Fireside Chat: Tokenization, Agentic Commerce and Selling to Institutions with Christian Crowley and Ishan Singh

Transcript

[applause] Uh my name is Ean Singh. Um I lead go to market and partnerships for the digital asset team at Google cloud. Um I have a career in trading, investment banking and about a decade in uh crypto and digital asset startups before before I joined Google last year. Um I had the pleasure of being joined on stage by Christian Cwley. Christian is a partner on the A16Z crypto team. He works with um all sorts of startups and and web3 companies on product BD strategy, go to market strategy. Um prior to A16Z, um Christian uh himself was a founder

and he's built uh numerous DeFi and AI startups. He also built the first um Ethereum analytics company under the uh under the consensus umbrella. Um Christian's kind of a crypto OG. He uh he knows the space well. He's seen it from the infrastructure angle when he worked at AWS. He's seen it from the operator angle when he when he built these startups and now uh the investor angle. So very excited to have Christian on stage. Um so I figured we'll just jump right into it. Um the the the first question I guess I really have is you know as you think about your journey and your time building these companies, how do you think that affects your your plan of attack when you talk to these

founders in the crypto space and how do you think that differentiates you um when when you kind of address help them address their problems going to market? >> Yeah, thanks and thanks for having me up here. Um, you know, I think a lot of guidance when it comes to go to market, business development, sales can sound really great in theory. Um, but in practice and in execution, it's often a lot less interesting or compelling. And I think, you know, coming to the table with these founders, emphasizing that I've made a ton of mistakes in my journey and I've learned a lot of things along the way, then trying to articulate um what's worked in the past in kind of common pitfalls has been pretty

effective. I mean, in my current role as as a partner on the go to market team, I I help a companies across a range of problems. Um, so instead of super deep into one one area, the challenge is trying to find commonalities that can be extended across different use cases. And I think one common theme that I've learned over the years, especially um, is this idea of as you articulate the value of your product to the market, um, how can you reduce the friction that the user needs to to to encounter to use your product, whether it's the enterprise, the consumer, you the entire journey of using your product those points

through them um articulate that that ease of use and how you bring your product to market. >> Awesome. Um yeah, I can certainly sympathize with that. You know, I've been I've been on both sides of the equation as well and um really impressed what you guys are doing. Um, at Google Cloud, you know, we we we spend a lot of time thinking about, you know, how money is going to move in the future. And, uh, one thing that's really topical these days is obviously, um, the the pending Clarity Act legislation. Um, there's a lot of headlines and articles about it.

I think people are pegging it at 60% likelihood now of passing. Um, but you know, when we talk to banks, there's certainly interest in stable coins, but we find there's a lot more interest in the tokenized deposit side. And I'm curious, you know, as you talk to your portfolio companies and you talk to institutions themselves, like what are you seeing? How do you see this playing out um between stable coins and and tokenized deposits? >> Great question. Um, the reality is you kind of have two parallel tracks. um stable coins and this current wave of interest and adoption that's taking hold is really compelling. It provides clear set of net new value around 247

interoperability um composability. Um reality is there is this tension that exists. Um banks want to maintain the deposit relationship. They want a system that into uh existing compliance frameworks and I think you know the value stable coins largely is that they're deployed on open networks and banks want find a way to realize some of these benefits while maintaining their current current structures in place. So I think we're going to see a a layered roll out where you know the very nature banks want kind of deposits to exist going to persist for some time. Um and we'll kind of maybe shift the focus a bit to interoperability between pure

play stable coins and tokenized deposits at the banks at least for the near term. >> Yeah, I completely agree with that. You know, I think there was a time post genius when there was talk of banks issuing their own stable coins and um I think that has certainly waned. It's now more about integrating the existing stable coins that exist. But, you know, from from their perspective, it's it's exactly what you said. We're seeing them, you know, um want to give their customers and business users or individual users just cheaper, faster, better payments, and stable coins kind of pull the genie out of the bottle, so to speak. And now they're very focused on, you know, how do we keep deposits on our balance sheet? How do we do this in

a capital efficient way? and and and tokenized deposits is certainly, you know, one very exciting way for them to participate um to give the 247 programmability and other capabilities. But you pointed out something that I think is really important, which is interoperability. Um a lot of the tokenized deposits are kind of sitting within the four walls of a bank today. And um we at Google Cloud have this product called universal ledger where we are it was built in the protocol level to create that interoperability um among these different onchain money assets. And so um we're very excited about that and and and certainly think that you know both will coexist over time and it really comes down to the use case and what you're trying to do

whether it's crossber or domestic or other use cases for businesses versus retail. Um but but certainly there's a lot been a lot of interest and we're super excited about it. Um on the other side of tokenization um I don't like the word RWA. RWA for those of you who worked at a bank means something completely different to bank regulators. Um and so but but the concept of taking a traditional asset and representing it on a blockchain is very powerful. um in in your conversations with portfolio companies and your conversations with with hedge funds and traders and institutions, what do you see as like you know the the killer app for RWA um tokenization these days?

>> Yeah, I think it's a great question. Um I think the key point for me is you know tokenization itself is not the product, it's you know what you're tokenizing and the benefits the tokenized version of that asset provides. Um you're seeing we're seeing early interest and adoption among among things like tokenized money markets, tokenized treasuries. Um you basically take take an asset, you add things like 247 tra um trading, better operability, better collateral mobility. You know, these are the first instances.

There's no shortage of tokenized assets. I think the value prop of tokenizing things beyond these initial set is still being ironed out. Um but the killer app really is having these things time in market showing the benefits and then you know finding ways to expand to to other asset classes. >> Yeah, we we certainly agree. I think I think the killer use case right now is really around collateral mobility. The ability to tokenize a money market fund or or a treasury. If you think about how it works today, everything is constrained by cutoff times and T+1 or T+2 cycles. And then it becomes even worse when you're trying to move assets across geographies and across different time zones. Um, so it's not just the active tokenization that's the the

killer app. It's to your point what you can do with that asset and the capital efficiency more than anything else. Uh, that's very attractive to all the institutional participants from having collateral that you can move across different exchanges and clearing houses 24/7 without worry of different cut off times and then ideally without having to reconcile. There's a lot of reconciliation that goes on in the trad world today because of the different books and records. If everybody can point to the same source of truth and say yes, this asset moved or this asset was pledged to this this counterparty um it will certainly you know be a huge gamecher and and we're seeing a lot of that um and and we're involved in a number of different initiatives to do

exactly that um globally. So so very excited about that. Um, I'd be remiss if I didn't talk about Agentic given the background and the companies that, you know, we both represent. Um, I read a recent A16Z piece that basically said if if money becomes a packet that the internet can route, then the internet itself becomes the financial system. Um, very curious kind of like what what led to that thinking and like how do you how do you measure that the success of that statement over over time? Yeah, I mean what resonates me with me there really is, you know, as as the technology improves, you know, ideally money can operate more and more like information than, you know, a currency that has to pass through a series of

friction points that exist in the current um, you know, financial services stack. Um, and what does that mean going forward? you know, for legacy institutions that have built businesses on existing stack, you know, finding ways to realize the benefits of this kind of net new form of fastm moving um value. But for net new projects, you know, building from the ground up using today's best-in-class technology, it really opens up, you know, a wide range of of possibilities. I think the biggest challenge going forward is going to be legacy companies have distribution. Net new companies with better technology don't have distribution. Kind of how do you how do you move towards either

gaining users or adapting your technology base to keep your users in place? >> Gotcha. Yeah. I mean related to that I've seen a lot of debate or um conjecture about you know okay agents are going to be a thing. We all know that aentic commerce is real. It's it's at the early stages to your point, but it's certainly growing. How do you think of, you know, the rails that these um agents are going to use to pay? If you look at the data today, virtual cards, I think the volumes are up like 6x year-over-year. There's been a lot of good momentum. Um and then there's another camp which, you know, thinks about it as, you know, X42 and stable coins directly is going to be the most

um optimal way for these agents to pay. And you know, I'm thinking like there there's probably a wide range of use cases. Some of them really are microtransactions that are either paying for APIs or compute and and require really high volume, you know, immediate settlement. U but I'm really curious kind of h how do you guys think about that and where do you see the trends kind of changing over time? >> Yeah, I'm happy to share, you know, my view from a go to market perspective. You know, I think the the rise of virtual cards and the volumes there is really compelling and it's impressive.

Um, and really, you know, it's a it's a fact. It's an order of magnitude larger right now than the kind of the volumes flowing through some of the more open protocols, which I'm a big fan of. The challenge really is how do you articulate the value prop of either virtual cards or X42 to, you know, existing card users, existing um, kind of consumers. What's more accessible? Right now, virtual cards clearly are more the value props more accessible. we're seeing adoption at a much higher rate um for net new activity, net new behaviors, like for example, you know, tailoring how much compute you need over a certain period of time and having an agent adjust that in real time. That's a net new kind of behavior. And and to me,

it seems like architecting something tailor made towards that using, you know, rails that that are are more open perhaps makes more sense. But getting behavior changes that are relying on current rails that you know you go from using a card to a virtual card the extension and change in behavior there is is largely immaterial you how do you go from there to fully autonomous agents using XForge. It's it's a much larger leap and the challenge I think is going to be finding ways to articulate to your user base um what the benefits are and and what's the path to actually incorporate that into your into your kind of workflow.

>> Gotcha. That makes sense. Um, speaking of agents and you know at Google cloud we spent a lot of time thinking about um AI and kind of you know AI has been I think arguably a bigger trend over the last few years and um when people think about AI and and how it affects you know the the web 3 industry it's generally positive some I think you know agents are going to bring a lot of volume and agentic commerce is real but like there's a darker side to it as well. Um, you know, I think we've seen a number of exploits already this year. Um, and and I think the numbers up to like 700 million already. Um, and and as and as you talk to founders and and startups,

like are they are they more conscious of this now than they were six months ago when they when they're pitching to institutions? Is is security and thinking about how AI can be leveraged to exploit become a bigger theme in your conversations or is it, you know, just as the same and it's always been somewhat important? I'm just curious how that has changed. >> I mean, based on my own conversations, it's always been critical. It's always been important. And I just think there's a greater appreciation now more broadly of uh the power of the tools that we have access to both on the audit side, prevention side as well as the exploitation side. And I think um you know it's it's a sobering period right now where you know until we have front the frontier models kind of take a look

at existing code bases comprehensively we live in a time where there's kind of a unknowable set of risks based on code that's been in production for years and you know there'll be a transition and I think you know the tools that founders and security teams have access to and and can incorporate and then articulate the value of that security to their users there's, you know, the same tools the the the other side has access to as well. So, I think right now it's really a race between, you know, who can find what first and who can put patches in place. And I think we're shifting from a a model of, you know, audit once and you kind of go from there to recurring monitoring with with the best-in-class models. And I think we're in this

interesting transition phase. It is a it is a little unsettling but you know the founders that I talked to are very encouraged by you know the tools that they have access to themselves. >> Yeah. Makes makes total sense. I mean at at Google we we you know security is kind of like a first class citizen for everything we built whether it's the universal ledger protocol or the upcoming MPC wallet we're building. We're really thinking about how do we give the most uh reliable and secure experiences to um our partners and our customers. So, we're building this MPC wallet. It's a it's a multi-party key management tool that um um allows you to sign transactions on multiple different blockchains. Um the full private keys

actually never constructed or held in one single place. It uses this concept of key shares to actually sign a transaction and eliminates this problem of a single point of failure. Um, the other thing that it does really well is able to sign transactions within less than a second. And we can do this on, you know, multiple blockchains, Ethereum, Bitcoin, Salana, and and Universal Ledger, of course. So, so we're pretty excited about that. But, um, nonetheless, we're using these AI tools in in every step of the, you know, product building process. And um we'll we'll probably continue to accelerate that pace over time. Um and and so you spent a lot of time on the go to market side of things and and you you've been on the other side as I mentioned. I'm

I'm very curious because I personally was on the other side. What are some of the mistakes you see you know younger companies make when they when they approach institutions whether whether it's in the finance space or outside? what are some of the mistakes that they're making or things that they're not thinking through fully that that you've seen as a trend recently? >> I think thematically, you know, there's been a consistent uh misperception that the best practices and what's worked from a go to market standpoint for web two doesn't apply to web 3, which is just not not true at all. And I think, you know, you you need to have, you know, a champion. You need to have a clear value proposition. You need to provide a clear way for if you're talking to the enterprise, a clear way

for them to use your product. You need to remove friction points. You need to take customer feedback into account. Um, by and large, at least the enterprise segment isn't buying for decentralization. They're buying for clear, measurable benefits. And I think recently, you know, we are seeing an uptick in a more strategic approach to go to market. Um, largely around this idea that the best technology doesn't always win. I think it's the technology that provides the clearest benefits and is easily adoptable usually does pretty well. Um, if you think about kind of the mentality of a champion or a buyer in an enterprise, you know, they have a lot of downside if a technology they recommend goes recommend goes wrong, uh, minimal upside. You know,

they're not really they're not investing in this technology. They're they're just conveying that they think this could help the business. Um and and if you give them an easy path to adopt it, it's a much easier cell u than saying look at this is a novel technology that's going to disrupt everything. Go sell it inside. You're going to have a lot more challenging there. So I think you know this idea of removing friction points um working more closely and building towards the use case versus building the technology and the use case will adapt. I think that's been a a mental model that's changed and it's been encouraging to kind of see you know evolve over time. completely agree. I mean, I think on that point, one of the things that um folks need to appreciate about Trafi is they're very budget

constraint and that is only going to increase. Everything is a strict priority and to get a use case or a new technology, especially if it's new prioritized, um everything needs to be quantified. Everything every element of that needs to be looked at on a per trade basis. how much money am I either going to save or what is the net new revenue and volume that I can capture like next this year and next year not not five years out. So, uh completely agree with that. Um I think we're almost up on time. I have one final question for you and we didn't prep this one, but it's the most important one.

>> Who you got tonight, Knicks or Spurs? >> I have the Knicks. Uh, I'm a lifelong Boston Celtics fan, but it's been really fun seeing the city come alive around the Knicks, and they haven't been very good for a long time, so I I'm not I have no no uh deep-seated disdain there. >> There you go. Awesome. Well, thank you so much. Thank you. [applause]