#539 Jeremy Allaire on USDC’s Incredible Growth

Jeremy Allaire is the co-founder and CEO of Circle, the company behind USDC, which is issued by regulated financial institutions, backed by fully reserved assets, redeemable on a 1:1 basis for US dollars. In this conversation, we discuss USD Coin, how it works, current progress, how Circle makes money, most popular use cases, Visa partnership, DeFi, treasury management product, and streaming money. ======================= Polymarket is the world’s leading information markets platform where you can trade on the most pressing global questions. Choose from a variety of markets to trade: Will Trump launch a new social media platform? Will NFT trading volume continue to skyrocket? With over 100 million dollars traded in the last 6 months, Polymarket is the go-to platform to trade on the odds of future events. Think you know more than the market? Trade on your beliefs and earn a return if you’re right. Want tomorrow’s news today? Use Polymarket to see real-time data on what the market thinks will happen. No fake news, no pundits without skin in the game. So, head over to polymarket.com and make an account today with the referral code “Pomp.” Every Monday until May 10th, you can win $500 by participating in the #PolyWhale Twitter giveaway. Click on the link for more info: polymarket.co/PolyWhale ======================= OKEx is a leading crypto exchange known for providing the most options for crypto traders and investors. Whether you want to trade spot, futures, options or swaps, OKEx gives you institutional-grade tools and a best-in-class trading engine. The platform offers credit and debit card funding options and supports 40 different fiat currencies, including EUR, CAD, GBP, TRY, INR and RUB, to name just a few. You can invest, trade, and earn yield, all within one place at okex.com. OKEx is not available to customers in the United States. ======================= Exodus is an absolute game changer in the crypto wallet space, and we’ve teamed up to offer an exclusive discount for you, as listeners of the podcast. Sign up for Exodus today using my promo code Exodus.com/pomp. This is a no brainer for both newcomers and crypto heavyweights - go sign up today. =======================

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:02Anthony Pompliano?

  What's up everyone, this is Anthony Pompliano. Most of you know me as Pomp. You're listening to the Pomp Podcast, simply the best podcast out there. Let's kick this thing off. Jeremy Elair is the co-founder and CEO of Circle, the company behind USDC, which is issued by regulated financial institutions backed by fully reserved assets redeemable on a one-to-one basis for US dollars. In this conversation, we discuss USD coin, how it works, the current progress, how Circle makes money, the most popular use cases, their partnership with Visa, decentralized finance, treasury management products, and streaming money. I really, really enjoyed this conversation with Jeremy, and I think you will as well. Before we get into the episode, though, I want to quickly talk about our sponsors.

• 0:46Anthony Pompliano?

  First up is Polymarket, the world's leading information markets platform where you can trade on the most pressing global questions. You can choose from a variety of markets to trade. Will Trump launch a new social media platform? Will NFT trading volume continue to skyrocket? With over $100 million traded in the last six months, Polymarket is the go-to platform to trade on the odds of future events. Think you know more than the market? Trade on your beliefs and earn a return if you're right. Do you want tomorrow's news today? Use Polymarket to see real-time data on what the market thinks will happen. No fake news, no pundits without skin in the game. Head on over to polymarket.com and make an account today with the referral code Pomp. Again, polymarket.com, use the referral code Pomp.

• 1:27Anthony Pompliano?

  Every Monday until May 10th, you can win $500 by participating in their Twitter giveaway using hashtag Polymale. Go to the description and click on the link for more information. Again, polymarket.com, use referral code Pomp. Go do it, I promise you'll like it. Next up is my friends over at OKX. Crypto moves fast and many crypto-focused companies can't keep up. The exchanges that cut through the noise are the ones that give you access, wherever you are in the world, to the cutting-edge projects emerging in this new asset class. If you're looking for an industry leader that gives you access to a huge variety of crypto assets, tools, and services, I'd recommend OKX, whether that's access to a wide variety of new crypto asset listings that follow industry trends, or if you're not into trading.

• 2:10Anthony Pompliano?

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• 2:53Anthony Pompliano?

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• 3:37Anthony Pompliano?

  episode with Jeremy. I hope you enjoy this one.

• 3:40Speaker 01

  Anthony Pompliano is a partner at Morgan Creek Digital. All opinions expressed by Pomp or his guests on this podcast are solely their opinions and do not reflect the opinions of Morgan Creek Digital or Morgan Creek Capital Management. You should not treat any opinion expressed by Pomp as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his opinion. This podcast is for informational purposes only.

• 4:11Anthony Pompliano?

  All right, guys. Bang, bang. I've got Jeremy here with me. Thank you so much for doing this.

• 4:15Speaker 02

  Absolutely. Thanks, man.

• 4:18Anthony Pompliano?

  For sure. Let's just jump right into it. Give us a refresher on USD coin. What is it and how does it work?

• 4:25Speaker 02

  Yeah, absolutely. So USDC is something that we started working on in 2017 and then launched in 2018. And, you know, USDC was sort of envisioned to be what I like to call like a protocol layer for money on the internet. And when I think about money, obviously, there's like crypto money like Bitcoin and Ether. And then you have sort of quote unquote traditional money, which is essentially like liabilities of a central bank. So how can we take like liabilities of a central bank, represent those as a digital currency? And then let them transact in the same way that you can transact other cryptocurrencies through a protocol for kind of payment and settlement on a blockchain.

• 5:08Speaker 02

  So USDC very much conceived of that. And ultimately with the idea that it could be a protocol that lots of people could connect to. Anyone could implement, whether you're, you know, a consumer product, a business, you know, a wallet, what have you. But when we designed it, we wanted it to be something that was regulated. Because if people are going to really depend on this as a dollar, you know, a dollar, a sort of a digital currency dollar. It needs to have the assurances of being, you know, issued by a regulated financial institution. Have, you know, the sort of compliance and security and audit and all the things that kind of go along with that.

• 5:48Speaker 02

  So that people understand that for every dollar that is issued in a digital token, that those are reserved. And that there's oversight of that. There's, you know, global accounting firms, there's examiners, regulators, there's banks that are regulated that that look at and manage those reserves. So it's sort of a, you know, it's a trusted model. It's not fully a trustless model, but it's a trusted model for dollar digital currency. So, you know, essentially a person or a business, a person could or a business can They go to a circle, open an account and essentially convert from, you know, a bank transfer into USDC. They can have USDC issued and they can also redeem. And we also, you know,

• 6:31Speaker 02

  work really closely with Coinbase as a critical partner in this. And so you can also go to Coinbase and create and redeem USDC as well. So it's, you know, that's what USDC is. It's grown enormously. It's, it's, you know, like a year ago, it's like 500 million in circulation today. There's 13.2 billion in circulation. So growing at a pretty amazing rate and thousands of companies kind of supporting and implementing it today.

• 6:58Anthony Pompliano?

  Where's all the growth coming from? Like, why has it grown so quickly?

• 7:03Speaker 02

  Yeah, I mean, we really started to see this tremendous growth really dating back to right around kind of when the pandemic hit in Asia, you know, first started hitting in Asia last year. And then it picked up as the pandemic spread. And I think part of this was just in general, a shift into digital currency that started to take place, both, you know, as a store of value, as a, as a, as a form of investment capital. And, and we saw, you know, demand globally. So we saw demand for these sort of dollar digital currency units from Latin America, Africa, Asia, other, other places. So just in general, that started to grow as

• 7:45Speaker 02

  digital asset markets themselves have grown. USDC has sort of become synonymous with being sort of the dollar market infrastructure, a sort of a trusted, liquid, redeemable dollar market infrastructure for that space. And so just in line with the growth in digital asset markets. And then really notably, you know, we, we very early on, even back in 2018, when we were launching this, we focused a lot of energy on working with emerging projects that were building decentralized finance and DeFi protocols. And you started to see traction with those in 2019. And then, you know, just as those have taken off, you know, over the last year, USCC has sort of grown significantly alongside it. So when you look at the compounds and the Aves and the Uniswaps and those

• 8:28Speaker 02

  kinds of platforms, USDC plays a huge role in those as well. So we've grown with that. And then the last piece is basically as this, you know, as the USDC grows in circulation and more and more individuals or businesses hold it, they're basically seeing that it has really incredible utility value. You know, you can settle a transaction, you know, in minutes with settlement finality. I mean, a lot of the same assurances that you get from like a Bitcoin transaction, you get with a dollar transaction and people who understand like the power of cryptocurrency are like, this is just a better way to settle transactions. And so we're seeing just a lot of growth in various payments and settlement use cases, even, you know, recently Visa itself, you know, building USDC natively into Visa's core network as a currency, as a

• 9:13Speaker 02

  settlement rail for for for their network, which is really amazing. So it's sort of moving into these other spaces. And obviously, that's a big part of the vision for where it goes.

• 9:25Anthony Pompliano?

  One of the most popular questions that I get whenever I bring up USDC is just how the hell does Circle make money? Explain kind of the way that you interact with this, the work you guys do have to support it, but also how you make money.

• 9:37Speaker 02

  Yeah, so I mean, Circle has a few different revenue streams, basically. So obviously, we kind of operate the USDC marketing infrastructure and we basically provide that almost like a public utility. And so like, you know, a business, an institution can enroll in a Circle account. We only service businesses directly and can, you know, at, you know, at no cost, basically create and redeem USDC. We administer it, we run it, et cetera. And and obviously, as part of that, as a regulated financial services company, we also manage those reserves, that 13.2 billion in reserves. And so there is some revenue that that comes from that. And then the

• 10:21Speaker 02

  second is, is, you know, we launched really starting last spring.

• 10:27Speaker 02

  A whole family of transaction and treasury infrastructure services that were built up around it. So basically providing all of the APIs that a company would need to connect the existing bank networks, like, you know, bank transfers, wire transfers, credit cards, debit cards, and wire that right into USDC settlement, the infrastructure for, you know, wallets in custody and storage for people who want to, you know, use that within their own treasury operation, whether it's a B2B or B2C product. And that kind of collection of platform services is a very big revenue driver for the company as, you know, lots and lots of companies are building on this and they essentially need that kind of financial infrastructure for

• 11:11Speaker 02

  their own products and services. So that's a, that's a big revenue driver for us. And then, you know, we have some new revenue streams we're launching, but, but we also operate the largest equity crowdfunding platform in the United States, which is Seed Invest, which is a pretty significant revenue driver for us, too.

• 11:28Anthony Pompliano?

  Got it. Talk a little bit more about the treasury management in terms of your guys' end. So a lot of people know that there's other stable coins where they basically take the reserves and they generate yield or revenue from it. There's a whole bunch of speculation around just how much risk is taken there versus some of the stable coins versus others. Like, how do you think about generating that yield? Are there specific things that you guys do, both from a risk mitigation standpoint and also revenue generation view?

• 11:58Speaker 02

  Well, so I kind of break it into, into two pieces. The first is, you know, Circle is regulated and supervised by, you know, state banking regulators. And we, we have a very strict, what I call kind of regulatory perimeter for the permissible investments behind electronic money, behind kind of stored, electronic stored value, electronic money. So, and that's supervised and examined by, by examiners. And there's, there's also OCC regulations that came into, you know, guidelines that came out last year as well that has to do with, you know, if, if you are in fact, say, a reserve bank. That is providing reserve capacity to a stable private stablecoin issuer.

• 12:41Speaker 02

  You know, again, the kind of fundamental kind of examination requirements of that. So it's pretty tightly bounded and and and we obviously have, you know, large global accounting firms attesting to the fact that we're, you know, meeting all of our obligations there as well. So it's pretty narrow, like we can't go out and, you know, take risk. Basically, you know, we, you know, it is pretty narrow. On the other hand, what's happening is there's these incredibly fast growing lending markets in USDC itself. And so a lot of the yield generation is essentially blockchain mediated borrowing and lending markets. Some of those are done through centralized institutions like crypto prime brokerage firms.

• 13:24Speaker 02

  And some of that is done through decentralized markets like, you know, compound protocol, AVI protocol, things like that. Those those markets where there are borrowers and lenders of USDC are are are, you know, really, really meaningful. And and that's where, you know, we we we have a product, our high yield digital dollar accounts for businesses that's imminently going to become available and will allow a corporation, their own working capital, their own treasury to kind of allocate into USDC yield, which is really, you know, providing a very simple, regulated, secured environment to access that kind of market.

• 14:00Anthony Pompliano?

  Explain a little bit more in those markets, whether they're kind of the centralized or decentralized versions. Why are people borrowing? And then what are they doing with the USDC once they borrow?

• 14:10Speaker 02

  Yeah, I mean, so you have a wide range of of use cases there. Obviously, you know, you're familiar with like the block five of the world. So people are are borrowing USDC sometimes because they they they don't want to sell their Bitcoin, but they want to buy a car or they don't want to sell their Bitcoin and they want to put a down payment on a house or, you know, so it's essentially people who are borrowing against other crypto assets that they have because they they believe that that's, you know, a good, you know, a good strategy. So so that's, you know, that's one and that and that exists at the retail and institutional level, obviously, around the market. You also have a phenomenon of, you know, I think in general.

• 14:52Speaker 02

  And this has proven to be a pretty sound strategy over the past 10 years. But a lot of folks that are in the digital asset space are fundamentally, if not entirely structurally long, things like Bitcoin. And again, that's proven to be a pretty good strategy over 10 years. It's probably, in my view, again, this is not investment advice. My view is that I think it's probably a pretty good strategy over the next 10 years. And so, basically, people are borrowing USDC because they're structurally long BTC and they want to be able to continue to invest and trade. And so that's a big borrower, a big driver of borrowing demand. But it's evolving.

• 15:34Speaker 02

  So we're seeing, again, this gets into like, USDC is becoming more of a payment and settlement medium. People want to utilize it as a working capital medium. So for example, you're seeing more like venture debt type models where basically people are underwriting working capital needs of, say, a crypto mining firm that needs to do capex build out and they want to borrow in USDC because that's the transactional medium of the crypto economy in some of these cases, right? So you're seeing kind of more like traditional borrowing happen at the institutional level. That's starting to work its way into these loan books. And I think that will continue.

• 16:14Speaker 02

  I think our thesis is that as USDC in circulation grows, as it becomes more widely accepted as a payment and settlement medium, then lots of businesses and individuals are going to want to borrow it because it's a better form factor for a dollar than what I call ACH money or M2 money as we know it.

• 16:34Anthony Pompliano?

  Yeah. How big can this get, right? So you've gone from about $500 million to 13.2 billion. Is this a $100 billion opportunity? Is it a trillion dollar opportunity? How big do you think it can get?

• 16:47Speaker 02

  We think it's far larger than a trillion dollar opportunity. And our view is really that if today, in some ways, the total addressable market for something like a USDC is, in our view, it's M2. So M2 today globally is about $100 trillion. And so that's commercial bank money. That's electronic money in the traditional commercial bank form factor. We believe that digital currency form factors are going to be superior to traditional commercial bank or ACH money form factors. And so over a long period of time, we think that there is a share shift. There's a share shift to both businesses, individuals, others wanting to keep value

• 17:31Speaker 02

  in stablecoin models. And so we certainly think it has the ability to get into the trillions. If you look at dollar money markets today, I think they're about $5 trillion. So I think there's a lot of ways to look at that. And this is like, you know, digitization of music. How big was the market for digital music back when everyone had CDs or streaming television or, you know, long tail e-commerce markets like Amazon or eBay? You know, all of these, I think, are very, very large. And you just have to pick your timeframe, right? Is it a trillion dollars in five years? Is it $5 trillion in 10 years?

• 18:11Speaker 02

  But I think about it as the share shift that will take place into this natively form factor of digital money over a five to 10 year period. It should get to, I think, 10% of what the TAM might be today.

• 18:28Anthony Pompliano?

  Do you feel like digital currencies in general are simply going to replace what you call ACH money? Or do you think that they're more market expanding? And kind of the corollary for those that are listening is essentially Uber, you could have said, hey, they're going to disrupt taxis. Or you could have said, no, they're actually going to expand the market. And what's going to happen is a lot of people aren't going to own cars because they're just going to Uber everywhere. And so how do you view that with these digital currencies versus ACH?

• 18:52Speaker 02

  Yeah, so I think...

• 18:56Speaker 02

  The way I look at it is twofold. I think one is in terms of like the the actual like money supply like M1 or N0, right? We don't really impact that, right? So that is still sovereign debt, basically, right? So we don't impact that. This is just a form factor on on top of that. Do I think that it will be market expanding? Yes, but in the following way. Just like, you know, with, you know, I I used to use this example, like when the web came about. I used to make this argument. This is my my first company was Tools for Building Web Applications, right? That the net world output of software created was going to grow exponentially.

• 19:38Speaker 02

  Because it's going to be basically instantly, it's going to be cheap to basically create to distribute software through browsers. Or when, you know, email came out, like the net world output of text based communications exploded like enormously. And and so as you've had basically open networks that allow, you know, in in historical, you know, terms on the Internet, data to flow instantly for free, basically the volume of activity increased dramatically. And so my view is very similar that essentially digital currency native payments infrastructure over time will drive the cost of payments to zero. So the the ability to sort of charge a fee to move value

• 20:19Speaker 02

  or the ability to charge a business a fee for them to receive value will approach zero over time. And as you reduce friction, you increase speed, you increase velocity. It's every Internet device in the world connected to this. And and you have that kind of speed and velocity, Internet. The net world output of payments will increase exponentially. So I actually do think it's market expanding in terms of the the volume, just overall transaction volume in the global economy will increase as a result of digital currency.

• 20:48Anthony Pompliano?

  That makes sense. And I think one of the the big questions that people don't understand and asked me to ask is when you think of a digital currency today, you are essentially a private company who has taken a fiat currency and you're digitizing it, right? And obviously, the market wants this. You've grown incredibly fast. But now there's a lot of central banks that are talking about creating their own digital currencies. The idea would be same monetary policy, just this new technology form factor. And whether it's a digital dollar, euro, yen, yuan, you know, name your currency. They essentially would end up in what is a very similar place to where USDC is today for for the digital dollar. Do you look at that as competition? Is that something where there's a partnership opportunity?

• 21:30Anthony Pompliano?

  Is that something where maybe actually the US government, central bank, treasury, etc. just adopt USDC? Like, how do you see that playing out as they kind of further explore this idea?

• 21:41Speaker 02

  Yeah, I mean, lots of things to talk about there. So just maybe to answer your your last question first. We absolutely see opportunities to partner with national governments around the world. And and we believe that, you know, open source, open internet, technical innovation, public chain innovation, all of the the velocity of things that are happening with that, combined with, you know, kind of technology-driven private sector work, is moving at an incredible velocity. It's moving very, very fast. It's going to move way faster than government-sponsored R and D initiatives. And so ultimately, I do think that leads to a place where there is real collaboration. But I think to step back, though, I think, you know, a lot of times,

• 22:27Speaker 02

  people don't really realize that electronic money today, virtually everywhere in the world, is issued by the private sector. So when you think about, you know, electronic wire money, which is the first form of electronic money, that's issued by commercial banks. Central banks sort of approve this as a as an electronic medium. But it's run by consortium of private companies. It's run by a consortium of private companies in an organization called SWIFT. SWIFT is hundreds or thousands of private sector firms collaborating on Technical standards and interoperability. You take the most popular form of electronic money that we have today, which is credit cards and debit cards. That's privately issued electronic money.

• 23:08Speaker 02

  It is associations and consortiums of private sector actors getting together to define standards and interoperability, which is exactly what the card associations were born to do. And it's it's all privately issued. ACH money is the same thing. ACH networks are consortium of private sector actors coming up with common standards for bank to bank transfer. It's privately issued money. So the world today is consortiums of tech of open standards or of of of standards, at least interoperability standards and privately issued models. That's worked pretty well for most of the world. Now, even in China, where, you know, there's obviously a lot of attention on on the digital yuan.

• 23:53Speaker 02

  I I think if you really look closely, there's two things going on. One is China leapfrogged the entire world in privately issued electronic money in terms of digital money. Alipay and Tencent and WeChat Pay. You know, a billion people were using these as privately issued electronic money on a massive scale. Now, in a place like China, that was viewed as too much unchecked private power. And so the development of the digital yuan is largely a response to the unchecked private power of these very, very, very large private institutions. And you're seeing that kind of get reined in in a variety of ways. And and so China is a little bit unique in that, you know, the government's largely run by engineers

• 24:39Speaker 02

  and and and they build stuff, like they build a lot of things. And and that's not really the model in in most of the Western capitalist and and many other markets in the world, where it really is technology innovation, entrepreneurial innovation, private sector actors, you know, free market, open competitive environments. That's what has allowed innovation to thrive in in in the capitalist world, or at least the the democratic capitalist world. And I think that that will continue to serve. This, you know, many parts of the world really, really well. And so I, you know, again, coming, coming back to the last question again, I think this creates tremendous opportunity for consortiums like Center Consortium, which defines the self-governance and regulatory compliance frameworks around USDC,

• 25:24Speaker 02

  to really grow, take on more members, more involvement, et cetera.

• 25:30Anthony Pompliano?

  And so when you think about some of the recent partnerships, I think you guys have one with Visa, a few banks. Is that essentially what you're trying to do is build these consortiums so that you can create a lot of the buy-in around those standards? And that's kind of the viewpoint and direction you're headed? Or should we think about those partnerships in a different way?

• 25:49Speaker 02

  Well, so our, our partnership with Visa is a specific commercial partnership, aimed at, at, at driving adoption of USDC in, in a number of ways that are kind of compatible with the existing Visa network and their network of issuers and merchants. And, and, you know, I think we're seeing some really good initial traction with that. I think in general, Circle is focused on, you know, encouraging and supporting and developing this broader open ecosystem. You know, the, the, the beauty of having something like USDC be a public protocol is, you don't need to be part of a consortium to adopt it. Thousands of companies have implemented support for it. They don't need to ask anyone's permission.

• 26:33Speaker 02

  They can, you know, build a digital wallet or they're in exchange in Korea or they're somewhere in the world. They can just connect to the protocol on a public blockchain and it just works. And so I think one is just continuing to foster that, that open ecosystem. But yes, I, I think ultimately you'll see more partnerships with established payments companies, established financial institutions, banks, others that are going to play an active role in, in the development of this ecosystem.

• 27:00Anthony Pompliano?

  Got it. Let's talk a little bit more about the treasury product that you guys have and we'll be rolling out here a little bit more aggressively. To me, that seems like if you can build a product that you go to every corporation, you say, hey, currently you get X percent on a money market fund. And there's a bunch of obstacles and friction in terms of managing your treasury. We can do it better, right? Better can be a higher rate of return, better can be more kind of less friction when it comes to payments, whatever it ends up being. Talk a little bit about why you're so focused there and kind of what you think that inflection point can be for Circle and also for the companies that use that product.

• 27:35Speaker 02

  Absolutely. I mean, look, like stepping back, the way that we think about this is that we're going to go through a period where if you're a corporation and you're a corporation that operates on the internet in some way, if you're like an internet native company, which almost every company is becoming in some way, like these sort of internet leaning corporations, you're going to want to leverage this new financial infrastructure. You're going to want to leverage because of its efficiency. You're going to want to leverage it because it allows you to move money faster, cheaper, easier globally or for with your own customers. And you're going to want to embrace it as part of your treasury strategy.

• 28:19Speaker 02

  You're going to want to store value in crypto assets like Bitcoin. You're going to want to store value in these forms of yield products as well. And so I think that just generally, we think over the coming years, tens of thousands of businesses are going to want to have you know, corporate treasury accounts with digital currency, financial institutions that make it easy for them to use this, both as a transactional infrastructure and as a treasury infrastructure. And so we think that's a really significant, very large opportunity. And eventually, millions of businesses are going to want to have accounts and have have access to this all around the world.

• 29:01Speaker 02

  And so to us, it represents really a transformation in, you know, when you think about kind of transaction banking or treasury services, you know, global banks like Citigroup or HSBC or others or Chase that provide accounts for payments and treasury, right? I think

• 29:23Speaker 02

  Digital currency native models for that are ultimately going to become super attractive. And that's what we're excited about. In the short term, I think, yeah, it's very specifically, we're in a low yield environment. Digital asset markets have created an opportunity for high yield environments. And so, yes, there's an opportunity to just see people who want to allocate some of that static unused working capital into whether it be Bitcoin or or or or dollarized markets as well. We think that there'll be continued growth in that in the in the next year or two.

• 29:55Anthony Pompliano?

  I tend to agree. How much of this also empowers something I'm really interested in, which is streaming payments, this idea of lower cost, lower friction payments, whether that's, you know, corporations that say, hey, we're going to completely kind of reinvent the way that we pay our employees, maybe want to pay them every day rather than every two weeks. Or maybe it's some sort of pay as you go model. I've seen a lot of people talk about, you know, paying as you consume a podcast or watch a movie or whatever. How much of USDC and the infrastructure that you're building can play a part in that?

• 30:25Speaker 02

  Yeah. So we're, we're really bullish on like innovations in in in payments and value exchange. I think a huge part of the motivation for this, this goes back eight years to when we founded Circle, was this idea of programmable money. And it captured a lot of people's imagination. And the idea that, you know, a dollar could be like a native data type on the internet, like a JPEG or a music file, and then you could program it and then you could write code around it. We're in the super early innings of that innovation, right? DeFi protocols themselves are an example of saying, hey, I've got a programmable programmable financial contract. Well, we are seeing, you know, smart contracts for streaming payments.

• 31:09Speaker 02

  There's multiple projects that have integrated USDC, which allow you to do exactly those kinds of things, like have metered out payments, have, you know, kind of buffers and escrows and have events that trigger, you know, you know, payments and payouts. I I'm excited, very, very excited about what the kind of open developer community is going to do now that you have smart contract infrastructure and you can put Money in this way, I think we're going to see innovations in all forms of commerce relationships, labor relationships, trade finance models, invoicing models, escrow models, like so many dimensions of both individual to business and business to business type of interactions getting mediated by public chain infrastructure.

• 31:55Speaker 02

  Streaming payments is a great example of that. And it's kind of like the example earlier you touched on with like an Uber where, you know, when you had like a smartphone that had 3G access and you had a smartphone that had a GPS and you had a smartphone where you could create reasonable GUIs, right? Each one of those was cool, like, oh, you can actually have a GUI. Oh, it's actually a reasonable speed on the internet. So you can actually have an app that performs well. And wow, there's this GPS. But there's the mashup, you put this together, someone kind of said, hey, if I can mash these up, I can revolutionize transportation for consumers. It's that creativity that comes up when you have those things and you can put them together. The same thing's going to happen here. None of us can predict the breakthrough applications that are going to be created in this.

• 32:38Speaker 02

  Incentivized social media networks, you know, we're seeing this with NFTs and you're seeing with the social currency, you know, kind of model. If you have, you know, a super efficient micro payment infrastructure in something like USDC, which you can do now on, you know, next gen chains like Solana and Algorand and stuff like that, you actually can start to build breakthrough business models. So I'm excited. I think that we're going to see so much there. And I think a lot of times people kind of, you know, they tend to think of, wow, we already have electronic payments. You know, isn't this this? And it kind of misses the point, right? We already had taxis, but there was actually a radical better, a 10x better kind of product that's still waiting to happen.

• 33:19Anthony Pompliano?

  Yeah, I tend to think that a lot of what is going to get created hasn't even been attempted yet. And most people tend to think somewhat in an evolutionary, but yet elementary way, right? So it's, hey, if I know where we're at point A, then point B is kind of the next thing to think about. It's very hard to kind of see from point A to, you know, what's the 26th point away, right? So I think that, I think you're directionally correct there. What's next for Circle? As you kind of continue to build the business, obviously, there's a hope, there's continued kind of adoption and demand for USDC. But what else are you excited about? What else are you working on or what do you want people to know about?

• 33:59Speaker 02

  Yeah, absolutely. I mean, there are a lot of things. I think about the stuff we're working on. So one is just making sure that the core infrastructure for this can be like web scale. So that, you know, you can transact something like USDC with, you know, apps that are built for hundreds of millions of users. And you can transact in, you know, in fractions of a second with extremely low cost. So it's just making sure it's like, I like to call it like moving from dial up to broadband. So, you know, we're, we're, we want to make sure that the like, the fundamental kind of payment settlement throughput can kind of move from dial up to broadband. Sort of, you know, first and second generation blockchains, and then, you know, sort of third generation blockchain sort of take you there.

• 34:41Speaker 02

  And so, so that's a really big focus because that's coming. Whether it be through NFT apps, global payment companies implementing this, you know, innovations in social commerce. Like all these things are going to bring a different scale of, of user base onto this. And so we need to make sure that it can support that. The, the second is, you know, we're, we're really trying to build out this kind of suite of services for businesses and fintechs that want to build on this. And so, you know, what you can expect to see from Circle is, you know, more and more kind of fundamental building blocks for financial applications. And, and, and, you know, this sort of core, you know, we think of it as like this commercial treasury account type of product and infrastructure.

• 35:26Speaker 02

  So more and more from Circle to kind of explore, support, you know, not just, you know, blockchain native firms or crypto markets companies, but also more and more mainstream commerce firms getting into this. That's a, that's a really big focus. And, and, you know, we're, we also continue to be super, super excited about, you know, what, what we're doing with Seed Invest, which is extremely fast growing. And we're helping startups all over the place raise capital directly on the internet, larger and larger deals. You know, the, the crowdfunding exemptions have expanded considerably. And so we have companies doing $20 million raises, $30 million raises, as well as Reg CA, which now allows up to $5 million raises directly from unaccredited investors.

• 36:08Speaker 02

  And so just continuing to help companies raise capital on the internet. And, and obviously we see an opportunity to weave that more closely with digital asset infrastructure as well.

• 36:18Anthony Pompliano?

  For sure. What keeps you up at night? Like when you think about everything you guys are working on or the industry at large?

• 36:24Speaker 02

  Yeah, you know, I think there's a few things. I mean, you know, one is a lot of what I think about is just like making sure we can execute. There's such a big surface area of stuff that we're working on. I know every firm in the crypto space is just like, oh my God, we're growing, we're growing. There's all this stuff and just staying in front of that velocity and coverage area is really hard. You know, we're adding hundreds of new employees to Circle, you know, this year and just doing that is really, really hard. I think, you know, I wouldn't say it keeps me up at night, but certainly because I generally sleep really well every night. But, and I know you do too, but I I'm religious about sleep, as it were.

• 37:06Speaker 02

  But, you know, I think like what's happening with crypto right now, it's becoming, it has reached a different level of awareness. And it's actually gotten to the point where governments are genuinely, you know, befuddled, afraid, uncertain. And, you know, you're going to see some stupid decisions get made and you're just going to see some stupid decisions get made. You're going to see people make rash decisions. And so I think we really believe that, you know, this, you know, open financial system, this crypto native economic infrastructure, you know, building this vision, this world is truly better for the world.

• 37:49Speaker 02

  It truly delivers more, you know, opportunities for individuals and businesses everywhere. But, you know, there's going to be this tug and pull, right? There's going to be this tug and pull of people wanting to kind of keep the genie in the bottle, wanting the existing framework and systems and governance and other things to kind of be what they are and not really willing to embrace the much broader, you know, changes that crypto involves. And so I think there's just, there's a high threshold. I think national governments are going to have more involvement. And that puts a lot of pressure on the industry. And so that's something that's significant that we think about a lot and we just brought on Dante Despard.

• 38:33Speaker 02

  As Chief Strategy Officer and Head of Global Policy and he's really spent the last couple of years, meeting with major government officials all around the world around these digital currency issues. And so we're investing pretty aggressively in policy issues because we know that as this grows, as this becomes more mainstream and it rolls out around the world, we need to be there, you know, helping, helping make sure that, that, you know, ultimately, we're on the right side of history.

• 39:00Anthony Pompliano?

  So, last question for you. Are you still having fun?

• 39:03Speaker 02

  I'm having a great time. This is awesome. I mean, look, you know, I've known you for a while and, and we got started eight years ago, right? And eight years ago, when, when we started Circle and I told people, I'm, I mean, I'm creating like a digital currency bank, or whatever, people were like, are you out of your fucking mind? Like, like, you know, and people wouldn't even talk to me because they thought they might get in trouble, you know, for taking a meeting with someone who's working on, you know, something with Bitcoin. But, you know, obviously, things have changed a lot. A lot of the ideas that we had, you know, I was looking at my Series A DAC the other day, just for kind of reminiscing. It's like, all these ideas that we had, they're happening now. Like, this is actually happening. Like, this, so many of these things are actually happening. And, you know, I knew that these were going

• 39:48Speaker 02

  to be these five to 10 to 20-year cycles to do this, but I really feel like, right now, so many of the things that got so many people involved in this industry in the first place are really being realized. And so it's super exciting. It's really, really exciting and really rewarding.

• 40:02Anthony Pompliano?

  I asked that question because I can tell you're having fun, which is, which is half the battle, right? That's what keeps you going.

• 40:09Speaker 02

  Yes, yes, you have to. And anyone who knows me knows that I, I, I tend to be a fairly optimistic person.

• 40:17Anthony Pompliano?

  Optimism wins, man. Optimism wins. All right. Where, where can we send people to find you on the internet or learn more about Circle or Circle's products?

• 40:24Speaker 02

  Yeah, absolutely. So, I'm Jer Allaire on Twitter, and circle.com is straight up where you're going to find everything you need about Circle.

• 40:35Anthony Pompliano?

  Awesome, man. Well, listen, thank you so much for doing this, Jeremy. We'll have to do it again in the future.

• 40:38Speaker 02

  Awesome. Thanks, Tom.