The Internet’s Next Currency

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Hello again! You having fun?

Whoo! Yeah.

It's a hard act to follow.

Yeah, yeah. We're gonna do good.

I've known Jeremy for some time in his various escapades

and internet video and other things,

but I actually got to watch

Jeremy's big day earlier this year.

Circle is in our building in New York City,

and I managed to sneak my way up to the very high floor.

You were very welcome there. Yeah.

The day of the IPO that Circle had, which, you know,

startled a lot of people, was a huge bust out IPO

that his company Circle had.

And what people first said was,

Gee, that that's an amazing IPO, tech is back.

And then other people said, Who is Circle?

What is it? A crypto company?

Is this the Winklevosses?

So I think more people know what Circle is now,

but a lot of people don't.

So I think we're gonna start with a little,

you know, Circle, stablecoin 101,

where I'm going to ask Jeremy to explain

what Circle is, and, you know, it's based around stablecoins

and a little bit about, you know,

what they are and how Circle's take on it

might be a little different

than even those of you know what a stablecoin is.

Yeah, sure. I'm happy to start.

I think maybe first, just, you know,

we're a software, internet software platform company.

We make software.

We make public internet software, runs all around the world.

And we've got a lot of different software that we build.

Probably the most significant piece of software

we have right now is,

is what we call our stablecoin network.

And the most important piece of that is USDC,

which is a dollar digital currency,

aka a dollar stablecoin.

And really, the basic, you know,

the basic premise of that,

which is sort of what we were thinking about

when we founded the company back in 2013,

was, you know, with the internet,

we've had these different successive layers,

and we've upgraded the infrastructure layers of the internet

to provide different kinds of utilities

and blockchain networks,

and we'll come back to this, I think, in the conversation,

you know, provided an interesting utility

where you could have a way

for entities, people, businesses, others

to directly transact with each other

all around the world, over open networks,

kinda like the web for information.

And, you know, what we wanted to do is create

a kind of HTTP-like protocol, but for dollars,

and that's what USDC is.

And we essentially are, we're a regulated company,

so we're the largest regulated stablecoin network

in the world by far.

They're about-

Aren't all stablecoin companies regulated?

Oh, absolutely not. Absolutely not.

In fact, you know, the vast majority of stablecoins

that have ever come into existence

have been completely unregulated.

We started by being regulated back when we launched in 2018.

And that was important because a core promise of this

is that you give us a dollar,

and then we give you a digital currency dollar

that has the utility of the internet.

And that, you know, that's grown now

to, there are about 78 billion

USDC in circulation.

Last quarter, we supported about $10 trillion

of transactions on the internet with that.

Who's doing that?

Who's buying the stablecoins?

It's incredible.

It's all over the world.

And I think this is,

you know, one of the important things

is that we've experienced this

with other things in the internet.

Like the web opened up access to information,

you know, social opened up access to connecting.

Communications apps like WhatsApp was a revolution

for people in emerging markets and other places.

And stablecoins are doing something similar.

So yes, stablecoin's got their start

in people who needed these sort of dollars

for trading crypto and trading on exchanges.

But that then, in turn, created the availability of these

in, you know, 190 countries.

And so what we're now seeing is businesses and households

who are choosing to hold value in these

'cause the dollar is a better store of value

than maybe their local currencies.

And that these are a very, very efficient way

to conduct transactions around the world.

Like, you know, when you first got Skype on your computer,

you're like, Oh, my God,

I can make free phone calls to anyone?

It's the same kind of experience that people have,

I call it over-the-top internet money,

like over-the-top television.

And so it's getting adoption

by organically, and that's, you know, these are now used

by, you know, many, many hundreds of millions of people.

And I think we'll be billions of people

in the not too distant future.

And, you know, that's sort of the core of it,

of that piece of what we do.

Well, when the hundreds of millions of people

who are using stablecoins,

is the idea that they can move money across borders

more and more easily?

I'm still Yeah.

you know, trying to grasp what the advantage is.

If I have a dollar, I still have a dollar.

And if I have a stablecoin,

I have something that is worth a dollar.

It's regulated.

But there is one company, you know,

you might be super trustworthy,

but one more extra worry I have that,

you know, gee, what about this company

that issued the stablecoin?

Yeah, I mean that's why we've needed regulation in this,

and we now have federal regulation

Yeah, we'll talk

about that. come back to you.

But I think, you know, the first is

I think most people don't actually have

a very good understanding

of what even the money they have is.

And so, just in very basic terms,

if you give a dollar to your bank,

you're lending them a dollar, and then you have an IOU.

And your IOU says I can get a dollar back if I want,

a demand deposit.

But actually what happens with your dollar is

they then mint 12 more versions of it

through loans that they make.

And, you know, some of those loans work out, some don't.

And famously, of course,

if everyone says, I want my dollars back,

there's this amount of dollars that were put in,

but there's 12x that have been created

and that doesn't work out a lot.

And so you have bank failures,

you have huge successive of, you know, versions of that.

And we've had many financial crises related to that.

So stablecoin money,

and actually through the GENIUS Act in the United States,

and similar laws in other jurisdictions, enshrines in law,

what is sometimes referred to as a narrow bank.

Can't do anything with it.

So by law, what happens, you give us a dollar,

and we're holding it in US treasury bonds,

in kind of treasury collateral and cash.

So basically the highest quality liquid assets in the world.

And then you have a very high utility digital currency

that is, you know, unlocks the utility

of using this on the open internet.

And so just like people discovered WhatsApp

is a better way to communicate,

or the web is a better way to publish and share information,

people are discovering stablecoin money as a better way

to transact everywhere in the world.

And it's not just, I wanna make a cross-border transaction.

If I'm sitting in Nigeria or I'm sitting in Brazil,

or I'm, you know, sitting,

even in a developed country like South Korea,

like I actually might prefer these digital dollars

because I like the dollar as a store of value

better than what I deal with.

And we're in an increasingly globalized world.

The fact that...

Like, I have a famous, a comment that I've made,

I don't know if it's famous or not,

but basically,

you know, when's the last time

you sent a cross-border email?

It doesn't even make sense to say that sentence. Right?

The concept of like a cross-border payment

is a total anachronism, it makes no sense in the world.

And so I think we're just,

we're upgrading the monetary system to the internet,

and we're gonna get all the same benefits

that we have with data, and information, and communications,

but with money.

And there's a whole nother layer,

which is the programmability of this,

which is, I think, probably the biggest breakthrough,

which is money as an app platform,

money as something you can- Yeah, we'll about that

in a second.

But so you reported,

and now you report 'cause you're a public company,

that you had, was it $740 million in revenue

in the last quarter, was it?

Yeah. Right.

Where's that revenue coming from?

So the vast majority of that revenue

comes from the reserves that we hold, basically.

In other words, you make investments

and get money from the investments.

We don't really make investments.

We're only permitted to hold treasury. Like, basically-

Well, that's an investment, you know, treasury bond.

Well, it's a regulated- You're not,

I'm putting money in index bonds.

So, for example,

like if you have money with Apple Cash or PayPal

or if you have money with Venmo, et cetera,

they're regulated the same way that we're regulated,

but there are very strict rules there.

So that you always have that one-for-one redeem ability.

There's even more strict rules on us that we're held to

because we're regulated by banking regulators

and central banks around the world that,

you know, keep a closer eye on this in some ways

than the kind of fintechs and payment companies.

So there's a another layer

to what you're doing,

and you just referred to this a little, is that, you know,

the stablecoins are one part of it,

but you're really thinking of something bigger to do

on almost like an economic operating system

Yep. on the internet.

Explain what that is.

Yeah, so I think, you know, when we started the company,

you know, as you noted, right,

my background actually was working

on internet infrastructure.

So I've worked on virtual machines, programming languages,

distributed systems, a lot of different stuff.

And,

you know, when we started in 2013,

blockchains, they were very limited in what they could do.

And there were really only a couple of them,

Bitcoin the most noteworthy.

But there were a lot of ideas about,

hey, you could build these out

so that they could be scalable,

that you could actually write code

and deploy code on these

through what are called smart contracts

that you could kind of have

a proliferation of types of data-

Just like Web3?

Web3 is sort of a moniker

that eventually kind of came around this idea.

But I looked at that and said, That's gonna happen.

And essentially these are,

this is a missing infrastructure layer of the internet.

And if you fast forward to where we are today,

in particular, over the past, say, you know,

three to five years,

you've seen this maturation of this infrastructure.

We began work about 18 months ago on something called Arc.

And Arc is, colloquially,

a kind of Layer 1 blockchain network.

That's the terminology, technical terminology,

but we refer to it as an economic OS for the internet.

And basically, there are new operating system paradigms

that emerge all the time.

The web was one, mobile was one, cloud is another,

AI is another kind of OS paradigm.

And these blockchain networks are economic OS paradigms,

at least what we're doing.

And what does that mean?

Basically, when you think about economic activity,

you have a corporation or an organization that forms capital

that entitles you to hold something

that references your participation in that.

It gives you contractual rights,

it gives you governance rights, voting rights,

there's a treasury you manage,

and then there's a nexus of contracts that you have

both commercial and financial, and otherwise.

All of that activity is going to be upgraded

to be natively executed by software machines

on the internet.

And all of the applications that do that

are gonna be programmed

on top of these economic operating systems.

And I think that this is already happening

in different ways,

but this is going to be a huge part

of what unfolds for the internet

over the next five to 10 years.

And it's actually an essential moment for this to happen

because we're seeing the proliferation of software machines

as fundamental actors in the economy,

and businesses are recalibrating themselves

around these software machines

as actors in their organizations and writ large.

And so we need to marry together that world, agentic world,

and we need to build a substrate that is,

has provable trustworthy transactions,

provable inputs and outputs, provable compute.

This is what these operating systems do,

and I think they're gonna grow and grow in importance.

And so I, you know, it's a beginning in some ways.

Like, there was a lot of mobile for 15 years.

Oh, yeah. And it was all terrible.

And now this is the beginning of this,

I think, hopefully, more mainstream phase

of how this is used.

I guess it, you know,

I've looked at sort of the, you know,

aspirational views of crypto for a long time,

and it's been the beginning for a long time,

you know, so I'm wondering-

Well, $740 million of revenue in a quarter

is no longer the beginning.

Okay. Well, but the second label, the Arc thing,

you know, I think we are at the beginning of, you know,

so we'll see what happens. Yeah.

One thing I think might be holding back this vision

is that, you know, I know you're a software company,

but a lot of people still say you're a crypto company

and, you know, crypto has a,

you know, a mixed, at best, reputation,

and it's been known for, you know,

even Bitcoin, which is very well established,

you know, it's a speculative instrument.

You know, the people buy Bitcoin hoping that, you know,

they're not gonna use it to buy groceries,

they're going to hope that price goes up.

You know, there's been wild fluctuations.

Lately, things haven't gone so great.

And your own valuation,

after that spectacular start, has leveled off.

You're building something that you say

it's regulated, is stable,

but has the larger reputation of crypto still affected you

and is sort of a, you know, a ball and chain to your goals?

I mean, look, we've always talked about what we're doing

as building digital currency

and working on new infrastructure,

financial infrastructure for the internet and the like.

And that's, 'cause that's what we're doing.

I think I totally agree with you that there, you know,

there's a lot of abuse of this technology,

and, you know, there's a lot of bad actors,

and there's a lot of fraud, and so on.

But there's also tremendous technological progress

that's being made.

And cryptography, as you know, probably as well as anyone,

given your history, right?

Cryptography is advancing,

and using math and cryptography to solve problems

in how we build trustworthy data or trustworthy computing

or providing mechanisms of coordination,

it's a big breakthrough.

So this is a very significant technological breakthrough.

And it's what you do with it.

It's what you do with it.

You can go build something to, you know, trade meme coins,

just like you can go build something to share cat videos,

just like you can go build something to sell Beanie Babies

or share your media on TikTok.

A lot of different social outcomes that happen

depending on what you build.

I think we're choosing to try and build infrastructure,

which we think is really useful to people everywhere

and organizations everywhere

to improve how the economy works.

So there's a lot of crap,

just like there's a lot of crap on the internet.

And then we just heard people despair

about some of the decimation of society

that's happened from these utilities on the internet.

So there's bad things that people do.

There's illegal things that people do.

And there's good things that people do.

And I think we just have to wake up every day

and decide what we're trying to do.

And I think, you know, at the end of the day,

if this is not useful at scale for people,

then it doesn't matter.

And people will go and do something else.

So the Trump administration has been a boon

to the whole field.

You mentioned the GENIUS Act.

And we had a conversation, you know, not too long ago,

where I made, you know, in your mind,

the horrendous observation that the 130 billion

or whatever it was, that the crypto industry

helped get Donald Trump elected with,

might have had something to do with the GENIUS Act passing.

And you pushed back pretty strong on that.

Trump himself said, you know, this is, you know,

the greatest boon to the crypto industry

and he's involved in it himself, you know.

Why am I to think that this had nothing to do

with the donations of the crypto industry had,

and the benefits that it seems to be having under Trump?

Well, a couple things.

I think the first is people have to understand

that about four years ago,

the United States government went to the G20

and said, We need global stablecoin regulations.

And the US drove that,

and got a G20 mandate to get G20 members

to build stablecoin regulations.

And there was a set of recommendations that they made.

And then every government in the G20

was tasked with trying to do that.

And actually, that started to happen.

Japan was the first country, the EU was next,

other countries like Hong Kong, Singapore, the UAE.

The US, a report that came out

during the Biden administration,

from every top part of that of the financial apparatus

said Congress urgently needs

to put stablecoin regulation in place.

And you had a multi-year congressional process,

and you had broad bipartisan participation in that.

And there were two times

where the stablecoin bill came very close to passing.

One time it kind of blew up

because Sam Bankman-Fried's fiasco.

And people said,

Well, we don't have any appetite to do anything.

And the second time it almost passed

was actually right before the election.

There was a huge push, Democrats and Republicans,

the colloquial kind of,

what I call the Mick Water Bill, Mick Water's Bill,

the congressional representative,

Senate or House, Republican and Democrat.

And there was a big push.

And actually what happened was interesting is that

I think that would've been passed before the election,

but I think the Republicans understood

that they could hold onto it

and they could get it as a win, as a first legislative win.

And, in fact, that's exactly what happened.

And that was the same goal,

pretty much the same goal? But it passed

with broad bipartisan support.

This is the only piece

of major bipartisan legislation passed, period, in Congress,

super majority in the Senate, including Democratic support,

and, you know, a huge majority in the House.

So this has been bipartisan.

It actually was a Democratic priority,

and it almost passed twice.

I think it is absolutely something

that the Trump administration supported without a doubt.

And I think they support it for the right reasons, actually.

I think it's about-

What about the Trump, you know,

benefit from crypto itself?

And, you know, when he passed the bill,

he, you know, he said

that It's gonna make America the undisputed,

that's in capital letters, leader in digital assets.

No one will do it better,

digital assets in the future,

our nation is going to own it.

We are gonna show the world how to win, capital letters,

in digital assets like never before.

Yeah, I agree with all that.

Well, the United States has to be the leader?

Absolutely. Well-

I mean, this is the future of the...

The future of the global economic system

is gonna be driven by this wave of technology innovation,

the economic layer of the internet.

And the US should absolutely win in that.

We should not have our rivals win in that.

The US should win.

The dollar should remain a highly competitive currency

in the world.

And technological innovation around the dollar

is essential to that.

And I believe that from a statecraft perspective,

from a national competitiveness perspective,

from a global geopolitical and economic perspective,

it's essential.

And that's actually understood on a bipartisan basis.

And that's exactly what the United States is doing.

And by the way,

this legislation had the support of Visa and MasterCard.

This legislation had the support of banks,

of investment companies, and of crypto companies.

Well, I don't know if that's an endorsement.

Well, I think it just suggests that,

I think it suggests that the private sector

wants the ability to have regulation

that at the same time it provides strong assurances,

actually allows for technology innovation.

And that's critical. Yeah.

In every area, not just crypto.

Yeah, so, well, some covering

sort of the basic cryptography breakthroughs,

and the cypherpunks and the dream

of crypto. Yeah.

It seemed to me to be the opposite of saying

that any one country can win at,

and, you know, something cryptographic.

Cryptographic is like math, you know.

And if you spread this, and it would be something,

and the, you know, the crypto dream was pan global.

It wasn't saying, you know, gee, the US can,

you know, can control, can be winning

and be at the center of crypto.

So when I hear that,

I'm thinking that's a variation

from what I wrote about in a book called Crypto.

Yeah. I mean, look.

There's a huge spectrum here, right?

I think you have crypto-anarchy at one end of the spectrum.

I'm not saying anarchy. I'm just saying,

that is an end of the spectrum.

I'm saying global equality. And then you have

totalitarian control of your life

at the other end of the spectrum.

And then you've got a lot in the middle.

And I believe that, you know,

cryptographic, computing networks,

and transactional infrastructure,

these economic OSs have huge global benefit.

There'll be infrastructure for the whole world to build on.

And I believe that those networks

should actually borrow from and enshrine

what we think of as liberal enlightenment values

of openness, of open competitiveness,

of shared access.

Like, all these things are vital to do.

And I think those are American values.

I think they're liberal enlightenment values,

and I think we should export those.

And so that's there.

But I think, I also think, you know, as a country,

you know, there's an opportunity as well.

I believe this opportunity, by the way,

exists for every country in the world.

So I spend a lot of time in countries all over the world,

meeting with the governments who are saying,

How do we embrace this technology?

How do we regulate stablecoins, digital assets?

And everyone pretty much everywhere

is accelerating their work around that.

And actually, what has happened now is that

the US jumped ahead,

and so there is more capital coming to the United States

and there's more startup activity,

and more major companies embracing the technology.

That is a policy outcome

that I think we would think is desirable.

Well, one thing, and be aware of what you wish for,

because the GENIUS Act, your biggest competitor Tether,

which is a bigger company than you,

but hasn't been in the United States,

they have somewhat more of a loosey-goosey attitude

towards regulation,

is going to now follow the US regulation

and come into the US, you know, that's a threat to you.

I mean, look,

I think when you have a clear set of rules of the road,

it's gonna invite a ton of companies.

And, in fact, we've seen,

you know, lots of big public companies,

big private companies, banks,

banks consortiums, others who are entering this market.

It's exactly what good regulation

that is designed to create clear roads will do.

And that's excellent.

But at the same time,

it also validates those who have built infrastructure

in this space.

And I think we've managed to build

a very strong network.

We have very strong network effects.

We're growing faster than our largest competitor.

And we have an incredibly strong position here

in the United States.

So we feel very good about what we're doing

and our ability to continue to compete and innovate.

But I think lots of people, not just in the US,

all around the world,

and in fact we're embracing that.

Like we're building with Arc and other infrastructure

ways for people to launch stablecoins

in almost every major currency in the world.

'Cause I think all of these currencies

are gonna come on chain and we wanna see that happen.

It's an advancement in the global economic system.

Well, great. Well, thanks very much, Jeremy.

Don't get up yet. We're about to do another break.

The merch table's open,

the, you know, the science fair's open,

and you're open to talk to each other.

We'll see you soon for another session.

Thanks. [audience applauds]

Thank you. Thank you.

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