The Era of the Internet Financial System Has Arrived

Transcript

[Music] Good afternoon. [Music] [Applause] I'm really excited to be here in con and talking with you all about the arrival of the internet financial system. I believe we are at a moment this year where so many pieces have come together from the technology perspective, from a market perspective, from a legal and regulatory perspective that we can truly say that a new internet financial system is is being born.

Obviously, everyone everywhere is talking about stable coins and stable coin money. There is simply no doubt today that stable coin money is the money layer of the internet. It is here. It is scaling. It is the critical building block of the internet financial system and is growing rapidly and obviously is anticipated to grow into several trillion dollars of value in the coming years. So, we've we've we've obviously gotten to this point uh over many years as the crypto ecosystem building on platforms like Ethereum, but clearly this is now scaling out into a

mainstream form of money that is legally recognized as money in most major governments and and around the world. With that, we're seeing this rapid transformation where the use cases and the utility of money are expanding and programmable digital dollars and programmable digital euros and other forms of stable coin money have use cases that are exploding. And we're seeing something that had its roots as cash for payments and settlement in the digital asset markets world, which remains an enormous and growing space.

But we're seeing that expand out into all forms of money movement globally, international money movement, crossber money movement, reaching into retail transactions through platforms like Stripe and Shopify and so many others. It's penetrating into traditional capital markets with just breakthrough announcements happening here even this week where through tokenization and stable coins together we're actually reshaping the way capital markets are going to function. We're seeing it reach into the biggest capital market companies in the world who operate exchanges and clearing houses now looking at stablecoin money as a fundamental building block. So this

continues at a steady pace and when we think about this together and we think about the opportunities that we're all working on together, we see that combined there are trillions of dollars of revenue from legacy models for how money moves and and money utility that can all be impacted and upgraded into this internet financial system. of this extraordinary opportunity that we have now. Circle, as you know, operates the largest regulated stable coin network in the world. Just to give you a snapshot of where we are today, we've seen USDC grow 140% uh since the beginning of 2024, there are now over 600 million enduser account wallets where users can

reach in their pocket, touch and use USDC. today. We hope to see that in the billions in the coming years. The scale of transactions happening on these blockchain networks is also growing at a very very steady clip. 614% uh uh annualized growth just on circle stablecoin network uh alone. And so we're seeing scale, we're seeing velocity of money built on this technology. Now Circle began its journey in the stable coin world in the Ethereum ecosystem. And what drew us to this was that Ethereum really represented a lot of the founding

ideas we had as a company. We believed that eventually blockchains would allow us to have a protocol for dollars on the internet where we could issue these fully reserved digital dollars and that it would be programmable through smart contracts. In 2012 and 2013, those ideas were merely ideas on a napkin. And now, uh, they have become vibrant and scaled infrastructures. And so, we've had this incredibly strong relationship with the Ethereum ecosystem since inception. And you can see that through the leading protocols, the leading primitives building with USDC and our deep commitment to bringing our

stablecoin network and our blockchain infrastructure products to the Ethereum ecosystem. You can now see we're already native on all of these uh Ethereum based uh blockchain networks. Uh we're seeing um the bridge to native standard growing. uh I I think there's over a hundred uh uh bridged USDC implementations on the bridge to native standard and this is scaling and so block space is scaling technical innovation is scaling and we view that as highly highly complimentary to what we're trying to build for developers that are trying to integrate programmable digital dollars into what they do.

I want to talk with the remainder of my time about what I kind of describe as the next layer of Circle. We're obviously very well known for our core infrastructure, the the digital assets that we issue, USDC, EURC, which is now the largest Euro stable coin uh in in the world, USYC, which is one of the largest tokenized Treasury repo money market products in the world. We've built out a platform over many many years to provide infrastructure to access this through the banking system all around the world to bring these protocols and standards

to blockchain networks over 23 blockchain networks to build our own onchain infrastructure like CCTP to make the safe and and capital efficient transit of stablecoin money as as easy as possible on all of these networks. And then we built developer platforms and liquidity services so that whether you're a startup fintech in an emerging market or a large global systemically important bank and you want to integrate this technology into how you operate, we're building the tooling to let people do that. But the next the next layer of circle beyond that is something that we worked on over the last year. We

announced it in April and we just recently launched it live into production which is circle payments network. Now, Circle Payments Network really draws on the origin vision of the company, which is how can we take this base layer of digital cash and digital cash settlement and build a set of incremental protocols and features that makes it seamless to take on all different forms of mainstream payment utility. The raw stable coin settlement layer is not enough. We need additional layers of functionality to support all of these different types of mainstream uh payment utility. The way we've

designed CPN is as what we believe is the world's first truly open, extensible and modular payments network. It's built entirely onchain. It is built with onchain modules and primitives. It is ultimately going to be extensible through smart contracts and programmable by developers that build on top of it. Past payment networks have never been able to operate in such a manner. The the scope of what we're trying to do here is ultimately very broad and I I'd encourage you if you haven't read the CPN white paper to do so. We're in the process of rolling out different phases of this and in the first phase we've

really try tried to solve the problem of how can someone who has a wallet or a financial service in one part of the world send value to a person with a wallet or financial service in another part of the world and do it as fast as possible as cost-effectively as possible without putting a lot of capital to work and that's exactly the problem that we've solved in the very first releases of CPN in just the the prior weeks and months. But ultimately, CPN is being designed with as as a member network where we hope over time hundreds if not thousands of firms are connected to it and implement the protocols to fac to support features that are critical in mainstream

payments. orchestration and messaging uh between the different nodes, trust and compliance to to asssure that participants are are following the the relevant local regulations and then features like reversible transactions, features like confidential and private transactions, escro transactions that are necessary whether it's in a business payment context or retail payment context or within traditional capital markets settlement use cases. So CPN uh is is itself a platform that people can build on top of and integrate to and is something that we're very excited uh to to get scaled out. Um and again goes from this base layer of dollar digital

currency, euro digital currency and up into these abstractions that make this accessible to every person, every household, every business in the world that wants to take advantage of all the utility that comes from stable coin money. Now CPN solves for sort of today seamless crosscurrency payments and settlement. But there's still a huge issue that exists in the way users interact with stablecoin money today. The digital wallet user experiences and digital wallet and and and sort of stablecoin liquidity across blockchains remains highly fragmented.

And that ends up in a a user experience that we're all accustomed to or most of us are accustomed to. People have to hold USDC across multiple chains. You open your your wallet and you have USDC on five different chains. And you have to always figure out okay who am I sending to? Which network am I sending to? So what does that mean? It means that for a lot of the USDC actually the capital's trapped and managing that liquidity uh on multiple chains is this kind of constant rebalancing and overfunding which is confusing not intuitive and actually leads to capital inefficiency and look the the UX of this

is just poor I don't think any of us can say this is great uh this is a poor user experience so bridging ads incremental complexity multiple clicks delays uh and and and cost as well. So we are introducing a new product called Circle Gateway. Circle Gateway enables a unified USDC balance for instant crosschain liquidity.

Circle Gateway, thank you. Circle Gateway is a new open crossrain primitive on public chains that maximizes capital efficiency and delivers a mainstream UX. Developers can build on this and integrate it into their own apps. Whether it's a wallet app or or an aggregator app or an enduser app, whatever kind of app that you're building, you have a unified balance that users can see that allows that balance to be used crosschain instantly. No more preunding or rebalancing. So end users that want to

move between these platforms, whether it's a peer-to-p peer transaction or funding uh a funding uh uh a feature in in DeFi or another DAP, um it will work across those. Circle Gateway is completely non-custodial. So users that interact with this retain full control of all their USDC and can withdraw permissionlessly as they interact through Circle Gateway that has been implemented in different products. So Circle Gateway we have I think more information up about this on our site today. Um it is launching in testn net very soon I'm told in July. So today's July, so very soon. And we're we're

we're super excited about what this represents in terms of improving the seamlessness with which stable coin money can be used for everyday transactions across all these innovative um blockchain ecosystems. The last comment I want to make are really just stepping back a little bit sort of we can zoom into like protocol features. is we can look at what's happening with generally with stablecoin money but I want to kind of situate us kind of where we believe we are today. So I talk about this future internet financial system where we're bringing literally the entire global economic system onchain and today we're just in that first box. We're just in that first

box. We're just starting to see onchain payments that can fulfill payment utility very broadly. But across all of these areas, there are there are innovators and entrepreneurs and developers and and startups that are building. And we're seeing emerge a system that spans from everything from onchain models for for representing a a corporate form with governance and voting to toolkits to enable onchain AI agentic payment flows that happen using stablecoin money to more and more innovation in onchain credit primitives including uncolateralized or undercolateralized forms of credit kind of real credit in in in the sense of of

the financial system. We're seeing a proliferation of products around the world for for households, for businesses to do their entire treasury management on chain with stable coins and DeFi primitives and and other things. And now with stable coin laws emerging around the world, we're seeing this proliferation in new currency stable coins all around the world. We're seeing new currency stable coins coming on which promises for us a world of robust atomically settled 247 365 uh onchain FX markets. Again a powerful building block for this future financial system. So all these things are happening. You can see

the seeds of them all here today. And as we think about where we might be in three years, in five years, in 10 years, I think it's safe to say that we are building a new internet financial system. It's such a pleasure to work with so many incredible teams and projects and entrepreneurs and just want to express my gratitude to all of you that continue to work with technology that we work on and in this broader Ethereum community. Thank you. [Applause]