The End Game For Stablecoins With Edward Woodford

Transcript

Stable coins are an alternative payment method as it as is like a huge use case. Um, and if you want a technology multiple, you have to think about how you actually use this. Otherwise, you look a lot more like a bank, but yet a bank actually is better economics than for example circle because circle's not a bank. So, I think if you look at this kind of people talk about the stable coin sandwich, I think if you look at the the layers, uh, you know, Coinbase is is a really really great position uh with those two pieces. Hey everyone Jason here. I'm excited to announce that today's sponsor, Petra, a top non-custodial wallet developed by Aptos Labs, just launched Earn, a new feature to access DeFi with just one click. Earn lets non US users deposit USDT directly into Aries Markets lending pools and

manage it all directly from the Petra wallet. This is not financial advice. Participating in DeFi does carry risks. To learn more, visit petra.app/earn. I wanted to take a moment to tell you about Focal by Falcon X, the AI powered insights engine built for institutional crypto. By leveraging AI, Focal empowers institutional investors to streamline research anticipate market shifts, and make sharper investment decisions. You'll hear more about Focal later in the show. All right, everyone. Welcome back to Empire. Very excited about this one.

We have Edward Woodford, the co-founder of Zero Hash, CEO, co-founder. I think I'm getting that title right, but Edward, welcome to trail, man. There we go. Good to see you. Yeah, you, too. I was looking back at the uh calendar to see the the the first time we ever met. It was October 2018. Wow. At Palm's office. You remember that? I do. I do. Yeah. I remember flying in for that podcast cuz it had to be in person. I remember landing like it was delayed 2:30 and I turned up at like 8:00 a.m. I think it Yeah, exactly. It was I would like to listen back to that. It'd be kind of interesting. You definitely don't want to listen back. I can assure you. You never want to listen to old episodes. as someone who's made that mistake, you're like a cringe. Um well anyway, so I I wanted to make this

episode um about the business behind stable coins. And the context here is um C uh you know, Circle's IPO just uh they they announced their IPOing, so they had to file the uh I think it was the S1. So a bunch of their numbers got revealed. Very interesting. Uh Tether's obviously making the rounds right now. Paulo's kind of doing the podcast tour talking about some of their their numbers. I think everyone knows how big they are. uh stable coin legislation is coming. So stable coins are like the topic to not enough people I think look under the hood of these businesses. So I wanted to have you on and just for people who might not be familiar with uh with you and for Zero I think I'll kind of you know hype you up a little bit more more stable coins flow through you guys than

than most companies. You guys do several billion of mint and burn every single week across the stable coin landscape. you guys have, you know, you work with the Black Rocks and Franklin Templetons and Stripes and Khis and Interactive Brokers of the World. Can you just give us uh maybe just 30 seconds at the top to just maybe give the context of what Zero Hash is for people who don't know? Yeah, absolutely. So, we're we're like an infrastructure layer to make it really really easy to abstract away all the complexity around stable coins and crypto. So, we take on the regulatory burden, we also take on the technical burden, right? So, you know, if I'm looking to send you a stable coin, you might be on one chain, I might be on another. How do you abstract away that complexity? Secondly, you know, groups like Koshi don't want to think about

hey, I now need to buy a fraction of Salana to be able to accept a stable coin. So, we abstract that all away. Our goal is to make this a really, really accessible mechanism for payment and store value. That's really what we do. Nice. Okay, let's talk about the business of stable coins. So, maybe we can get right into actually let's start with can you just walk me through because a bunch of different ways you could make money as a stable coin provider, right? There's um you know there's being an issuer which you guys have chosen not to be an issuer. Um there's kind of the infrastructure layer like walk me through the how you see the business model of stable coins. Yeah. So I I really break down this landscape um in terms of like layers and so you obviously have blockchains right so you

know Ethereum you know Coinbase has launched their own blockchain. Then you've got the issuance business itself. So that would be for example a circle. Um and then obviously you've got the infrastructure layer on top which is where zero hash plays and you've got applications on top of that. What I think is really interesting is if you look for example Coinbase, Coinbase has effectively gone into the infrastructure business. They've gone into the application business and then obviously year and a half ago, two years ago they launched the blockchain business which is effectively base. And so I think it's really interesting where do you play in that stack? Um another example is like Ripple, right? Ripple launched RLUSD. So they're in the issuance business, but they also have their own chain as well right? Which is, you know, you know XRPPL. And so they've launched on XPR

XPRL. My my view is you you've got to play in multiple multiple of those stacks. Um, you know, we've intentionally not gone into the issuance business for a bunch of different reasons. Can we start talking about Circle? So C so um had their IPO filing. Um, let me just look at some of I'll I'll I'll read some of the numbers like revenue up 15% year-over-year. Um adjusted IBIDA down 28%. Net income down 42% to 157 million. Uh, USDC circulating supply up 80%. Uh, 24 billion to 44 billion. So, the headline numbers right out of the gate, they feel good, right?

But when you start looking under the hood, you start to see gross margins are starting to get crushed, right? High distribution costs. Yeah, tell me how you think about um circle as a business model. Yeah, I think what's really interesting, right, is there's always going to be this dichotomy and challenge in some way. Like one of the stats that they don't talk about is like um you know total pro process volume, right? Like TPV. So if you look at like a payments business like a stripe or a shift 4, they talk about TPV and right now they're not talking about TPV because they don't make money um by processed volume. The people that are making money by that are the chains. So for example, bass. So what I think is really interesting when you look at that model, effectively Coinbase has created this this um this kind of sandwich

between Circle, but the meat the fill in is really really thin for Circle and being the application layer and the infrastructure layer and the and and the base layer effectively with the with the with the blockchain stack, you got really chunky margins there. I mean they're the ones that are making the money and that's my view is that stable coins are an alternative payment method as a as like a huge use case. Um, and if you want a technology multiple, you have to think about how you actually use this. Otherwise, you look a lot more like a bank, but yet a bank actually is better at economics than for example circle because circle's not a bank. And so they can't, for example, do fractional uh fractional lending, which is effectively how bank banks make their money. So I think if you look at this kind of people talk about the stable

coin sandwich, I think if you look at the the layers, uh, you know, Coinbase is is a really really great position uh with those two pieces. So they've got the blockchain, they've got the distribution circles in the middle. They're the issues. Very very thin. Exactly. Very thin. Um I mean two two/3 of the revenue obviously goes back to Coinbase which effectively is passed through as rewards. Um or Coinbase is keeping some portion of that. And then if you look at for example the distribution of of base um in terms of actually process volume I think bass has gone from basically 0% to now close to 50% of process volume which is pretty incredible. I mean bass is clipping a tiny fraction on every single transaction. And that's what I find interesting, right? Like the big headline number is um effectively assets under custody whereas total USDC supply

that number that you see going up. Yeah exactly. Whereas to me supply will naturally go up as use cases expand. And so one of the things I did recently I was like who actually are the biggest holders of of of USDC? Who are the big and like one of the biggest holders online is like you know the Indian earthquake foundation. Like it's like why why are people holding this this this asset right? And so, um, it it's it's it's an interesting one. I think I see what you're getting at, which is maybe someone like Circle wants the use case of a stable coin like USDC to be payments, but really it's the Indian Earthquake Foundation who's not holding it for payments. They're holding it as a store value. Yeah. Store val. Yeah. I mean, look, it there's always this in inevitable Tether versus uh, you know

USC trans, you know, comparison. Um to me um the tether's effectively won the store value game largely right um and if you look at but it you know circle how is circle going to make money from transaction volume I think that's the biggest piece and in some senses they've tried to make it more difficult right so it's public that for example they've introduced a um you know a burn fee my view on that is if you make it more difficult to get out of um of something people are less likely to hold it I think it's actually a counterintuitive incentive structure and actually a great analogy of this I actually been reading quite a lot about this is around ATMs h so there was the view when banks a few years ago when when banks you know

started launching ATMs there was a big fear hey everyone's going to take the money out more quickly and easily what actually happened is people held more money at the banks because they were more easily able to get cash out and I think that's an equivalent analogy if you make it more expensive and there's a friction of getting out of a stable coin I think you're less likely to actually drive up adoption because people like Oh, I don't want to have to pay or I don't want there to be a friction at that point. So, I actually think that the burn incentive structures um are going to be counterproductive and from a revenue perspective, it's absolutely marginal in terms of a revenue line item. Um and I think it opens up opportunity to other stable coin issuers. I mean, Ripple's come in doing you know, no fees on on on redemption.

Uh say say more about the burn incentive model. Yeah. So, it's I would say it's burn disincentive model or burn disive. So, it's a 10 bit fee on um on burnin right? Uh for the I think it's called like the instant the instant redemption method. And I think if you're happy to wait two days, I think it's it's zero bips. Yeah. So, I to me it's a it's a disincentive to effectively burn. But a lot of use cases, right? Like they you know, Circle announced for example a partnership with ICE, right? The intercontinental exchange which owns NY um you know, as a collateral mechanism.

Collateral by its nature is going to be liquidated at some point. That's a burn function. If you look at, for example Sony, the big announcement with Sony what is payments? If I'm paying with a stable coin, that is a burn. So, what you're doing is you're increasing the cost for those sorts of burn use cases which I think disincentivizes actually being able to hold large amounts of um you know, USDC. It also disincentivizes payments, right? Exactly. Payments is a burn use case. Hey everyone, earlier in today's episode, I mentioned Petra, a top non-custodial wallet developed by Aptos Labs. They just launched earn, a new feature to access DeFi with just one click. Earn lets non- US users deposit USDT directly into Aries markets lending

pools to gain interest and rewards and manage it all directly from the Petra wallet. Petraearn was designed to make DeFi more accessible for everyone. You can manage your balance, claim rewards and deposit directly from the app. This is of course not financial advice. Participating in DeFi carries risks. To learn more, visit petra.app/earn or by hitting the link in the description of today's episode. I wanted to take a moment to tell you about today's sponsor, Zenrock, the permissionless decentralized custody network backed by one roundtable partners 10T, Maven 11, and Spartan. Now available on Jupiter. Rock is the native token for transactions within the

Zenrock ecosystem and secures Zenrock's decentralized custody network. The first application launching on Zenrock is ZenBTC yieldbearing Bitcoin on Salana. ZenBTC will be live in April 2025. To find out more, you can follow Zenrock on X or click the link in the show notes. Yeah. Okay. So, what do you do if you're in circles shoes right now? Because just running through some of the numbers right? Um uh, you've got your gross margins getting crushed with distribution costs. um core US market is being deregulated and banks and financial institutions are about to kind of crash this party which was this kind of uh duopoly of circle and tether um you're spending over 250

million a year in compensation anotherund 140 million a year in GNA um uh you've got uh net income's down 42% adjusted EVA is down 28% they earned 1.7 billion in revenue in 2024 but had to pay out 900 million to Coinbase as a distribution partner. What do you do if you're in circle shoes right now? Yeah. I mean, I think the bank aspect is going to be really powerful, right? I mean, I spoke to a circle board member and I said, "Is is is table good for you?" And they were unclear, right? And so, if it if if it was me, I think you you either look towards um becoming effectively a partner for all the banks, right? And so you let them effectively white label

USDC. Um slash I think that you effectively try to make a very very small transaction uh transaction fee. I think that's ultimately where you're going to make money, right? And I if if if if stable coins become more more present, it's going to be a transactional business, right? Um interest rates are going to come down. Um that's going to crush crush crush revenue even more. And then people are looking at you not from a tech a tech multiple or payments multiple, right? like a PayPal or Stripe kind of multiple or Adion mods multiple they're giving you effectively like a bank multiple but even discounted from the bank because you can do less with that money that you're holding that that's my sense of what you do is you fundamentally shift the way that you try to make money away from a purely interest rate driven

business yeah I was looking at the valuations so Coinbase is trading at um if you're looking at adjusted IBIDA Coinbase is trading at 16x PayPal 10x uh Visa's 27x Mastercard 28x Um if circle what what's the range for the valuation? I think it was 4 to6 billion that I saw for for an IPO that would imply a multiple of like 13 to 20x feel cheap feel expensive deal to me that feels expensive right just for exactly the the comps that you gave. I mean, I think better comps are right looking at, you know, Moscow and Visa traded at multiples because they're effectively it's an oligopoly, right?

Um, and then Coinbase, if you look at where you think you make the money right, in terms of those four layers that I outlined, um, they're trading there. So, I think it's better to look at like a bank multiple, um, and then effectively take a discount from there is effectively the way that I view it. I mean, obviously, Circle has built some good technology around it. But it was interesting, right? Like I listened to a similar podcast with Laura Shin, right? and the you know the the the argument was that the the the expenses were from um compliance. I'm curious how many people are actually in compliance especially since Circle's changed its model, right? Like a year and a half ago, more and more people could effectively mint and burn directly with Circle. Effectively, they took a decision not to do that. A bunch of

different reasons why it's it's it's less costly from a compliance perspective. You only need to manage a few kind of like warehouse partners or distribution partners. Um, so I don't know if the costs are coming from compliance to be completely honest. Um so that's kind of my take on it. What's it like working with Circle as a as one of the I mean I I don't know if it's fair to say as one of their biggest partners, but I mean you guys are doing several billion of mint and burn. I know this isn't just with USDC across USDT and other stables as well, but what's it like working with them verse maybe working with someone like Tether verse you know, we're only talking about those two right now, but I'm also curious there's uh Sky obviously has um you know, their stable coin, Athena has

theirs. Like what's it like working with the different stable providers? Yeah, I think what circle's done really really well is build out some really strong banking relationships, right? So, for example, um BNY Melon is obviously a really strong partner and I think I I think people often think of things in very binary terms. The beauty of being on BNY for example is that you can embed into RTP. So, real-time payments and so for example, what are real-time payments? So, realtime payments is effectively an interbank ability to move money 24/7 as well. And so this is effectively in some degree a competitive competitor to stable coins. But RTP effectively what that means is I can move money from BNY Melon to for example [ __ ] Harris or JP Morgan. So the bank has dumb dumb question. Is that like Swift?

Uh no. So it's like it's it's it's um it's its own network that started to be rolled out effectively allowing you can only go up to $10 million clips right now for Oh, this is a stable coin native. It's not even No, it's not stable coins. It's it's effectively being done by the Fed. So it's banks moving money between each other 24/7. Why that's interesting with BNY is I'll give you a real example. So we receive USDC for a Koshi customer. Kawoshi wants to receive dollars because they're a clear in-house under the CFTC oversight and they want to receive dollars. I need to get those dollars to Koshi 24/7365. And so the beauty of being, for example, BNY is I can liquidate into uh dollars because I can mint and burn with Circle at BNY and then I can send effectively a dollar transfer 247 to um

it's more like a institution. So So a customer basically, so I want to trade on Kelshi. I'm going to send you USDC. Y uh I'm going to send you USDC. Yeah. Or I'm going to send it to Kelshi. No. So you actually you actually So yes, I'll give you What's happening behind the scenes is I just want to make sure I kind of understand this. No, makes a lot of sense. I mean, and we're going to be rolling this out with a bunch of different partners like Tasty Trade and some of the largest brokerage firms, but effectively um if you go to Koshi today and you want to, you know, so let's say you want to speculate on March Madness right? Or you wanted to speculate on some political contract. Effectively what happens is you create an account at Zero Hash. It's all completely embedded

and seamless, but that USDC is actually legally coming to Zero. We then convert that USDC or any other asset um into dollars and then we then so you have a dollar balance with zero hash for a fraction of a second and then we give the dollar balances to KI. So you go from saying having a,000 USDC to having a,000 USD under 30 seconds. So it's a seamless mechanism. So for example with the election um that happened you could trade all the way up and fund your account all the way up to the results. Um and also a takes two days and there's limits on that right. So the benefit for a group like Koshi of using stable coins is non-reversibility, right? So the amount of fraud in just generally in payments is huge. So the ability to not have to worry about reversibility allows you to

do much larger clip sizes. Who is making money in that flow? So you've got BNY Circle, Khi, Zero. Who's making the money? Yeah. So we charge a transaction fee. Um and the transaction fee is um you know it's attractive. You're charging that to Khi or to the customer. Okay. Yeah. So the end customer. So it's, you know, I think it's 40 basis points. So, that means if you do $1,000 um, you receive $996, right? And that's cheaper than a wire. It's instant. It's 24/7. It's 365. And most of the customers that are doing this, I'm trying to fund a trade where I think I'm going to, you know, 2x my money on an eventbased trading. So, I don't mind paying for $4. Now, for other use cases that we power, the margins are

a lot thinner because the value proposition. So, I think it's not about fees, it's about value proposition. And that's why I think people need to think about. So we're we're making money on the transaction, right? But again that's a net burn activity. But my view on this is that stable coins become this alternative payment method that any bank in the any bank in the US can enable this. So you have this seamlessly. So you're holding dollars because you as a US person, it makes sense for you to hold US dollars. In my mind, safety, you know, FDIC insured. You can use it for other mechanisms. So then you say, hey it's Saturday morning. I want to place a bet on um Koshi. Okay, I've got you get paid into your Chase account. You basically say, "Okay, I'm going to move into stable coin instantly." So that's a

a mint. It goes on chain under 30 sec you know, under 10 seconds and then we immediately burn it. So there's going to that's why I think of this much more in terms of APM structures. That's where we're seeing true size and true volume is in actual um value propositions around where it makes sense for it to be instant. It makes it sense to be 24/7. So you know in that instance, what is what's what's what's happening for Circle? there's a mint and there's a burn within under a second. So, they're not really making money on the interest right? Because there's only USDC for a fraction of a second. And that's why I think they need to move more into a transactional business. What What would that look like? They could charge a fraction of a, you know, a fraction of a bip on every transaction, right? Um

similar to how other payment companies do it. I mean, if you're looking to send USDC on ETH, right, the ETH network's making money. I mean, I think, you know I I don't know if Circle should la its own chain, per se, right? But um I think that effectively there should be a tiny fraction on every single payment. Well why should I This is one of the things I was actually thinking about going into this conversation is uh shoot, what's the name of that? Codex, I think, just raised. Yeah. And they're a chain for stable coins. Yeah. And then Tether just launched effectively their own chain with um Plasma I think it's called. Um and obviously if you look at like Tron like basically Tron is the Tether chain right now. Eventually Plasma becomes the Tether chain. Um, I saw Circle Ventures

invested in Codeex. Should Circle launch their own chain? I think from a transactional business, right, if stable coins are a transactional business, you make more money by being by having a revenue structure that is a transactional based. I think the reality of it as to why maybe circle wanted to be a little bit more hands-off is if you look at their balance sheet, right? They've taken incentives effectively from different blockchains, right? Um and potentially that's a good, right? get paid, you know, says, "I want USDC on this chain. I want to accelerate it. I want it. I want it now." Yeah. And that's what I thought was funny about like crypto Twitter like, "Hey, Circle, super bullish on XYZ." And it's like, "No, no no. I don't I don't I don't think that's the they've just been they've effectively received an incentive from

that from that foundation, right? The protocol will go pay them to bring us." Exactly. Yeah. Hey everyone. Earlier in today's episode, I mentioned Petra, a top non-custodial wallet developed by Aptos Labs. They just launched Earn, a new feature to access DeFi with just one click. Earn lets non- US users deposit USDT directly into Aries Markets lending pools to gain interest and rewards and manage it all directly from the Petra wallet. Petraearn was designed to make DeFi more accessible for everyone. You can manage your balance, claim rewards and deposit directly from the app. This is, of course, not financial advice.

Participating in DeFi carries risks. To learn more, visit petra.app/earn or by hitting the link in the description of today's episode. I wanted to take a moment to tell you about today's sponsor, Zenrock, the permissionless decentralized custody network backed by one roundt partners 10T, Maven 11, and Spartan. Now available on Jupiter. Rock is the native token for transactions within the Zenrock ecosystem and secures Zenrock's decentralized custody network. The first application launching on Zenrock is ZenBTC yieldbearing Bitcoin on Salana.

ZenBTC will be live in April 2025. To find out more, you can follow Zenrock on X or click the link in the show notes. So, another part of this S1 was uh so USDC held on Coinbase. Coinbase takes 100% of the net interest. USDC held on outside of Coinbase 50-50 split between Circle and Coinbase. USDC held by other partners like a Binance for example. I'd guess it's probably a 50/50 split on the interest after someone like Binance takes their share. Yeah. Um what do you think the future of the revenue sharing model on this interest goes into? We had um Chad from Paxos. Yeah. And Nathan from Anchorage on the podcast. Yeah. And this was big conversation uh topic of

conversation I'd say is like the fee basically the fees that they can that c someone like circle can take and even tether too just has to go down over time. How do you think about that? Yeah I mean it it it it does right I mean I think interesting goes to partners distribution part partners or it goes to the end customer. I mean again it looks like a lot more like a banking banking setup right and banks you know are great some the title of this podcast should just be circle is just a bank. Is that what you're getting at? I I would say a discounted bank, right? Like that's that's how you should that's how you that's how you should think about it right? If you look at their pure revenue structure, right? Um I think that happens a lot in crypto though, right?

Like if you look at like Falcon X, it's a trading firm. It's a it's a prop shop and people talk about it like as the Google of of of trading. No, no, no. Like if you look at the only public markets on Falcon, like publicly traded comps, it's like Veru and a couple of others. They trade at 1x book value. No don't tell anyone. Don't tell the VCs about that. Yeah, I know. And the same thing here. So I think there's like there's this great thing in you know in in in in in cryptovc that people just reframe and they say I'm a tech company or I'm this and they it's kind of a distorted reality. If 99% of your revenue comes from interest you are effectively a bank but actually you can do less than a bank. So in my mind the banks win. I I do think it's interesting

how this space plays out. Like do you have JP Morgan coin and all these other constructs and other pieces? Uh let's go there. I winner winner. What what is this? So, we've got stable coin legislation coming out. Banks get into this. Robin Hood launches a stable. Uh Fintex launched stable coins. I would guess that even the tech companies like I would I don't know what happens, but someone like Meta, Facebook, like you got to imagine they're thinking about launching a stable coin. What does this game look like? I mean, yes, to some degree, but I I don't think they're going to be making I I think the risk that you that that you have here is that you create a lot of ward gardens, right?

Almost like the app store. um you create all these little ward gardens and all these systems can't talk to each other and that just creates more fragmentation and it actually distort like think what's happened in the last two years in stable coins. We went from having you know three or four chains on maybe two or three dominant players and that was complex enough. Now we've gone to 15 to 20 different chains let alone the bridge version versions and then you've now got like you know more more more stable coins than you have letters in the alphabet. So you're probably going to have to go to the Greek alphabet. I'm looking forward to that one coming out.

And it's incredibly fragmented. I mean think about the usability story. I let's say, you know, you bought me a coffee and I want to pay you for that. We've got to think about chain. We've got to think about asset. And that's why I think the big unlock in stable coins that we need to think about. I think we've done a there's a there's the story of distribution is going to be there now, right? With the stable coin bill passing, distribution is going to be every single bank is going to have access to a stable coin now and that's just going to increase. Um and I think there already is great distribution. Like if I say sometimes in the last 18 months 750 million people want to have access to a stable coin through a primary account and a primary account is where people hold money. So if you look

at um you know Revolute, Robin Hood, New Bank, PayPal, Venmo and that's what Stripes that's what groups like Circle have done exceptionally well. It's getting this distribution but distribution doesn't necessarily allow you to monetize but it also hasn't allowed you to solve the usability challenge that exists in payments. Like we see this, right? Like people send on the wrong chain, they send the wrong asset. And so one of the things that we're really investing in is solving the usability challenge and abstracting away the complexity of chains and assets and allowing me to think about account to account. I'm sending money to Jason. That should be the end of the story, not hey what what chain are you on, bro? Oh I'm on this chain. I don't have Oh okay. Now we need to like that doesn't make any sense. That is not it feels in

very I I actually feel like I have a decent grasp of what the endg game will feel like which is I'm maybe not the endgame but the the three to fiveyear game is I do think there's going to be a proliferation of stable coins RLUSD pyd all the I I think there'll be dozens of these stable coins maybe hundreds who who knows probably dozens that act that that actually get some real adoption. Yeah. Um and everyone's going to hold different stable coins. Like you might hold RLUSD I'll hold USDC. Guy next to me holds USDT. The the person on the other end needs to just be able to accept. They don't need to be able to accept everything. There needs to be an infrastructure player. Yeah. Uh like we had mesh on the podcast. I'm guessing

you guys do the do this too where it's like I can send you PYUSD even if you only accept USDC. Yeah. and there's just some conversion that happens and not I I never know about it as the user. Yeah. I mean basically what you're doing there is you're disintermediating the Visa and Mastercard and that to me is like the story that this you know that a group like Circle should be telling is like we're going to completely fundamentally disrupt the concept of interchange um and we're going to make it completely interoperable. But to your point about what's missing and this is you know what zero hash does is effectively we we call it C3 right it's interoperability crosschain cross asset cross instrument right and cross instrument means for example and circle obviously bought for example um hashts which is a yield

bearing instrument and I consider that a stable instrument and I consider USDC a stable coin and then secondly is abstracting away the complexity which which we've launched through a product called which is effectively it's a bit like plaid like abstracting away the complexity of being able to think about like hey I don't need to insert chains or insert all these pieces. So those are those are the missing infrastructure pieces that I think can solve the usability challenge. Going back to this question of who wins. So let's imagine this world, right? Ripple, circle, tether, JP Morgan coin Facebookcoin. Picture the world in a couple of years, especially after the stable coin bill, which which I do want to talk about in a second. Who who ends up winning? What are the what are the largest stable coins?

I mean I I think in terms of the economics again I would say it's the applications that are going to win and it's the chains that are going to win. I mean that's and and the infrastructure players I don't think the issuance in of itself and so I think the the the I I think it's about edge. I mean I get asked by pretty much every single customer that we have side what should our stable coin strategy be? I'm like what's your edge? M what's your what's and I think that there's going to be I think that there's more of an opportunity for some of the largest players to launch what I would call a stable instrument because the largest players around the world really what they what this is like a bidd yeah I think there's more opportunity to for example launch a stable a stable

instrument because that a lot of these large players whether it be a large payment group or a large remittance group or a large brokerage group their biggest problem is moving money between international affiliates and having to hold balances with partners. And that's why yield bearing instruments are incredibly valuable to them. That's what that's what they see as the the value. So I actually think there's a lot of hype around what should my stable coin strategy be. I I I sometimes encourage our partners to think about what should my stable strategy be and think of stable instruments as much as stable coins. And if you actually think about stable instruments, there's still a lot of opportunity there. let's say you know whatever tethers you know sizes you know Bidd and Frank and you know Benji and

all these other mechanisms are still relatively small so I actually think there's a there's a there's an opportunity to catch up so I actually think there should there should be more of a broad conversation around stable instruments as I call them as opposed to just stable coin and that's what I'm trying to encourage some of our partners to think through what would you do if you were Facebook yeah so for me I think if I was you know meta and you know I I think you know we we power groups like Felix Pagle that allows for example pay uh remittances through WhatsApp. I think that's an incredibly powerful use case. They have the distribution. I think the biggest opportunity for Meta is um payouts right content create with their own stable coin like would you launch Meta US Musk?

I think they have a lot of heartburn and historical uh complexities. I think you just why don't you just why like again the margin is going to be on the use case not on the on not on the issuance side issuance. And so if you actually think of what a payout is, it's meta holds dollars and they need to pay a content creator for example that that it just go it goes into a stable coin for a fraction of a second until it gets to the content creator who might then uh you know convert into the currency. So it's barely sitting in the stable coin where you're not going to earn interest on that because exactly those are the use cases and then you can charge like hey then you can think about okay what is the value proposition of getting this person their money more quickly. Okay

they don't need to wait four or five days. They don't need to think about going through three or m multiple intermediaries. So maybe you can charge 50 basis points to earn 50 basis points on on on like just from a custodial model. You might have to hold that money for 100 days, right? So and you're doing that every single time. So then which one of the players wins that game? Like again, just playing play with me with this meta example here. Like let's say Meta does this and they're like they don't want to actually issue a stable coin. Do they go to someone like Circle and they say hey let us like integrate with USDC and yeah any fees that we earn that we make there like Circle you guys get to keep 20% we keep 80% you guys do all the he heavy lifting of like holding

the stable coins but that's but that's not Circle's core business now right like that's really zero hash's core business and and so if you're if you're meta right you say okay I don't want to have to handle okay let's let's let's say this is like meaningful it's still not going to be for most people they're still going to get paid and stable for coins for a bunch of time. So you say "Okay, let's think about building this out. I need to think about how do I build out transaction monitoring? I have to go get all the licenses. I need to think about all these complexities and nuances." So they want to abstract away all that complexity. So that's why again I break it down by chain asset issuance. There's this infrastructure layer. The infrastructure layer that we we play in does a huge amount, right? We take on

all the regulatory burden. We abstract away the complexity of like gasless transactions. We handle transaction monitoring. We have a travel rule responsibilities. We do all of those pieces. So we abstract that away and let you know you know a meta or whoever it happens to be keep the bulk of the margin on those trades anyway. Okay. But to me I think the biggest the biggest unlocks right now we've launched the product with stripe which groups like remote.com like the payout use case is huge. If you think about the global the global workforce I don't know if you you know you have freelancers or anything but like if you try to pay these people like Fiverr Yeah. It's a nightmare. You have to use deal and pay an arm and a leg and it's like a and it and it takes time. I mean it the way

that we think about payroll doesn't work if it has to go to three or four hops. So for example, we pay some of my colleagues um you know in the Philippines in in in in in stable coins um because otherwise we would pay them late every single time, right? And you know that just does not work. Yeah. And then they hold some of it into again a lot of it they'll just directly burn straight away. They'll convert into the local currency through like a pedax and they may hold a very small amount of it as a store of value. I wanted to take a moment to tell you about Focal by Falcon X, the AI powered insights engine built for institutional crypto. With Focal, you can create charts and generate answers to questions in seconds. Used by over 80 funds with more than 10 billion in assets under

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Yeah. So, S uh Tether made about 13 billion in net income versus Circle's 220 million uh despite only having three times the supply. Um they're not regulated. They don't have the distribution partners that Circle has. Uh they only have 150 employees. So that means on a per unit basis, Tether made makes about 20 times the income that Circle does. Why is that? I mean they do have a lot of distribution natively, right? Like they might not have the brand names, but I mean they they have the distribution globally um to do that. They've won a lot of mind share in the regions that really matter. I mean I think Paulo said it was the first time I mean he comes he's been coming to the US quite a bit

right? He posted a funny picture in front of uh the ball. Yeah. Um you know but I don't think he came here, right? I think the first time he came here was a few weeks ago uh to come to the the the White House. Yeah. I mean they really were not focused on the US. I mean actually as a if you want to well they couldn't really be focused on the US. No. No. But I mean they also I think secondly they also wouldn't allow direct minton and burning uh in if you were 50% owned by a US person. And I'm not sure if that rule still exists. So they were you know trying to create a degree of separation. The difference is is that because their market because they're because they're that the circulating supply the usage is so high you could get like out of USDT you could burn

tether with a secondary partner for two or three basis points up to hundreds of millions of dollars because there was so much utility right so the secondary market is pretty tight and I think that's actually an interesting like an interesting comparison like in terms of like the it's almost like you know when you think about money supply like economics 101 you think about how like effectively liquid it is. Tether is incredibly liquid to get straight back into a dollar very very cheaply because there's a lot of supply in terms of actually usage like onchain transaction volume. So you can get out if you I something that would be really interesting is if you go to multiple LPS liquidity providers and you said hey give me a price for half a billion dollars of tether right I'm 99% 99.99% certain that it would be much tighter

than uh getting USDC price and what that shows is effectively the liquidity um the ability to effectively liquidate into direct dollars and I think that's an interesting comparison between tether and circle why is that it's just used more Right? Like so a liquidity provider might give me a half a billion dollar clip because at a certain price let's say it's six bits because they just want to counteract what they're doing on the other side of themselves right so they're actually using this so much more so they're not going one directional there's a more two directional natural flow and that's why tether if you go to a secondary market I can get much tighter on the secondary market so this means not going directly tethered not going directly to a circle but on the

secondary market we can get considerably tighter on Tether than on then on US. You're saying by going to like a like a Cumberland, the jump, whoever. Yeah. Okay. Some some trading desk. Yeah. Yeah. What's the other side of the argument? What's the what's the bull case for circle? Um let's start with the bull case for circle and I'm curious about the bare case for tether as well. Yeah. I mean, I think if you look at I think I think I think circle's got to play this banking uh trend very very well. Um and I've heard you know people call it like people someone circles you know biggest investors was talking to me I said look what happens when every bank can do this and he was like well we think there might be different sleeves of USDC so it's effectively USDC but

maybe branded differently um and so then you get the distribution factor you get the technology player um you know I think obviously I'm incredibly bullish on stable coins and by nature you have to be bullish on other components I think not not rising ties don't rise everyone equally I think is my only point from today. Um but you know will the next globally defining business will that be built on for example a stable coin? Um so will the next Uber be built on a stable coin? Um will and so I think I'm incredibly bullish on that and there it's a it's a good way to get exposure to the stable coin thesis. Um and it's one of the few places you can get you

public market exposure. So I think that's a that's a that's a very interesting application. What about the regulated side? Because the if I you know as someone who doesn't really know these businesses as well as you do to me as an outsider feels like the bullcase is I mean they got part they're partnering with ICE. They're partnering with you know Black Rockck. They've got I think Black Rockck's on their board like they're they're about they're they're very regulated but buttoned up. Like Tether still hasn't done a full audit. Circle is doing these every month or every quarter. like it feel it does feel like that is probably the bullc case but uh sounds like you disagree.

No, I think there's that but one of the things I mean we're a regulated business and I always say regulation is the flaw. It it's not it's not the value of a business. I mean you know Tether has so much cash they could there's like 8,000 trust entities and banks in the US. They could go buy a bank especially in this environment right? So if they want to be a bank they can be a bank. Um, and also just to be clear, under both bills, both the Genius Act and the Stable Act, um Circle would have to change its regulatory structure as well, right? Um and so there's going to have to be change in implementation for Circle even though they're obviously, you know they're a licensed money transmitter um in the United States. Yeah. Uh, give me give me the odds that Coinbase

eventually acquires Circle. I do. I mean they're they're aggregating a lot of they're aggregating a lot of the economics right so I think there's a good chance of it um I would say above you know 50%. Yeah, I mean it seems like circle success is very is a very until this S1 I didn't real I I obviously knew is very important to Coinbase, but you know the 600 million profit or 900 million six somewhere between 600 and 900 million from Circle translates to roughly like 10 billion of enterprise value for Coinbase. Yeah. Right. So that's that's that's the point, right? It's

like it's it's that is that goes back to those four layers, right? almost like the sandwich and let's put application and infrastructure together and then you have the blockchain. They have the valuable stacks. They they have the chain, they have the application and the infrastructure and so like a question is right a massive risk factor that I didn't see in their S1 is what happens if they're large what happens if Coinbase just says you know what we'll launch our own stable coin. You know it it's just down to personalities. Let's just launch our own. I mean that is a risk factor right like but they don't even need to cuz they're paying nothing. They've got no opex on this thing that's paying them, you know, almost a a trillion dollar bill. They're getting all they're getting a lot of the margin.

I mean, they're getting basically all of the all of the revenue with none of the costs. Yeah. But things change, things can evolve and that that obviously changes things and Coinbase is is a huge potential, you know, is I think frantically a risk factor there. It'll be very interesting to see what happens as you start to embed USDC more and more and more in DeFi as DeFi grows on base. I was like like we've got a bunch of data on like you know Bass versus Salana versus Zaptose like Bass is just doing phenomenally well right now. So yeah just very interesting to see how that maybe could strengthen something like Coinbase's moat as a whole company.

Again I think it was a super smart decision from Coinbase to go down uh to the effectively the blockchain layer. Yeah. I mean that's where again it's DeFi and all these mechanisms is about usability movements easily and that's you know if you make money by movements which is effectively what base does and again in the application layer you make money by movement um so really there's this kind of weird incentive structure right at base you make money from from movements the application Coinbase you know effectively makes money when you move it um so there's this dis there's this incentive structure that's slightly different um I just pulled up your tweet 2025 stable landscape. You got stable coins like USDT, USDC, D. Shifting gears a little bit. Getting what we're I feel

like we're ragging on circle too much here. I want to uh I I like Jeremy. I like I like Circle. But um so you got these stable coins, right? Like Tether and USDC and D and things like that. You called them you said liquid programmable but mostly non-yielding. Then you've got stable instruments, BL, Benji, uh HL PIF. What's HLif? I'll have to look. Yeah. All right. Fair enough. Yield bearing but there's too many acronyms. There's too many too many acronyms. Yield bearing but securities and less transferable. So stable coins and stable instruments. You said two different worlds today. Over time it all just becomes stables. Yeah. Tell me tell me more about that. I mean so my my my thesis is again going back to that point around the conversation around stable coins. I think you you need to cut off

coin, right? And so I think for example Circle obviously bought hashtags, right? So where are people moving money today from USDC? If you're if you're if you're if you're outside of the United States or even in the United States, if you can't earn yield on on USDC and you are truly thinking this is a store of value right, as opposed to an payment method then you will move into a yield bearing instrument. Now outside of the United States, you can be a stable coin and earn interest. And so I'm trying to basically draw this right now. There's this segmentation because the way that's been done that you can't pay interest in the United States for a stable coin. um stable instruments um you can but they're a lot it's a lot more friction to move them right and also there's you

know they're not truly broken down like bidd I think the minimum amount that you can do is $5 million right that doesn't exactly work uh you know to pay for a cup of coffee or to for most people so there's these features and characteristics as to why there's these differences between stable instruments and stable coins and I think over time they become so part of the challenge for like a bid or Benji is because they're subject to like for example the SEC and the way that you move money market funds and how you do that on chain it's a lot harder for you to actually move those assets it is still largely award guardian even though they're built on public chains and so there are restrictions but largely most people will want a yield bearing instrument and then if you can fractionalize them more which is really the issue I think Benji

is like a 20 $20 clip size right which is the minimum so there's these nuances that exist which is why people move between stable coins and stable instruments and why they are largely sit in separate worlds. I think if you increase the programmability of a bidd if you increase the ability to transfer it increase the ability to um effectively make it into smaller increments I think the world becomes a lot more blurry. You might say hey I'm going to hold bidd for my store of value I'm going to use USDC or USDT for a for a transfer mechanism. I think what they become one and the same. Yeah. Okay. What uh tell me how far out on the risk spectrum this starts to go and what the world looks like. And what I mean by this is so so the first iteration of all this was putting cash on chain USDC USDT

right second iteration of this is putting the tre the treas like treasuries on chain right so you got things like bidd and stuff like that it feels like the big trend this year that isn't really in the public narrative but is starting to happen be behind the scenes and I feel like you'll see announcements with this is moving private credit on chain how does this impact the just the landscape and and yeah just what's going to be like the second order implic lications of this. I think it changes the sort of people that get involved in the space, right? Um so who's one of the largest loaners, you know, in in in the country? It's groups like SoFi, right? So there's I think it changes the the profile of people that are becoming interested in the space based on the type of business that

they're in. um you know today you know you've got transactional businesses you've got you know you've got businesses that hold large amounts of of capital that are interested in bidd and other mechanisms and then you you know it opens up a new use case I mean if you look at lar think every asset everywhere will be will be tokenized we started off with dollars to your point we started then we moved to your bearing instruments now we move into unit credit again it comes down to value right um and I think that it by the by the mere nature that something can be tokenized doesn't make it more valuable, right? It there's a there has to be a usability story around it. Yeah. What do you I mean, what do you think about um just tokenized stocks in general? Like I think you guys processed was it two

billion for Benji and Bidd. Yeah. Um in in Q I think in Q1 alone. Two two billion for Benji and Bidd. Exactly. Um I think you were uh one of your big partners is Interactive Brokers. But for people who don't trade normal stons online, Interactive Brokers is like one of the biggest platforms in the world. Um, what do you think is the opportunity for tokenization here and specifically tokenized equities? I'm curious about I mean obviously if you listen to Vlad and people, they're incredibly excited. All in on it, it seems like and so I think you got to listen to super smart people doing very disruptive things. Um, the the challenge around it is that the rules need to keep up. So if you look at the securities rules as the construct of like a transfer agent, right? And that's

what groups like securitize do for the black rock biddfer agent. Somebody keeps a a ledger of ownership effectively what's going on. Well, isn't that the blockchain, right? So it's almost like you have to create this duplicative nature. So there's going to have to be this comfort level that an immutable public blockchain can basically replace an intermediary, which is effectively a transfer agent. So I think there's a lot of pieces that need to happen, right? Because right now you're permeating it on a blockchain, but you're also having to permeate it at a centralized platform. So then what's the value of that? So I think there's there has to be these changes that have to occur and they're going to they're going to have to be, you know, legislative or you know rule-based uh changes. Um and that's why frankly I think a lot of people have

lent into more of the CFTC world, right? So you think about collateral, who are the largest holders of collateral? You mentioned ICE, you know, they're thinking about that I think in their CFTC entity. If you look at the CME again, CFTC and the reason for that is because the CFTC gives a lot more lot lot of lot of flexibility to regulated entities. They can say, "Hey, we accept it's within our risk profile to accept a tokenized asset. SEC is much more uh restrictive." And so I do think you're going to see in terms of that story, the CFTC regulated entities and CMB and ICE have both announced partnerships on that side uh that that I think will will move at a greater velocity. Nice.

Um, why don't we see more chains launching their own stable coins? I think it's an incentive structure right? Um, and I think some of the chains maybe have the same view as me right? We want to be in the transactional business as as opposed to everything you're saying is the issuance business sucks. I think it sucks unless you're a bank. Yeah. Um, and guess what? Then from a bank perspective, you're like, "Wow, we we're very happy with our 10 bits." Yeah. Of course they love 10 bits. live in the temp because they have they got the world's largest distribution. Right. Exactly. And so I think and they can do other things on top of that and they can use that capital more efficiently, right? You can't just hold it in, you know, a list of very narrow permissible investments.

Just clip in. Yeah. Yeah. Uh let's talk legislation. Give me your take on what's happening in DC right now and and and what's going to end up happening. Yeah. So, you know, I'm in DC once every two to three weeks right now. Um I'm sorry to hear that. It's, you know, it's a it's part of the role. I mean, I I think the momentum shift there is is incredible. The bipartisan, you know, the desire to do something is incredible. Um, I think frankly, the desire to listen is is is incredible, too, right? Like, you know I don't know if you spent much time with Bohe, but like yeah he he wants to listen. Um, he does more listening than talking. um and he

absorbs everything. And I think that I think when you look at I think people people have their biases, right, about the current administration, right? That maybe there's like, you know, favorites and, you know, there's like this brashness. If you actually spend time with people spending time on crypto they're almost the polar opposites right? They're very clear about being completely above board. There's no special favors. And then secondly is about listening to the people that have been doing this, right, for for a long time. So I think there is going to be a stable coin that will pass. Um the nuances between the two bills there's not much between them. I think for example the Genius Act gives a bit more primary to the federal government. Um and you know that's basically the core

difference. I do think there's areas that we are pushing to get clarified. I think there's some good statements in this. But what what do you want clarified? I think the biggest thing for us is um making clear around redemptions that a dollar should it needs to be able to be redeemed into a dollar, right? A what is what is a stable coin, right? It is effectively just a dollar on a different form of and we spoke about for example what is RTP? It's just a dollar that's being transferred on a private ledger right? What is USC? What is USC? It's a dollar that is being transferred on a ledger. So the importance is I think if you start looking at you know if stable coins become more pervasive for example

with ICE there needs to be certainty that you can get out of a tokenized dollar into effectively just another form of dollar. Um and that's really important because it's going to take a lot of time for clearing houses and other mechanisms to directly accept stable coins. And frankly, right, if I'm paying for something like to Sony, Sony might need to convert it, might need to do something else with it, might want to convert it into a money market fund. That needs to be the case. And so, I think it's very very important that the redemption rules and the timing of redemptions and the the ability to not cap redemptions is incredibly important.

Who who's arguing that you should cap redemptions? Why would that be a thing that anyone would would want in place? I think it's just an area of the legislation that hasn't really been um strictly defined. I think it's a risk factor that exists. Um, you know, like look, 3 years ago, stable coins deped right? I need to you people want to be able to like if you talk to most risk people, they they they do not view a dollar on a stable coin, a stable coin dollar as a as exactly equivalent to a dollar held in a bank account. They just fundamentally don't. And there's fundamental reasons why it's not. You can, for example, if you hold a dollar in a bank account, you can do sweeps. If you hold it in a brokerage account under SIPC insurance, right? there's a t there are differences, right? Um that exist.

And so if you're going to use stable coins and stable instruments as a mechanism for collateral in particular, you need to be able to move infinite amounts in and out unbburdened. And I think also the rules around fees and other mechanism need to be very very transparent. Right? And I go back to the ATM construct, right? You need to everyone needs to know how much it costs to get in and out of USDC, USDT. That needs to be clear and stated and not just changed on a web. Um, and and those are the key pieces. What else have we not talked about that because of where you sit in the industry, um, what else feels maybe obvious to you that others

are missing? not not just in DC now just broadly with the whole whole industry. Yeah. I mean I think it's the usability like we've got to solve the usability problem. I think we're we're going to solve the distribution right the 0ero to one of stable coins. Stable coins are still tiny right like if you look at the total process volume in the world it's tiny. If you look at the total percentage of remissance it's tiny. So we have this unbelievable opportunity but we have to solve a usability challenge. Um, and I think we have to focus on use cases where there's true value. I think the one thing that always makes me I think people like right now, stable coins is a buzz word. And like with any buzzword, it's like a lot of companies

like AI and then all they're doing is just like basically doing basic data analysis, right? Like it's just a buzz word. I think what's really interesting if you look at a lot of these remittance companies that are being formed in stable coins and you actually unpack the hood, they're actually They're actually very capital intensive business and what they're doing is they're using stable coins and they're saying it's a fee with a stable coin that is effectively the lending rate and so a lot of big companies aren't interested in stable coins if you look at wires and others right because they're like well what does it unlock for me hey I can move money instantly I can do that anyway because I get I've got massive credit lines oh you're going to charge me 10 15 basis points because circle charges you 10 and you add on

five 20 basis points I can get credit way cheaper than that so I think the remittance use case is really interesting and I think there's these you have to build out local localized liquidity pools and groups like Bitso and Felix Pager and others have done a really good job of doing this but I think there's this hype cycle right now that stable coin sold every issue about cross border payments right and if you ask these companies so what's your big like explain to me explain to me how that works what's actually happening is they're just invoking a credit charge as a fee it's like you haven't solved the problem um and that feels to me very very obvious Um, and you know, it's just about these local iterations and so like building out local liquidity pools in these

different aspects. But again, I think there's like it shouldn't matter what you move assets in. Like if let's say Trumpcoin became massively successful in um, you know, let's say Argentina just for for whatever reason. At the end of the day, if I'm moving money between US dollars and Argentinian peso going through Trumpcoin, no one should care, right? It shouldn't be like stable coins are the only way to move money across border and that's why like people like you know likes spark and others believe that bitcoin with larger liquidity pools can be a better mechanism of crossber payments for example. So I I I think what's incredibly obvious to me is if you look at the crossber payment story there's a lot of hype that's being reframed um and I think you need to worry less

about the network and the mechanism of transfer and thinking about the utility and being agnostic across payment method right i.e the asset and agnostic crosschain. Going back to the um I think that's a good take by the way. Um going going back to the stable the legislation that's happening in DC. One thing I forgot to ask. So let me read a um a take on what's happening in DC. And I'm curious if you agree or disagree with that. Um enter the stable act. This bill now advancing through Congress proposes one to one fiat backing for stable coins. Reserve custody only at FDIC insured banks. Issuers must be chartered institutions. Full compliance with AML and KYC frameworks. No yield can be distributed to retail. Strict limitations on what qualifies as a payment stable coin. Put it together

here's the outcome. Tradfi wins. Bank issued stable coins like JPMCoin or BFA tokens get a green light. Non-custodial innovation loses. Any stable coin with embedded yield, smart contract logic, or DeFi integrations is now in regulatory limbo or outright considered a security. Retail gets shortchanged. Yield bearing stable coins which could offer better return on savings than traditional banks are structurally blocked. Developers get squeezed out. The cost and complexity of compliance favors incumbents not startups. Let's call it what it is. Regulatory capture dressed up as clarity. This is not a future where programmable money thrives.

I would say to just to some degree right? Um I mean it's what you are forcing is everyone a lot of players right to become banks and issuers but you know if if anything does does that because of regulation I mean you can see the cost structure that's taken circle to build a business right all the all the resources in the world pay PayPal's got a ton of resources so are we do we truly believe that you know a provider is going to create you know a small startup is going to a stable coin. I I I don't know. And I think there is credit risk with these players. Um when you're holding a stable coin, the you are effectively taking credit risk against a institution. And

so like where do you hold money today? Are you going to hold it in a small bank or you going to hold it in a major bank that for whatever reason you can have a political view on it like too big to fail, but I would prefer my money to be in a in an entity that's too big to fail. Yeah. Same thing with a stable coin, right? It's equivalent to a store of value that can be used as a mechanism for transfer. So, but do you think we're trading off short-term gains, which is yay, we get a legislation and that's awesome and boom, stable coins are booming. Uh the trade-off is uh we don't get some some potentially amazing innovation that could come could have come from yield bearing stables. I mean I do believe that just to be clear right, I think there's going to be an

interesting an interesting discussion point. I mean it's curious who's pushing who's pushing no no no interest on stable coins. Is it the banks or is it the issuers right? Yeah. Like it would be interesting to get the issuers view on that because if it is if it is the issue, you know that cuts into your revenue even more. But I do think it's interesting if you look at like you know Coinbase, they they structure interest effectively as rewards, right? So is that going to be permissible? Is it not? Um are we going to litigate that point? Um I mean a dollar at a bank that earns interest it's not a security, right? Um so you know, do I fundamentally believe that in you know, stable coin should be should be yield bearing? Yes. But I

think this goes back to my point earlier about stable instruments, right? Right. Regardless of what innovation, I think can still happen. It's just going to have to be structured in a different way. The rules can be changed on the security side to allow for more peer-to-peer transfers and other mechanisms. You know, Figure, for example, launching a a peer-to-peer stable coin mechanism that is technically underneath the SEC framework. And again, we're thinking very much US centric as well. There are yield bearing instruments outside of the US that are stable coins um that exist. But yeah, do I believe that stable coins should be yield barren? 100%. Yeah. Yeah. Edward, man, this is great.

Anything else that we didn't cover that we should have covered? No, I think that's uh all good. Good. What's the future of Zero Hash? The future of Zero Hash, you know, we we want to be the biggest company that that powers billions of people access to this technology. I mean fundamentally we do this as technology as opposed to an asset class in itself. We've spoken about different forms of assets that can be built on blockchains. We want to make that really really easy and to bring it part of everybody's life um because ultimately there's a huge amount of of value that can be unlocked with this technology cutting out intermediaries um you know improving the velocity of money. I mean these things sound academic but you know if we can reduce the amount of money that has to be held in collateral that frees up cash flow

that can lead to investment and growth right um it creates a disruptive power and a disruptive force and you know we've worked with companies like Moon Pay you know there were four people they've now turned into a multi-billion dollar business right that's still a customer that that excites me and then we also work with you know big hundred billion dollar plus companies that are innovating for the first time and so I'm more bullish about this space than I've been in years um and part of It's the regulatory clarity, but also part of it is just like the innovation drive is is huge. And yeah, I'm I'm a true believer in what this technology can do.

Yeah. What happens to uh you guys? Are you going to raise another big round? Are you going to get acquired? Will you IPO? Look, I I honestly don't think too much about, you know, like are we going to IPO? Are we going to be bought? Um I I focus on just building. Um I always say this, right? I think we've spoken about this before uh like you know you you're building a business like narrowing those emotional bounds is really hard and I think if you think too much about okay I'm going to get bored and all this kind of stuff um that can accelerate like it can create these like you know you got to narrow those emotional bounds and so decrease the variance of emotion. Yeah. Whilst also not becoming unfeilling and that's the

challenge sometimes right. So, you know we've got a lot of interest. Um, you know, we've got some great investors. Um, you know, there's more that we can do and I think, you know, the coming coming, you know, coming months ahead there may be some news on that front. But me, I'm we're super focused on building. I think honestly, not just Zero Hash, but everyone who's been in the space a long time, we can achieve more in the next 18 months than we've achieved in the last eight years. Breach, I agree with that. Rooting for you, man. Congrats. Great conversation. Cheers.