stable coin is 629 00:37:59,840 --> 00:38:05,480 backed by dollars and treasuries and it could be EUR and euro 630 00:38:05,480 --> 00:38:09,160 treasuries or whatever. But but those assets are held, 631 00:38:09,720 --> 00:38:11,800 you know, at a bank. And so whether even if you're 632 00:38:11,800 --> 00:38:16,560 die, for instance, you die is predominantly backed by USDC and 633 00:38:16,560 --> 00:38:20,560 USDC is predominantly backed by dollars and treasuries. 634 00:38:21,480 --> 00:38:24,600 So if you tie a lot of these stable coins back to the base 635 00:38:24,600 --> 00:38:28,400 layer. It is, it is a bank somewhere 636 00:38:28,480 --> 00:38:32,880 holding the funds. The, the question is, will 637 00:38:32,880 --> 00:38:36,640 consumers ever engage with that bank the way consumers engage 638 00:38:36,640 --> 00:38:40,760 with the bank today, Today consumers engage at that, at 639 00:38:40,760 --> 00:38:43,240 that bank level, you know, to open a bank account and so on. 640 00:38:43,520 --> 00:38:46,720 And in the future, it's very possible that that all of these, 641 00:38:46,720 --> 00:38:50,080 this crypto ecosystem is built on top of these core banks that 642 00:38:50,080 --> 00:38:51,960 are holding the treasuries and so on. 643 00:38:52,240 --> 00:38:55,760 But a lot of the customer engagement happens through a 644 00:38:55,760 --> 00:38:58,680 wallet. And so you're predominantly 645 00:38:58,680 --> 00:39:01,480 engaging with the stable coin, you're issuing a card through 646 00:39:01,480 --> 00:39:06,880 your wallet and so on through your through your wallet instead 647 00:39:06,880 --> 00:39:11,040 of through traditional bank or neobank or or whatever else. 648 00:39:11,400 --> 00:39:13,000 And I think that's totally possible. 649 00:39:13,000 --> 00:39:16,720 And that's what I mean by both is that like banks will continue 650 00:39:16,720 --> 00:39:18,760 to be important at the base layer. 651 00:39:19,160 --> 00:39:22,400 And I do think more and more consumers are going to be moving 652 00:39:22,640 --> 00:39:26,720 to engaging directly with wallets and in the beyond, just 653 00:39:26,720 --> 00:39:29,800 like the adoption of bridge and the folks who were building on 654 00:39:29,800 --> 00:39:33,600 top of bridge. What you can see and what we can 655 00:39:33,600 --> 00:39:38,080 see as like a great proxy for this is just adoption of crypto 656 00:39:38,080 --> 00:39:43,640 back cards is like a great example of this shift. 657 00:39:43,680 --> 00:39:46,160 You know, why would consumers want crypto back cards? 658 00:39:46,160 --> 00:39:50,640 It's because they're using a wallet as a primary spending 659 00:39:50,680 --> 00:39:53,880 spending account and, and in effect replacing a bank. 660 00:39:54,320 --> 00:39:57,040 And so whether you're using like a Ledger wallet or whether 661 00:39:57,040 --> 00:40:00,320 you're using like a Phantom wallet or whether you're using 662 00:40:00,520 --> 00:40:05,480 Gnosis or whatever else, you, if you're, if you're doing that, 663 00:40:05,480 --> 00:40:07,800 it's like your wallet is effectively becoming a bank 664 00:40:07,800 --> 00:40:15,640 replacement. True in that word where these 665 00:40:16,640 --> 00:40:20,560 kind of 10s of thousands of potentially 10s of thousands of 666 00:40:20,560 --> 00:40:25,800 banks kind of issue with their own dollar stable coins how much 667 00:40:27,600 --> 00:40:31,560 will that still matter So kind of kind of the one of the 668 00:40:32,040 --> 00:40:37,560 hallmarks of the dollar is that there's $1.00 right? 669 00:40:37,560 --> 00:40:41,640 Kind of like there's kind of and it's, it's, they're fungible and 670 00:40:41,640 --> 00:40:45,160 kind of like you, you know what you have depending on kind of 671 00:40:45,160 --> 00:40:49,400 like who these things are issued by, obviously how much they 672 00:40:49,400 --> 00:40:54,040 should be valued at could be very different, right. 673 00:40:54,040 --> 00:40:59,760 So kind of you say you have, you have a Silicon Valley Bank 674 00:40:59,760 --> 00:41:03,680 dollar kind of all of a sudden kind of like it may only be 675 00:41:03,760 --> 00:41:08,000 worth $0.70 or something. And if you kind of if you look 676 00:41:08,000 --> 00:41:15,600 at the clearing technology that kind of we have today, I see why 677 00:41:15,600 --> 00:41:19,840 kind of why kind of this pluralistic ecosystem could, 678 00:41:20,000 --> 00:41:22,800 could emerge. On the other hand, I think I 679 00:41:22,800 --> 00:41:28,720 could also make the case that with prices readily available 680 00:41:28,720 --> 00:41:35,320 for everything, you don't actually need a fungible money 681 00:41:35,320 --> 00:41:39,560 token anymore. You, you could just pay in 682 00:41:39,560 --> 00:41:45,680 fractions of fractionalized S&P 500 or kind of whatever stock 683 00:41:45,880 --> 00:41:48,560 you, you may have. So kind of like this, this kind 684 00:41:48,560 --> 00:41:54,080 of universal layer that monies used to supply us with kind of 685 00:41:54,080 --> 00:41:59,280 like in as how much is it really still necessary while technology 686 00:41:59,280 --> 00:42:01,280 advances the way that it does today? 687 00:42:02,800 --> 00:42:06,480 I think it's a great question and I think it is going to be an 688 00:42:06,480 --> 00:42:09,880 amazing experiment over the next 10 years. 689 00:42:10,480 --> 00:42:14,040 As you know, you have all these different assets that are 690 00:42:14,040 --> 00:42:19,200 tokenized and someone, their primary, you know, you could 691 00:42:19,200 --> 00:42:22,720 have let's like take a card for instance, let's just assume that 692 00:42:22,720 --> 00:42:25,640 a card remains the permanent form factor for the next 10 693 00:42:25,640 --> 00:42:28,440 years. Big assumption, but you know, 694 00:42:28,440 --> 00:42:30,760 you have a, you have a card and then. 695 00:42:31,120 --> 00:42:34,640 Backing that card, you could choose as a consumer to back 696 00:42:34,640 --> 00:42:39,800 that card with dollars or EUR or Bitcoin or gold or tokenized, 697 00:42:39,800 --> 00:42:44,120 you know S&P, you know, token, tokenized stocks or whatever 698 00:42:44,120 --> 00:42:48,240 else you deem to be the store of value that is interesting for 699 00:42:48,240 --> 00:42:50,880 you as a consumer. And it's the first time where 700 00:42:50,880 --> 00:42:55,080 that's like really possible I. Don't know what? 701 00:42:55,160 --> 00:42:58,320 Consumers are going to are going to choose. 702 00:42:58,880 --> 00:43:04,640 To date, it has been hard. To get large scale adoption for 703 00:43:04,640 --> 00:43:10,440 people to use a investment asset as a spending asset. 704 00:43:10,640 --> 00:43:13,440 I would say you know you see that with relatively low 705 00:43:13,440 --> 00:43:16,360 adoption of like Bitcoin for payments because most people 706 00:43:16,360 --> 00:43:19,080 believe the value of Bitcoin is going to keep going keep going 707 00:43:19,080 --> 00:43:21,920 up and and the same thing with gold bucks. 708 00:43:22,080 --> 00:43:25,160 You know they believe the value of gold is going to keep going 709 00:43:25,160 --> 00:43:29,000 to keep going up. However, if you see if all of a 710 00:43:29,000 --> 00:43:32,440 sudden government spending goes, you know, let's say like 711 00:43:32,440 --> 00:43:36,840 American, you know, a dollar has become much less trustworthy. 712 00:43:37,080 --> 00:43:39,400 I could easily envision a scenario where someone would 713 00:43:39,400 --> 00:43:44,280 rather sit on top of tokenized gold or Bitcoin to spend than 714 00:43:44,520 --> 00:43:46,880 U.S. dollars. And it, and it's, and it's going 715 00:43:46,880 --> 00:43:51,720 to become, you know, 10 years ago that was impossible, like 716 00:43:51,720 --> 00:43:59,000 literally impossible. And now it's, it's totally easy, 717 00:43:59,400 --> 00:44:04,480 yeah. That kind of naturally segues 718 00:44:04,480 --> 00:44:10,480 into the non-us dollar stable coin kind of domain, right? 719 00:44:10,480 --> 00:44:18,200 If you look at the volume of stables in web, 399% are U.S. 720 00:44:18,200 --> 00:44:22,160 dollar denominated. Is this is this a temporary 721 00:44:22,160 --> 00:44:26,280 phase do do you think? For sure, it's temporary. 722 00:44:26,280 --> 00:44:29,640 Yeah, Yeah, for sure it is like we see it across our business. 723 00:44:29,640 --> 00:44:35,120 There is immense demand for other tokenized dollar formats. 724 00:44:35,600 --> 00:44:40,200 So tokenized Colombian pesos and Mexican pesos and Brazilian 725 00:44:40,200 --> 00:44:44,800 Reyes and GVP and EUR. There is just immense demand, 726 00:44:45,080 --> 00:44:48,080 but the issuers don't really exist. 727 00:44:49,040 --> 00:44:53,600 So we're just in the Super early innings. 728 00:44:54,240 --> 00:44:59,320 And, you know, it's like, I don't know, like I like to read 729 00:44:59,320 --> 00:45:03,400 a lot of like business history books, you know, and like you, 730 00:45:03,800 --> 00:45:06,320 it's in, in the business history books, they're like, you know, 731 00:45:06,320 --> 00:45:09,360 like the GDS example, they're like telling the history of 732 00:45:09,360 --> 00:45:12,520 these GDS systems over the course of like 30 pages, but 733 00:45:12,520 --> 00:45:16,600 it's 40 years of history. So like, you know, you like fly 734 00:45:16,600 --> 00:45:19,520 through 40 years and it feels like it's this like wildly 735 00:45:19,520 --> 00:45:22,360 intense thing and then you try to zoom out and you're like, 736 00:45:22,360 --> 00:45:24,080 holy crap. That actually it, there was like 737 00:45:24,080 --> 00:45:26,280 5 years where there were no competitors at all. 738 00:45:27,160 --> 00:45:30,680 And then I think about like what people would write about this 739 00:45:30,680 --> 00:45:34,400 moment in time. And right now it feels like 740 00:45:34,400 --> 00:45:37,120 there's no other stable coins that exist. 741 00:45:38,160 --> 00:45:41,480 And I feel like when they write the book of this period of time, 742 00:45:41,800 --> 00:45:44,160 you know, it's going to take like 3 or 4 years. 743 00:45:44,400 --> 00:45:47,240 But like the, you know, the, there's going to be like one 744 00:45:47,240 --> 00:45:50,360 page between their only being USDC and USDT. 745 00:45:50,560 --> 00:45:53,920 And then they're being like, you know, 1000 different, different 746 00:45:53,920 --> 00:45:57,600 dollar formatted staple coins. And we're just like right on the 747 00:45:57,600 --> 00:45:59,680 precipice of it. You see, like we see a bunch of 748 00:45:59,680 --> 00:46:04,400 companies starting in Africa and Asia and LATAM and Europe 749 00:46:04,760 --> 00:46:08,400 starting to build stable coins. And then we need to have the 750 00:46:08,400 --> 00:46:12,240 minting and burning infrastructure that enables very 751 00:46:12,240 --> 00:46:15,120 quick redemptions and conversions so that we could 752 00:46:15,320 --> 00:46:17,640 operationally use these stable coins. 753 00:46:18,080 --> 00:46:20,680 And then when that happens, we need to build the liquidity 754 00:46:20,680 --> 00:46:24,040 between these different stable coins so that we can do all of 755 00:46:24,040 --> 00:46:28,320 our FX and so on at like really high velocity with really solid 756 00:46:28,320 --> 00:46:30,120 depth. And I think all of that will 757 00:46:30,120 --> 00:46:33,680 come, but it will take time. How much do you think that 758 00:46:33,960 --> 00:46:37,240 company issued Staples will be a thing? 759 00:46:37,240 --> 00:46:42,560 So kind of if I think kind of like say, I imagine I'm the CEO 760 00:46:42,560 --> 00:46:47,840 of Amazon or Walmart or something, kind of, I would be 761 00:46:47,840 --> 00:46:52,640 absolutely giddy about the prospect of issuing Amazon 762 00:46:52,640 --> 00:46:56,200 dollars that kind of my customers could hold because 763 00:46:56,200 --> 00:46:59,880 it's an easy way of kind of financing the business. 764 00:46:59,880 --> 00:47:04,560 You can give your, you can give kind of say 5% discount if you, 765 00:47:04,560 --> 00:47:06,800 if you spend Amazon dollars at Amazon. 766 00:47:07,320 --> 00:47:09,840 And kind of how do you think we'll see this? 767 00:47:09,840 --> 00:47:12,640 And if so, when? I mean, I think that all. 768 00:47:12,640 --> 00:47:16,800 Things that are economically rational will be tried and and 769 00:47:16,800 --> 00:47:18,640 then it's just a matter of whether consumers. 770 00:47:18,640 --> 00:47:23,000 Will, will want them. And and so, you know, it's not 771 00:47:23,000 --> 00:47:24,720 that different from Amazon gift cards. 772 00:47:25,240 --> 00:47:28,840 And so is this like a better replacement to Amazon gift 773 00:47:28,840 --> 00:47:29,880 cards? Yeah, probably. 774 00:47:30,720 --> 00:47:32,560 And and so as a result will it exist? 775 00:47:32,800 --> 00:47:34,840 Yeah, probably. And like, is it economically 776 00:47:34,840 --> 00:47:37,640 rational for Amazon to try it? Absolutely. 777 00:47:37,960 --> 00:47:41,320 And so they over time, they probably they, you know, it's 778 00:47:41,320 --> 00:47:45,960 just a matter of like when just over the arc of time, people try 779 00:47:45,960 --> 00:47:47,360 and do things that. Are. 780 00:47:48,440 --> 00:47:51,600 In their, you know, economic, in their economic interests. 781 00:47:52,360 --> 00:47:54,560 I, I do think there's a question of like how this will work for 782 00:47:54,560 --> 00:47:57,400 consumers and like what will the adoption be and so on. 783 00:47:57,400 --> 00:48:01,440 But I think gift cards have the, the best, are the best analog. 784 00:48:01,560 --> 00:48:07,320 And I like for Amazon, for instance, if you issue a stable 785 00:48:07,320 --> 00:48:12,280 coin and you can put it directly in consumer, consumer wallets, 786 00:48:12,680 --> 00:48:16,520 you bypass an immense amount of cost that exists in the gift 787 00:48:16,520 --> 00:48:18,720 card market. You know, you're not, you're no 788 00:48:18,720 --> 00:48:21,240 longer traversing on Visa MasterCard rails. 789 00:48:21,240 --> 00:48:25,120 So you know, all those fees and the bank fees and you know, 790 00:48:25,120 --> 00:48:27,440 prepaid car fees, all of those go out the window. 791 00:48:27,760 --> 00:48:31,080 You no longer dealing with, you know, the distributors who are 792 00:48:31,080 --> 00:48:32,520 sitting. Between you and consumers, you 793 00:48:32,520 --> 00:48:35,280 know, putting these on racks and stores and you know, so on and 794 00:48:35,280 --> 00:48:37,480 so forth. So there's a, there's a huge 795 00:48:37,480 --> 00:48:38,800 amount of savings to be had there. 796 00:48:40,200 --> 00:48:45,200 Yeah, this kind of naturally begs the question, what about 797 00:48:45,200 --> 00:48:47,480 custody? So kind of you also offer 798 00:48:47,800 --> 00:48:53,080 wallets as a service. Is this, this is also for your, 799 00:48:53,760 --> 00:48:55,800 your customers, customers, right. 800 00:48:55,800 --> 00:49:00,080 So kind of why, where do you, where do you kind of see the 801 00:49:00,080 --> 00:49:04,640 trade off between kind of safe custody and and convenience 802 00:49:04,720 --> 00:49:06,600 here? What, what kind of what's the 803 00:49:06,600 --> 00:49:11,960 spectrum we, we you expect to see in in on consumers phones? 804 00:49:13,240 --> 00:49:15,480 Yeah. I mean, we just think wallets 805 00:49:15,480 --> 00:49:17,760 are. You know if if if the. 806 00:49:17,760 --> 00:49:22,080 Future is going to be is going to if stable coins are going to 807 00:49:22,080 --> 00:49:26,600 be like an enormous part of the financial future, then wallets 808 00:49:26,600 --> 00:49:30,440 will obviously be incredibly important infrastructure because 809 00:49:30,440 --> 00:49:33,080 all of these stable coins will have to traverse through wallets 810 00:49:33,520 --> 00:49:37,400 and this is. Sort of why, you know, we we 811 00:49:37,520 --> 00:49:42,720 acquired Stripe, acquired Privy and why sort of what that team 812 00:49:42,720 --> 00:49:45,800 has done is so strategically important for our business. 813 00:49:46,000 --> 00:49:48,560 And I just think for like developers who are who are 814 00:49:48,560 --> 00:49:53,560 building products generally we have have taken the view that we 815 00:49:53,560 --> 00:49:56,520 want to support wallet infrastructure in whatever 816 00:49:56,520 --> 00:49:58,920 format makes the most sense for the developer. 817 00:49:59,320 --> 00:50:02,160 So if they want custodial wallets, we will provide that. 818 00:50:02,320 --> 00:50:07,280 And then Privy is the primary product through which we provide 819 00:50:07,280 --> 00:50:13,320 non custodial wallets. And to date, we have seen that a 820 00:50:13,320 --> 00:50:17,880 lot of companies are just, you know, more comfortable with 821 00:50:17,880 --> 00:50:21,320 custodial solutions given the way some of their architecture 822 00:50:21,320 --> 00:50:23,520 works today. And one of my one of my like 823 00:50:23,520 --> 00:50:27,640 personal frustrations coming from the traditional financial 824 00:50:27,640 --> 00:50:32,240 world is, is especially when we work with some of these 825 00:50:32,240 --> 00:50:35,320 companies who want to adopt stable coins. 826 00:50:35,880 --> 00:50:40,160 You know, are, are you familiar with FBO bank accounts saying 827 00:50:40,160 --> 00:50:43,720 maybe no? OK, so basically every financial 828 00:50:43,720 --> 00:50:48,480 product, because it's so costly to move Fiat, every financial 829 00:50:48,480 --> 00:50:51,600 product that's built today is an FBO account, which means that 830 00:50:51,600 --> 00:50:54,640 it's one account with a giant pool of money in it. 831 00:50:54,760 --> 00:50:58,040 And then there is a company that independently maintains a 832 00:50:58,040 --> 00:51:00,400 Ledger. So like, you know, if you have 833 00:51:00,400 --> 00:51:03,400 your Revolute bank account or you have your cash bank accounts 834 00:51:03,400 --> 00:51:06,400 or you have your Chime bank accounts or whatever, generally 835 00:51:06,400 --> 00:51:09,840 all your money is in one more or less one giant account. 836 00:51:10,360 --> 00:51:14,280 And then there's just a Ledger of like, you know, you know, 837 00:51:14,280 --> 00:51:17,320 $2.00 of this balance goes to Zack and you know, so on. 838 00:51:17,400 --> 00:51:21,040 Obviously in crypto that's like totally unnecessary because it's 839 00:51:21,040 --> 00:51:23,440 trivial, easy to spin up wallets. 840 00:51:23,720 --> 00:51:27,080 And the blockchain is like really good at ledgering, like 841 00:51:27,120 --> 00:51:31,280 extremely good at ledgering. It is like what a blockchain is, 842 00:51:31,360 --> 00:51:34,920 is built to do so. So there should never be a need 843 00:51:34,920 --> 00:51:36,680 for FBO bank accounts ever again. 844 00:51:37,000 --> 00:51:41,440 However, every single fintech that was created five years ago 845 00:51:41,440 --> 00:51:44,640 or 10 years ago, all of their business is built on the 846 00:51:44,640 --> 00:51:46,880 assumption that there is an FBO account. 847 00:51:47,440 --> 00:51:49,760 So one of like my big frustrations coming back to 848 00:51:49,760 --> 00:51:52,320 wallet is like all as a result a lot of these companies. 849 00:51:52,320 --> 00:51:55,360 Need. To stand up a custodial wallet 850 00:51:55,400 --> 00:51:59,480 that stores all the stable coins in one wallet and then they 851 00:51:59,480 --> 00:52:03,760 Ledger it independently, which is like wildly inefficient 852 00:52:03,840 --> 00:52:06,360 because you just don't like, like what? 853 00:52:06,360 --> 00:52:10,640 What are we doing here? But because of where we are in 854 00:52:10,640 --> 00:52:15,320 the adoption cycle, we're kind of this is how companies 855 00:52:15,400 --> 00:52:19,040 currently must adopt. And and obviously the folks who 856 00:52:19,040 --> 00:52:22,760 are coming around and building Neo Bay like a stable Coinbase 857 00:52:22,760 --> 00:52:25,160 Neo bank from the ground up would never do that. 858 00:52:25,160 --> 00:52:28,040 They're spinning up a bunch of custodial or non predominantly 859 00:52:28,040 --> 00:52:30,960 non custodial wallets. Everybody has their own wallet. 860 00:52:30,960 --> 00:52:33,600 They're letting the blockchain do the work and then they have a 861 00:52:33,600 --> 00:52:36,120 team that's like one 100th the size. 862 00:52:36,480 --> 00:52:39,120 To maintain a similar type of infrastructure. 863 00:52:39,520 --> 00:52:45,160 Yeah, it's it's wired how inefficient legacy tag often is, 864 00:52:45,160 --> 00:52:49,440 not just because anyone build it deliberately shoddily, just 865 00:52:49,440 --> 00:52:52,840 because kind of it, it's layer on layer on layer on day. 866 00:52:54,000 --> 00:52:55,360 So. Yeah. 867 00:52:55,480 --> 00:53:01,040 And it's just at it's core it, it's just makes, you know, Fiat 868 00:53:01,040 --> 00:53:04,280 makes this fundamental assumption that moving money is 869 00:53:04,280 --> 00:53:07,680 expensive. And the net result of that is 870 00:53:07,800 --> 00:53:11,120 all of this stuff built around the Fiat system to enable it to 871 00:53:11,120 --> 00:53:13,960 feel like money is moving, but money never actually moves. 872 00:53:14,480 --> 00:53:21,440 And stablecoins and crypto enable money to move, you know, 873 00:53:21,600 --> 00:53:24,800 at more or less no cost, depending on the blockchain 874 00:53:24,800 --> 00:53:27,160 you're using. But you know, if you're, if 875 00:53:27,160 --> 00:53:29,160 you're using a low cost blockchain, it moves more or 876 00:53:29,160 --> 00:53:31,520 less at no cost. And so then, when the movement 877 00:53:31,520 --> 00:53:34,280 of money is phenomenally cheap, a whole bunch of new stuff is 878 00:53:34,280 --> 00:53:38,960 possible. Yeah, what? 879 00:53:38,960 --> 00:53:45,280 What do you see as the biggest risk to the Saber coin ecosystem 880 00:53:46,280 --> 00:53:50,000 right now? I, I would say there are three. 881 00:53:50,480 --> 00:53:58,520 So the first is that we only end up with USDC and USDTI think 882 00:53:58,520 --> 00:54:03,120 this is like a huge, a huge risk to the to the ecosystem that we 883 00:54:03,120 --> 00:54:05,960 are building. And I think that if we only end 884 00:54:05,960 --> 00:54:08,160 up with those two stablecoins will be much bigger than they 885 00:54:08,160 --> 00:54:09,480 are today. And those businesses will 886 00:54:09,480 --> 00:54:13,440 obviously be wildly successful. But none of the economics will 887 00:54:13,440 --> 00:54:15,960 go back to consumers because they're going to be a duopoly 888 00:54:15,960 --> 00:54:19,760 and why would they do that? These payments use cases are not 889 00:54:19,760 --> 00:54:22,440 going to be economically viable because they don't want high 890 00:54:22,440 --> 00:54:24,680 velocity of money. They want static AUM. 891 00:54:25,480 --> 00:54:29,840 And so stablecoins will only realize one, one thousandth of 892 00:54:29,840 --> 00:54:32,600 their opportunity. And it's really, you know, as 893 00:54:32,600 --> 00:54:36,960 much as it makes economic sense for there to be 1/3 or 4th or 894 00:54:36,960 --> 00:54:41,200 5th or 6th or what have you, it's that you can't take it for 895 00:54:41,200 --> 00:54:43,320 granted like it does it. Somebody has to build it. 896 00:54:43,320 --> 00:54:45,360 The future has to be created by someone. 897 00:54:45,760 --> 00:54:51,360 And, and we're certainly trying. The second major risk is 898 00:54:51,360 --> 00:54:56,640 regulatory like we're we're all downstream of regulatory 899 00:54:56,640 --> 00:54:59,520 requirements and to believe otherwise would be crazy. 900 00:55:00,000 --> 00:55:06,040 And, you know, we have seen what European regulation has done to 901 00:55:06,040 --> 00:55:08,920 slow the growth of European stable coin market. 902 00:55:09,280 --> 00:55:12,520 And it's been really hard to get that market catalyzed in any 903 00:55:12,520 --> 00:55:16,640 meaningful way. And, you know, the US is being 904 00:55:16,640 --> 00:55:18,840 litigated and re litigated. We saw genius. 905 00:55:18,840 --> 00:55:20,640 And then we have market structure and the community 906 00:55:20,640 --> 00:55:22,840 banks are fighting and the big banks are fighting. 907 00:55:22,840 --> 00:55:25,600 And everyone's saying that stable coins are going to 908 00:55:25,600 --> 00:55:29,880 destroy, you know, you know, going to going to take away all 909 00:55:29,880 --> 00:55:32,080 local businesses because community banks are going to go 910 00:55:32,080 --> 00:55:34,480 away and there's going to be no lending and you know, so on. 911 00:55:34,480 --> 00:55:39,680 So it's like a whole, you know, thing that's going on right now. 912 00:55:39,800 --> 00:55:46,080 The third major risk is Deepak is you know, one of these one of 913 00:55:46,080 --> 00:55:49,240 these two or, or if there's a third one that gets really big 914 00:55:49,240 --> 00:55:52,280 or something. But you know, the we're still at 915 00:55:52,280 --> 00:55:56,480 this very fragile point in the market where the trajectory can 916 00:55:56,480 --> 00:56:01,600 be materially shifted by some major erosion in in trust. 917 00:56:01,920 --> 00:56:06,040 And so I think those are those are probably like the big. 918 00:56:06,520 --> 00:56:09,200 Risk right now. Are there any that you think of 919 00:56:09,200 --> 00:56:15,680 that that I missed? Over reliance on the US dollar. 920 00:56:16,840 --> 00:56:20,800 So I mean kind of like if if you look at the the global 921 00:56:20,800 --> 00:56:28,800 geopolitical situation, it seems unwise to kind of have 99% of 922 00:56:29,080 --> 00:56:32,120 the stables market denominated in U.S. dollars. 923 00:56:33,640 --> 00:56:37,040 I totally I totally agree and we are like. 924 00:56:37,600 --> 00:56:41,480 We want, we just want, like as many folks in as many countries 925 00:56:41,480 --> 00:56:44,840 to be building as many stable coins as they possibly can and 926 00:56:44,840 --> 00:56:49,000 as quickly as possible. Quicker than USD one. 927 00:56:50,040 --> 00:56:59,120 So I mean, Bridge is not a very old company, so you might not 928 00:56:59,120 --> 00:57:02,520 have a lot of regrets, but kind of like if you were to kind of 929 00:57:02,520 --> 00:57:06,840 start over again today, anything you would do differently? 930 00:57:07,480 --> 00:57:11,880 I would say a lot of our regrets stem from a similar behavior, 931 00:57:12,280 --> 00:57:18,600 which is that it was it was so hard to start our company. 932 00:57:18,600 --> 00:57:22,320 And, and like, I think that I don't know how folks listen to 933 00:57:22,320 --> 00:57:24,800 this might think of our company or what have you. 934 00:57:24,800 --> 00:57:29,280 But like you, you know, there was like a whole year where we 935 00:57:29,280 --> 00:57:34,080 did nothing but fail, like, you know, and, and everybody and at 936 00:57:34,080 --> 00:57:37,840 the same time, the entire crypto market was just a complete 937 00:57:37,920 --> 00:57:40,920 wasteland. I mean, this was Terra Luna 938 00:57:40,920 --> 00:57:45,200 happened and then FTX happened and then SVB happened and USDC D 939 00:57:45,200 --> 00:57:48,720 peg and it was like people were like, what are you even doing 940 00:57:48,720 --> 00:57:53,760 wasting your life building? Literally nobody is going to 941 00:57:53,760 --> 00:57:57,000 going to use this. And so we were kind of like 942 00:57:57,000 --> 00:58:01,480 children of the Depression, where like our, our like 943 00:58:01,520 --> 00:58:06,640 cultural norms as a company were shaped by scarcity. 944 00:58:07,760 --> 00:58:11,840 And we were constantly fearful that like the market was going 945 00:58:11,840 --> 00:58:16,720 to go away. And that resulted in constantly 946 00:58:16,720 --> 00:58:22,360 being behind customer demand and when the business really started 947 00:58:22,360 --> 00:58:26,720 working. And so we found ourselves like 948 00:58:26,720 --> 00:58:31,000 scrambling from like issue to issue to issue. 949 00:58:31,000 --> 00:58:35,120 And it was like so interesting for us because like we looked at 950 00:58:35,120 --> 00:58:39,000 the business and we were always like this could all fall apart 951 00:58:39,000 --> 00:58:41,440 tomorrow. And our investors look to the 952 00:58:41,440 --> 00:58:44,160 business and they were like, what are you guys talking about? 953 00:58:44,160 --> 00:58:47,240 Your business is going so well. This is like one of the best 954 00:58:47,240 --> 00:58:49,320 companies that we've seen in a long time. 955 00:58:49,720 --> 00:58:52,880 And we can never get it through our head, which which enabled 956 00:58:52,880 --> 00:58:56,280 us, which which forced us to like under higher, you know, and 957 00:58:56,280 --> 00:58:59,080 we really, you know, redline the team. 958 00:58:59,080 --> 00:59:02,880 It it caused us to invest, you know, behind a bunch of a bunch 959 00:59:02,880 --> 00:59:05,120 of demand. It caused, like me mentally be 960 00:59:05,240 --> 00:59:09,440 to be, you know, never sort of quite realizing where bridge 961 00:59:09,440 --> 00:59:11,560 was. And it's sort of like arc of 962 00:59:13,080 --> 00:59:16,160 it's it's sort of like journey and building a company that's 963 00:59:16,160 --> 00:59:21,040 probably like not one thing, but a theme of things that 964 00:59:21,040 --> 00:59:23,840 consistently. Plagued us over the last couple 965 00:59:23,840 --> 00:59:27,720 years. I let it stand, although kind of 966 00:59:27,720 --> 00:59:31,560 like it it, it veers into humble brag territory. 967 00:59:31,800 --> 00:59:38,840 But Zach, where, where, where can people follow your work and 968 00:59:38,920 --> 00:59:41,120 learn more about what you and Bridge are building? 969 00:59:43,080 --> 00:59:47,200 Visit us at bridge dot XYZ. If you're interested in using 970 00:59:47,200 --> 00:59:50,240 the product, you can sign up there and then you can follow me 971 00:59:50,240 --> 00:59:53,840 on Twitter. I'm just ZC Abrams and then 972 00:59:53,840 --> 00:59:56,560 bridges handle is at Stableport so follow us. 973 00:59:57,720 --> 01:00:00,320 Fantastic. Thank you so much for coming on. 974 01:00:01,080 --> 01:00:03,080 Yeah, thank you for having me. This is very fun.