Arc Mainnet, AI Agents, and Tokenized Markets | Nikhil Chandhok, CTO of Circle

Circle just launched Arc Mainnet, and its ambition is much bigger than putting USDC on another blockchain. Circle Chief Product and Technology Officer Nikhil Chandhok joins David on launch day to unpack the vision for an “economic OS” built around fast settlement, stablecoin gas, privacy, and institutional-grade financial infrastructure. --- 📣SPOTIFY PREMIUM RSS FEED | USE CODE: SPOTIFY24 https://bankless.cc/spotify-premium --- BANKLESS SPONSOR TOOLS: 🔓NEAR | TRADE CONFIDENTIALLY, GET 20% BACK https://bankless.cc/near2026 🎯THE DEFI REPORT | ONCHAIN INSIGHTS https://thedefireport.io/bankless 👑BANKLESS CONTENT MCP https://www.bankless.com/premium --- TIMESTAMPS 0:00 Arc Mainnet Is Live 2:57 The “Economic OS” Vision 5:29 Validators, Privacy and Post-Quantum Security 8:27 How Private Is Arc? 12:24 Immutability and the Lazarus Test 16:14 What Gets Built on Arc First? 19:19 AI Agents Become Economic Actors 26:45 Agentic Commerce Gets Real 33:17 Reputation, Nano-Payments and Agent Credit 36:37 Tokenized Stocks and 24/7 Markets 39:59 Solving the On-Ramp and FX Problem 47:39 What Happens After Launch Day? 49:16 Closing Thoughts --- RESOURCES Nikhil Chandhok https://x.com/chandhok Arc https://www.arc.io/ --- Not financial or tax advice. See our investment disclosures here: https://www.bankless.com/disclosures

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

• 0:02David Hoffman?

  Big Post Nation, I am with Nikhil. He is the Chief Product and Technology Officer over at Circle. And coming out of Circle, we've got a pretty big announcement. Nikhil, today is the day. Tell me about what day this is.

• 0:13Speaker 01

  Today is the day of our launch. We're launching Arc Mainnet. We've been working on it for years. We're very proud of the launch today. So it's the first day of a very long journey for us. So very excited to be here.

• 0:26David Hoffman?

  Well, congratulations on Mainnet Day. That's always a very special day. Talk to me about what makes Arc unique? Like, what are the special properties? What are the unique properties that Arc is bringing to the table?

• 0:37Speaker 01

  Right. I think it's useful to step back and talk about Circle a little bit. Like, Circle started off as a stablecoin issuer and built what is now the largest regulated stablecoin. Arc is taking that idea of building regulated financial infrastructure that bridges what is traditional financial institutions and all this new innovation and takes that idea forward and brings it to an L1 layer. So the core features of Arc are things that people may have heard about already.

• 1:16Speaker 01

  Like, we have something called payment finality, which allows for transactions to be truly final within, once they are settled. Settlement time is half a second, which allows for minimizing risk along with the payment finality and allowing you to do rapid transactions on the network. Gas is in stablecoins, starting with USDC, so you don't have to hold a native network token. While for crypto users, this may feel like a small feature, for companies that are transacting, that are holding treasuries, that are transacting in RWAs, this is a very significant hurdle

• 1:56Speaker 01

  to cross because they don't know how to account for things like native network tokens. And so not only do they have to hold inventory of native network tokens, but they also don't know how to count those native network tokens on their books. So that's a pretty big deal. We have other things that are launching that are really unique for a blockchain that speak to our full stack nature. We have Arc Studio, which allows you to talk to an AI and deploy a custom contract, which is how we think all financial arrangements in the future will happen. We have our kits, which allow you to build custom apps on top of Arc. So we've not treated this as just a network launch, but we've treated it as a full stack.

• 2:41Speaker 01

  Like, hey, you want to build a financial application today? How do you get started? What are all the primitives you need? All the way down from the network layer, all the way to the top, being the application layer. So that's what's unique about us. And we're very excited to get it up.

• 2:57David Hoffman?

  I do want to zoom in and expand that tech stack and talk about the different components. But if we were to collapse the tech stack and really summate everything, how would you meme, memify Arc Chain? So Bitcoin is hard money. Ethereum's North Star is decentralization, permissionlessness. Solana is NASDAQ on the blockchain. What's the meme for Arc? What is your guys' North Star? How would you collapse everything you guys are doing into a simple idea?

• 3:28Speaker 01

  I mean, we've called it Economic OS. And when we say Economic OS, we think about things that, like, I mean, I grew up when phones came about. And when phones came about, like, when Android came about at Google, I was there, and there were six-plus operating systems in the market at that time. So it wasn't clear you needed another OS in the market. And what Google did uniquely was, it said, like, we have a problem that we have to solve for chipmakers. There's a problem that we have to solve for handset makers. We have to solve a problem for developers, and we have to solve a problem for users. And if you solve all of those problems together, we will have a very successful operating system. And other operating systems in the past had taken a sliver of the market and solved the

• 4:11Speaker 01

  problems for that sliver of the market. So when we think about Arc and we think about building an Economic OS, we're thinking about solving the full stack of problems. I want to solve application-level problems. So problems like sign this transaction or sign multiple transactions to something as simple as sending USDC from one wallet to the other should not be a thing that users have to deal with, right? Users should not have to think about things like gas. Like, what is gas? It's a very complicated concept. Engineers understand it. Crypto users understand it. But if you believe 5 billion users who are on phones today are going to be using this financial infrastructure, then I don't think we can explain gas to them. We need to be able to explain local money to them.

• 4:52Speaker 01

  So we have 16-ish stablecoins launching on Arc today, and we want to make sure that users are able to interact with the blockchain infrastructure using the currencies that they fully understand. They don't have to use Bitcoin or Ethereum or any other chain for that matter. So I think it is like Economic OS. Like, it's less of a meme. I know it's a little more nerdy than what a meme could be. Maybe a meme will emerge that'll sort of sum up what an Economic OS could be. But yeah, I mean, it's only day one, so I'm very hopeful that the internet will deliver.

• 5:29David Hoffman?

  Let's do just a little bit of the homework that we need to do to understand Arc. What are the technical properties that crypto natives, the hardcore crypto natives that want to pop open the hood and compare Arc to our frame of reference, which is Ethereum, for example? So Arc has a validator set. There's some parts of the validator set that are permissioned. Maybe you can talk about just the basics of the protocol and how that diverges from what the standard is.

• 5:57Speaker 01

  Yeah. So the validator set is permission, and we can get into why it is permission if we have to. But the deployment of contracts is not permission. So anybody can come deploy. You don't need a developer key from us. You don't need to sign up at Circle. So in that way, it is very much permissionless deployment. We don't control what contracts you interact with. We don't control what chains you interact with. It is truly permissionless infrastructure. It is a permission validator set because for the kind of traffic that we're hoping to get, in addition to core internet crypto traffic or the new kind of traffic that we want to get, those users want to know who the validators are. They cannot rely on unknown validators today.

• 6:39Speaker 01

  And we do believe we are at the early stages of getting this institutional traffic onto the chain. And so that's why we have a permission validator set, and it makes getting that traffic easier. So going back to the questions of what else is unique about the chain technically? We have, we announced that we're going to be doing post-quantum signatures. It should launch in beta very soon, and that'll allow for post-quantum signatures, essentially wallets can enforce post-quantum signatures. Other things, our privacy sector. So we've talked about privacy for a long time on chains. Current privacy solutions are kluge.

• 7:24Speaker 01

  I mean, I say kluge as in, like, average user who's using a wallet is either giving up self-custody or is taking on significant financial risk when they're engaging in privacy. What we want to do is do something as simple as, like, you toggle a switch and you can take a transaction that was going to be a public transaction and make it a private transaction. So you can have a mix of both public and private transactions using the same wallet interface. That's unique. There's other stuff under the hood that makes it possible for us to achieve the sub-second finality. We have a new consensus layer. We've already talked about it. We acquired this company to get the Malacite consensus layer.

• 8:03Speaker 01

  All of these things together sort of build what is unique about Arc from a technical perspective. There's going to be new innovation as well. We're going to be looking at other custom sectors for specific type of traffic, whether it's agent traffic or there's payments traffic, so that we can have fast transactions for these new economic actors like agents that are emerging. But that is still a work in progress.

• 8:27David Hoffman?

  I see. Since you brought up privacy, let's just dive into that part. You said that there are public transactions and private transactions. Feels, patterns-wise, similar to Zcash. You have shielded Zcash, you have unshielded Zcash. But is the privacy on Arc complete? Does Arc and the validators, are they able to backdoor the privacy? Or is the privacy actually as strong, for example, as something like Zcash, where if it is private, it is truly locked down and private? How would you qualify the level of privacy that you get on Arc?

• 9:02Speaker 01

  I'm not an expert on Zcash, even though I use Zcash plenty.

• 9:09Speaker 01

  I will say, I will answer the specific question, which is like validators are not going to be able to look at your transactions. That is not a thing that we want. That defeats the purpose of having, uh, having privacy. Like, I, I don't, like, the whole notion, the whole, all private transactions essentially run through T E E's, which is a trusted execution layer. And, and, and nobody's able to look inside those, even Circle cannot look inside those transactions. So like, when I say privacy, it is true privacy. And, uh, financial transactions is just, is just day one of like what we think like these, these things can enable. I'm looking forward to other kinds of applications, like one, one of my favorite applications is, uh, sort of medical applications.

• 9:53Speaker 01

  Uh, I, I'm sure everybody has this experience in their family where they have some medical data about that they're like talking to a G P T about. And, and, uh, and there's some risk in that. It's not like risk free in that, like you will leak that, the G P T might leak that, uh, uh, information to whether itself or to others. And so one application I'm really looking forward to is, uh, is essentially being able to fire up like a custom B M that has a G P T and all of my, like, all of my health data being privately encrypted. And, and me being able to ask like questions in privacy and at the end of it, being able to destroy that B M and essentially get the answers I need and have all of the data encrypted and stored on chain. So that is not possible today.

• 10:37Speaker 01

  And, and so, and instead, what I have to do is like, I sign up for stuff. I don't fully understand. I give it information. I don't, I have to just trust them as to what they're going to do with my information. So privacy is just the beginning. Privacy is a, is a, in my mind, a property of like verifiable compute in many ways, right? Like you are telling me that this transaction is going to be private. And so, but there are many things in verifiable compute that are here, here, yet to come. And, um, I think blockchains and like R can play a key role as we evolve sort of like this core computing architecture that like we have come to rely on for the internet.

• 11:13David Hoffman?

  And just to, just to, uh, make sure I understand the question, the answer. The trust assumption for privacy on R is via T E E's. That is how R achieves privacy. That is the trust assumption.

• 11:24Speaker 01

  We have in our privacy sector, like we talk about it in the white paper, like essentially, yeah.

• 11:28David Hoffman?

  Right. No one can look inside a T E E except for the manufacturer. Manufacturer is probably not doing that. Um, is there a plan to evolve the privacy to something like, like straight cryptography? Or are we satisfied with like the T E E as the trust assumption?

• 11:43Speaker 01

  For now, I think we're satisfied with the T E E as the trust assumption, because we also have like performance constraints, uh, that we want to implement. Yeah. And that is one of the features of a known validator set. Like we know what the T E E's are, where they're running. Uh, and that doesn't mean that you cannot engage in like private cryptographic transactions. Like that is a thing that we have, uh, post quantum signatures that we, that like I said, like we're going to go into beta with. Those are private, like those are, you can engage in other kinds of cryptography on the platform. Like for the purposes of like entering into a private send receive between you and I, yes, we have a T E E based architecture.

• 12:24David Hoffman?

  I want to learn about immutability. Uh, say I am a user on the Arc chain and I mess something up and I've lost a meaningful amount of U S D C, $10,000, $100,000. Uh, and I'm actually also in this scenario, able to prove to you that that U S D C is like actually gone, locked, frozen, burnt, whatever. Am I able to get my money back in any particular way? What's Arc's relationship with immutability?

• 12:53Speaker 01

  It is all immutable. Like it is not like, uh, it is, it is like any other blockchain. Like, uh, unfortunately or fortunately, like I think there's pros and cons, uh, to immutability. What you're describing is a con.

• 13:09Speaker 01

  I'm not interested in rolling back the chain for, for anything, like unless there's like.

• 13:14David Hoffman?

  Rolling back the chain is not a property, is not a feature of our.

• 13:17Speaker 01

  Is not a property of the chain, right? Like it is not like, it is, it is a, it is such a significant event, uh, to do that. Uh, I think users should be careful about like the U S D C that they're using, or for that matter, any token contract that they're interacting with on Arc. Much like they would be careful about interacting those, interacting with those token contracts elsewhere.

• 13:40Speaker 01

  We don't have any special powers, like essentially over here, like change the course of the transactions.

• 13:45David Hoffman?

  There's like, there's this rite of passage that all successful blockchains go through when they are sufficiently successful. And it's the, it's the Lazarus event. So Arc wants to be successful. I want you guys to be successful. I want you guys to have billions and billions upon T V L. Your success is going to attract Lazarus group. Lazarus group is pretty successful. They might get away with something, uh, and they might get away with something large. Um, what, what, what do you think about when you, you think about the potential future event of like the Lazarus group extracting a million plus dollars out of Arc chain? Have you guys discussed this possibility? What, what comes to mind when I put these words in your brain?

• 14:31Speaker 01

  I mean, look, security is a key concern. Like we are focused, um, we are very focused on like making sure that, uh, the chain is secure. We're running audits 24/7. Um, and.

• 14:47David Hoffman?

  I think I mean more in the app layer, like say A V, for example, gets implemented or some lending protocol gets implemented and they get exploited by Lazarus group. And Lazarus group has tens of millions of dollars, hundreds of millions of dollars of U S D C.

• 15:01Speaker 01

  I don't want to speculate on like the specific scenario and like, you know, I don't know what's going into like, you know, this, uh, this sort of security violation. But I'll say, what I'll say is like, the simple principle is it is an immutable chain. It is public infrastructure. There are 20 plus validators, like it's an immutable chain where we are, we're running public financial infrastructure. And we want to do that in good faith, right? So like, I don't know what the specific scenario is. And I think there are a lot of such scenarios and there are a lot of different like input conditions that go into like the evaluation of the scenario. So like, I, I don't, I don't want to speculate on like how we will handle it. But at least the principle, which like going into it is like, look, it's an immutable chain.

• 15:43Speaker 01

  We want to make sure that it is, it follows the properties of, uh, other immutable chains that are on the public internet. And I think if you break that, I think you break trust at a level that like, I think people will have a hard time like sort of like establishing the trust again. So, but we want to be responsible actors in the market. We want to make sure that like our chains are secure, our apps are secure. We want to give like security service this offering to like, uh, we want to make sure that like people who are deploying are like know, know the chain sufficiently that they're not deploying like insecure apps on the chain.

• 16:14David Hoffman?

  Let's talk about what activity is going to be, uh, early in the Arc ecosystem. So there are some of like the, the usual suspects that we would see coming online with an E V M layer one. I would expect to see a Uniswap, an A M M come online, something like A V. Uh, so talk to me about what the usual suspects are. And then also I want to hear about, uh, the unusual suspects, the new partners, the new economic activity that hasn't been found elsewhere in the ecosystem that you are hoping to see come to Arc in its early days. So talk to me about the usual and also the unusual suspects.

• 16:50Speaker 01

  Yeah, I mean, I think the usual suspects are like the borderline protocols, are the A M Ms. It's the, all the exchanges that are like, uh, all the big crypto exchanges that are in the market. Um, we have, the unusual suspects are, um, I guess the large asset issuers, like they are, they have dipped their toes, but I expect them to be more prolific, uh, on, on Arc than they have been elsewhere. Stable FX, which I've talked about, which is like our foray into making sure that, uh, blockchains work not just for U S dollars, but also work for other currencies around the world. Um, and then there's a bunch of like agentic activity, like we have, like, you know, uh, we have a whole agent stack that we've, uh, issued today.

• 17:33Speaker 01

  Uh, we are in the process of like issuing, creating more like agent primitives that allow for agents to prove provenance, agents to prove, uh, uh, what they have done in the past, like essentially being able to prove history. And, and so I'm expecting more of that activity, like, you know, and, and it'll probably be around things that are like native to blockchains, which is trading and such. Like I think so, a lot of these agents will do that. I am expecting a ton of like credit activity to happen. And the, one of the things I'm excited about is agent to credit activity. Like, you know, you start up an agent, you get a little loan and then you go out and like make a little money and then you pay the loan back.

• 18:11Speaker 01

  And, and then you sort of spend this, I mean, looping will take a whole new meaning, uh, once this, like, once these credit markets start functioning, uh, on Arc and elsewhere. Uh, and so I think that will be new. Um, uh, what else? Um, and there's all, I mean, look, it's a, it's a public chain. It is fully connected, uh, to all of the other 35 chains where U S D C is. It has deep connectivity. It has the ability to bridge any asset to any chain. Uh, and so, uh, I'm expecting meme coin activity to like, you know, what I call like, you know, culture apps. Uh, they like memes are not like some part of the internet like frowns on memes.

• 18:52Speaker 01

  Uh, I think memes essentially create culture, like culture used to be, begin elsewhere, but now culture begins on the internet. And so I expect a ton of that activity as well. I'm like, we, we welcome all kinds of activity, like, you know, the internet is not just for, uh, sending emails or doing, uh, video calls. Or like doing banking information and the internet doesn't split out the traffic saying like, well, this part of the internet is just for banking. This part of the internet is just for playing games. We want to make sure that everything is possible.

• 19:19David Hoffman?

  As new layer ones have come online, we've seen layer one teams really make like venture style bets on a specific type of activity, a specific type of app. Like if you guys want, you can go toe to toe with Ethereum on borrowing lending inside of AVE or you know, AMM swaps inside of Uniswap. I don't know if that's where you guys are going to be the most successful. It's kind of like table stakes to have it, but I don't know if ARC is ever going to beat Ethereum on, you know, Ethereum's slow DeFi near monopoly. So what are some of the venture style bets? I think you mentioned agents a bunch of times, but what are, what are going to be the activities on ARC

• 19:59David Hoffman?

  that you guys are betting on that bring 1 billion transactions to ARC like soon? So what are the, the new activities that you guys are betting?

• 20:09Speaker 01

  I think like, yeah, first I'd say like, you know, Ethereum is the granddaddy of everybody, right? Like, so like, we are not here, like, I, I think if all we did was we took activity from Ethereum and moved it to ARC, we didn't really grow the market like, you know, it doesn't really help our business because we are the largest, uh, USDC has a, uh, the biggest chain for USD, uh, USDC is Ethereum. And so like one of, one of our interests in like getting ARC out is to make sure that like USDC like gets benefit from Mark and if all we're doing is moving, you know, like deployment of USDC from Ethereum to, to ARC, like it's not, we didn't, and we don't grow the market. That's not really exciting to us. Um, so that's one. A second I'd say is like, yeah, I do think like the agentic activity is going to pick up.

• 20:54Speaker 01

  Like agents should become like independent economic actors. Today, all the agents are sort of private, like I can't share my agent with you very easily. Like I, I share a skills dot M D file, you run it through your agent V M and you're able to sort of like fire up the same agent and even then you're not getting the same guarantees I have. I do think like these agents will become economic actors. They will sort of present themselves on the internet. They will have to prove that they have done a certain amount of activity. The question is like, how are you going to come to rely on the proofs that the agents are presenting? I think they have to be cryptographic proofs. So we will be a home for these agents where they can actually record their activity, provide proofs around, around the activity.

• 21:34Speaker 01

  What agents do in the next three or four years will be no different than like what websites did like 20 years ago. Like 20, 25 years ago, websites were HTTP, they were not secure. You could go on like, you know, you could have all kinds of attacks, man in the middle attacks. Like, and you, you wouldn't even know if you're talking to the website that you think you're talking to. Like all of that gets, all of that got solved by like new protocol layers, like new actors coming in, giving certificates to websites and like, and making sure that you were actually in it. Your browser was truly talking to the website that you were, you thought you were talking to. I think agents will have a higher bar. It's not just that you're talking to the agent that you think you're talking to, but the agent actually has a work history, has like, has the economic output that they claim

• 22:18Speaker 01

  that they have actually done. So how are you going to verify all of that? All of that should move to ARC. And if you make, um, payments really easy, especially for nested agents. If I'm an agent and I have a policy and I want to fire off another thousand agents and I want to give those thousand agents a wallet and a policy and some money. And those thousand agents can essentially like transact with each other and not, and further fire off other agents. We keep sort of like reasoning about it, reasoning about this in terms of like how nested the activity gets and how connected the activity gets. The only real way to do it is to do it using stable coins and is to make sure that, um, and to do it in a place where you're carrying minimal risk when these agents are transacting with each other. That's why payment finality matters, right?

• 23:02Speaker 01

  That's why sub second finality matters. That's why credit markets for these agents matter. So all of that traffic is new and novel and like we are going to be using everything in our stack to essentially enable all of that traffic. So it's not just about, um, it's not just about like, hey, can your agent get a, you know, can you get, can your agent get a method of payment and can they go transact somewhere on the internet using X four or two or some other protocol? It is much more than that. It is like, hey, what are all the things that agents need? So that they can truly become fully economic actors and like, much like you have a social security number, you have a work history, you have like an ability to prove all of that. How does an agent get all of that? That infrastructure doesn't exist. And I'm hoping, uh, this is not just on ARC, this is truly distributed on the internet, right?

• 23:47Speaker 01

  Like we want everybody to be able to access this infrastructure and we want this infrastructure to be in the open. That's what, that is sort of like a core thesis for us when it comes to like agentic, the agentic platform that we're launching on ARC.

• 23:57David Hoffman?

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• 24:41David Hoffman?

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• 26:45David Hoffman?

  Can you tap me and the listeners into what the current state of play is in the world of agentic commerce? Because, uh, I'm waiting for the world of agentic commerce to kind of come to me. I'm not really pursuing it. I'm not deep in those weeds, but I do know that agentic commerce is a very big buzzword and people love to talk about it. I haven't yet experienced it. So what gives you and ARC the confidence that there is something there actually real worth pursuing rather than like a bunch of buzzwords that get people excited on podcasts? So like tap us into what's going on in that neck of the woods. What's real?

• 27:20Speaker 01

  Okay, let's talk about like agents as actors, like essentially, and then let's talk about agentic commerce as well, right? Like so agents as actors, agents are trading. They're trading, like people are firing up agents. Everybody has an idea, like a specific idea, like specific alpha that like they'd like to go after. And they are firing up a pool of agents that are being used right now to do the trading activity right now. We see it on chain. We see the traffic patterns on chain. Agents are doing it. What you don't see enough of is like your agent taking your credit card and making a purchase for you. That I think is what you mean by like agentic commerce not being there. I do think in the last week or two, we have seen a bunch of new agents come out

• 28:01Speaker 01

  that are starting to use like, they're essentially taking your credit card, storing it in a vault, using, uh, like trading one-time auth essentially and policy to go and spend that, uh, spend that money somewhere. That is just, I want to say those agents themselves are only a month old. They are not like very well distributed in the world right now. When those agents become much more distributed, like, uh, you will see like those agents not just transacting using credit card rails, but also transacting using a stablecoin rails. And at that point, they'd be buying, uh, they'd be buying things that you use like in the real physical world or the meat world as, as we like to call it, like they would be using it to buy like, you know,

• 28:42Speaker 01

  whether it's a plane ticket or whether it is like, uh, whether it is, um, something you want to like, you know, a piece of clothing that you're looking to, looking to buy. I don't think the interface for that has existed so far. I don't know if you've kept up with these agents like in the last month, but like I now I have my credit card enabled with an agent. And my first agentic purchase is actually a funny one. My cat needed flea medicine. I went to the, I went, I went to the vet. I got the prescription and I had my agent go and buy it from Chewy. And I was like, I don't want to deal with this. Can you please just make sure that this lands at my house? And it did. And so that is an example of agentic commerce, commerce transactions that you really don't want to engage with yourself. But on the other side, on the blockchain side, we still have like agents essentially like training.

• 29:27Speaker 01

  Like, I mean, the agents are like, agents will be getting credit very soon. Like they will be taking, they will be sort of managing risk very soon, like at more scale than they are able to do right now.

• 29:37David Hoffman?

  Do you think, so there's already commerce on the internet? We have like web two commerce.

• 29:41Speaker 01

  Yeah.

• 29:42David Hoffman?

  How much of agentic commerce will simply consume normal web two commerce? Or is it more that there is net new commerce that will be discovered, built, built for the first time with agentic commerce? Or is it a little bit of both?

• 29:57Speaker 01

  Look, if it's goods and services, like you're buying, like goods is like, what we just described is like goods, goods commerce, right? Like you're going out there trying to buy a widget and you want to make sure that the agent does a good job of buying the widget and like deals with the complexity of it. Services commerce is very different. Like I think services commerce is agents as essentially doing human-like work and, and, and sort of presenting that they can do full end-to-end human-like work. That I think is totally new. And that is either you can argue is like replacement of the, like, you know, human labor or is additive to human labor or it sort of fills in the gap where human labor has not been able to fill in the gap because it's just too expensive for a human to do it

• 30:40Speaker 01

  or the task is not big enough for a human to go create a company to do like $2 tasks like that, like an agent will take on. I think that's the opportunity, which is to say like, hey, I can either go do all of these things myself by using my own agent virtual machine and then building my own agents to do all of that. Or I can go hire a bunch of agents on the internet who can go do these things for me. We're not there yet. I think they're closer to the goods, goods commerce right now because I see that as like superbly imminent. Like I think like I just, I just give you an example of something of commerce that I didn't want to engage with, that I was able to like utilize an agent to do that. But like when somebody is able to come in and say like, hey, look, I have an, we have an agent marketplace. You can, we can see listings in there where people are able to say things like,

• 31:24Speaker 01

  can you translate this text for me? And then agent will come back and say like, yeah, I'll do it. You can pay me over X, Y or Z and it's going to cost you 30 cents. That's an example of something that is, I don't think a human is setting up that company today to go translate like, you know, a paragraph of text and like, you know, is going through the entire economic negotiation of like, hey, are you going to pay me? And like making sure that like the payment happens and making sure that the work comes out and the work and making sure that the work is of high quality. So those piecemeal work that currently that humans either cannot do or are like not incented to do will get outsourced in my mind from like your private sort of like workspace or your private life onto the public internet.

• 32:07Speaker 01

  And there, these agents will become specialists in what they are able to like do, whether it's like an agent that can, maybe there's an agent that all it does is like, figures out like how to order cat food or like how, figures out how to do like, you know, pet medication or anything like that. And, and that agent is going to be far superior to anything I can build. And so, and much like there was this specialization on websites that happened, I want to say 20, 25 years ago. And like, it's about like, you know, in the 2002s that it started. I think the same thing will happen with agents. I think the current agents are like overly simple. They are like, we also currently assume that all agents have access to all data. None of those things are going to be true in the future.

• 32:50Speaker 01

  Right? Like I think there's going to be a desire for people to sort of like preserve their data. There's a desire, there's going to be a desire for people to sort of want to isolate their data and make sure that they're only sharing data that is necessary. And all of those things will lead to like specialized economic actors existing on the internet. And like, and, and then like transactions happening between them with humans and then, or like three-way transactions, like I'm a lot of times when I get a ping at work, I'm not sure like if I'm getting that a ping from an agent or I'm getting it from a human.

• 33:18David Hoffman?

  So in this world of agentic commerce and agents with money, agents with private keys, what parts of this stack is Arc and Circle really taking ownership over in terms of like building and innovating and refining versus what other parts are like blockers for you guys that you guys need other parties, other, you know, startups, other tech companies to build to really complete this whole holistic agentic? What part, what part of the agentic stack do you guys touch? And then what other parts of the agentic stack are you guys needing to like partner with and collaborate with?

• 33:51Speaker 01

  Yeah, the, the part of the agentic stack that we touch is like basically bottom up, right? Like we are not an application level agent. We're not going to build an agent that says like, hey, here's a, I don't want to say never say never, but like, you know, be an example that is like really adjacent to us. That is, that's not something that we're going to be building immediately. It's like go figure out like what like stocks to buy to go invest, right? Like all of these assets that are issued on Arc. If you come in and you say like, hey, this is my portfolio. This is my, this is my sort of like investment horizon. I am pretty sure there are better agents out there than like what Circle can build or like is building or plans to build that will get built. And so like, I'm not interested in going and building that agent. What I am interested in building is like all the primitives that are needed to discover that agent,

• 34:36Speaker 01

  all the primitives that are needed to like approve that this agent comes from a good economic actor who is not going to steal my data and like is, is, is going to try to hack me using, whether it's like directly or through social engineering or something else. Right? And, and I will, I want to be able to sort of prove to the user that this agent has an excellent work history. Like they are like, you know, they have sort of done this for 10,000 other users and they have had excellent results. All of those primitives, we want to build. Right? That means that now the agents can live on Arc. They can transact on Arc and as they build history on Arc, they are able to like essentially prove to users that they are good economic actors. And they're able to prove to other agents as well. Like it's not just users who will care about this.

• 35:19Speaker 01

  If I have an agent and I tell them to go hire another agent, they have good incentives to make sure that that agent that they are hiring is a good agent. Is, has all of these like properties. So towards that, we are building an agent marketplace. We are going to, we are building an agent reputation system. We are building ways for agents to pay each other very small amounts of money, like almost a millionth of a dollar using Circle nano payments. We're making it so that agents can get credit and like make sure that like, if you are able to prove that you are able to run a book and that is a profitable book, like how should you get credit like, you know? And, and when you start up, like you have no money. How are you supposed to on-ramp as an agent into, into the money?

• 36:02Speaker 01

  So like all of those problems at the, at the lower level, we will solve or we, we are hoping to solve over the next like year or two. And the problems on, on top of that are like the applications themselves, which I think others will build. And I don't think those applications are just financial applications. This could be any number of applications. Travel, commerce, education, like all of these. The underpinning for all of these activities is value exchange. And that value exchange that needs to happen, needs to be trustworthy. And that value exchange needs to be final. And then my value exchange needs to be fast. All of that Arc can enable, yeah.

• 36:37David Hoffman?

  I want to turn to the world of tokenized stocks because that's also a phenomenon that is happening in the crypto industry right now. Are you guys going after trying to compete with things like the NASDAQ or the New York Stock Exchange in the sense that, you know, those two things are dollar-denominated? With Arc, we have a dollar-denominated blockchain. Blockchains are asset transaction ledgers. Are you guys trying to go and be competitive in the world of liquidity and trading volume for tokenized stocks? Or are you more passive on that front?

• 37:07Speaker 01

  We want those applications to use us, right? Like we are not the exchange. We are not the, we are the infrastructure on which you can build an exchange. We are the infrastructure for settlement.

• 37:22Speaker 01

  So like, I mean, I think like that's, that's fairly obvious. I think there's no like, you know, there's no secret there. We're not competing in the exchange market. We want these actors to use our, to do settlement and to enter into complex like, you know, financial transactions. Have those financial transactions be expressed as smart contracts and have those be on ARC. That's our hope. And, and so do we want more of these real world asset issuers on ARC? Absolutely. We're going after them and we're like, we're trying to solve for problems they may have, whether it is like core chain features that they have, or whether it's liquidity issues that they are trying to solve for. Maybe it's like USDC on off ramp issues that they are concerned

• 38:03Speaker 01

  about. Maybe sometimes these on off ramp issues are combined with geographical issues being like, hey, I have an on off ramp issue in, in the EU or in Japan, as I'm trying to do this specific trade. How does that work? But like, I do think like there will be, there is, there's two versions of this. One is like, hey, I'm doing an activity already. Can I do it on chain? Because I can then unlock 24/7 activity with all the same actors with no new actors participating, because now you have this 24/7 infrastructure. And then there is the piece which is, well, I have like all this new demand that I can bring to, which I can bring to this asset, because I can open up access to this asset all over the world. And USDC has both properties, right? Like you can, if

• 38:45Speaker 01

  you're in the US, you have access to bank accounts. But if you have USDC, you can settle with each other 24/7. But because you have USDC, you can now actually give back people, people who are in emerging markets, people in the EU, people in South America, access to USDC. I think the same thing will be true for stocks, right? Like, I think in the US, people will, will probably move on chain, because they can like trade faster and manage their liquidity better, manage risk better. Internationally, I think we will have like new demand coming in. Because like people who want to raise money, as like AI becomes more proliferated around the world, there should be more companies in the world. There are more companies in the world, because you can actually hire, go hire these economic actors around the world. Then these companies will have like

• 39:28Speaker 01

  stronger need for like capital formation. And these capital formation, like, well, they won't want to issue like, you know, some sort of token or some stock, essentially do that capital formation. So, and the other, on the users on the other side will want to get access to the best tokens or the best stock around the world, to make sure that they're getting the, you know, the best outcome for the capital that they're investing. So like this, this whole world is about to blow up in terms of what access users have, and then what access even the companies have in terms of like the investors that they can reach out to.

• 39:59David Hoffman?

  What about the world of on-ramps onto ARC? Yeah, I think Circle and ARC are, is uniquely positioned here in that Circle has some of the best banking relationships, if not the best banking relationships in the entire crypto industry domestically inside the United States. What about building like, kind of like a first party on-ramp system into the ARC blockchain? And then also even extending that into non-US jurisdictions, where we can get like non-US dollar stable coins with direct banking relationships right onto ARC? Because the on-ramp problem has never truly been solved at a large scale in crypto. And really, as if you want to

• 40:43David Hoffman?

  distill down what Circle is, it's like the best on-ramp ever. Like, that is what USDC is, is like the best, highest, biggest conduit between bank dollars and Circle dollars. What about building out like the richest, best set of on-ramps? Is that something on your guys' radar?

• 40:58Speaker 01

  Yeah, I mean, like from an institutional on-ramp perspective, we have, you're right, like we are the best on off ramps for the whole ecosystem. I was just looking at something the other day, and we counted like almost more than $900 billion of like off ramping that we have done over the span of USDC. So like, and that, that means that that many people had sort of like USDC, that on-ramped into USDC, and that's almost a trillion dollars of like USDC that is on, on off ramped over the, of this, over the lifespan of USDC. So yes, we do have good institutional grade on off ramps. Users currently get access to these on off ramps using primarily through

• 41:41Speaker 01

  exchanges. I think everybody understands that. We are working on more retail, retail focused on off ramps. They will be part of, like, they are part of the ARC, ARC launch. There's more coming in terms of making sure that users in other markets can also get access to these on off ramps. And then from a liquidity perspective, like, I think if you're getting, trying to on off ramp into, on ramp into a local stable coin, the question is like, how does that liquidity work? And there, we have a ton of experience in provisioning liquidity around the world. We understand the cost structure of provisioning that liquidity. We also, we talked a little bit

• 42:26Speaker 01

  about stable FX, which is our ability to sort of swap these local currencies into USDC or some other stable coin. We're working with market makers who can, on the maker side, who can like go make these markets. We're also working with takers to make sure that like, and these takers essentially represent, represent end users. So these are large financial markets. I think everybody knows the size of FX markets, like it's in the trillions traded every day. And, and the dollar is like pretty dominant in terms of like, as a quoting asset. So we're just on day one of like trying to figure all of, figure out all of that, right? And a lot of these things are not exchanges. These are private pools that operate for like these on off ramps. Like, and so

• 43:11Speaker 01

  we are connecting into all of these private pools and making sure that these private pools have access to liquidity that is ARC native. And then we have like a core protocol on ARC that allows for people to sort of like go and access these liquidity pools. So it's not just about the issuance. It's not just making sure that like, you know, ARC has finality. It's also like going and finding these liquidity pools and then connecting into those liquidity pools and making sure that those folks also have access to things like Circle Mint, which is a product from Circle, which allows people to come in and get access to USDC and get on off ramps into USDC. So that, that's where the full stack argument matters, which is to say like, yes, is it just not, is it like another L1? Or is it like, is, is, does it have applications on top of it?

• 43:55Speaker 01

  And absolutely, it has applications on top of it, which is to say the applications are other stable coins, the marketplaces to trade those stable coins, and the pools of like liquidity that will make it possible for those marketplaces to exist. And, and the additional Circle products that are needed to actually enable those pools of, the pools of capital to be successful and like be profitable. All of that needs to fall into place, and all of that needs to be compliant, and all of that needs to be like, you know, be okay with the regulators and all of that. So that's Circle's value as it gets into this game.

• 44:29David Hoffman?

  Right after Agentic Commerce, I feel like for, for FX is like the next biggest golden goose that you guys at Circle is really just right next to. I don't know if Circle has intent to go into like adjacent economies. I know that there's the Euro, Circle already has like a Euro product. But really, I think the picture gets completed when basically all of the fiat currencies are tokenized in a high fidelity way, all in one place. I don't know if Circle is trying to go and do the role of Circle in every single jurisdiction that has like a well-used fiat currency. But that seems very close to what Circle is already doing, and also very valuable.

• 45:14David Hoffman?

  How is Circle and ARC thinking about that?

• 45:16Speaker 01

  I agree. It's very valuable. I think it is, it is how, how things should work. They don't work like that today. Like, so here, a few things are happening. One is Genius goes into effect in January, right? Like, so once Genius goes into effect, we have a regulatory framework that is like, which is being overseen by the feds. What does that mean for other countries? The other countries are waiting for like the US laws to be final, so they can finalize how they will do stable coin laws in their country, right? And so this is true for vast majority of the world. So, one, once Genius happens, we expect the regulatory frameworks across the

• 46:00Speaker 01

  world to evolve, to support more local stable coins. Second, I don't think it is feasible for us to go operate stable coins in like, you know, over 190 countries around the world. Like, that's, that's the number of countries in the world. We have like stable coins in the two large markets. We have the USDC and we have the EU. And for now, we're gonna, when it comes to issuance, like Circle issuing the stable coins, I think we're gonna stay with that. We're gonna go partner with other stable coins, because these, these local actors, they, they know the regulators well, they understand local law well, they understand local user needs well, they have

• 46:42Speaker 01

  good relationships in the market when it comes to like money traders, and they understand like how to, how to like make the economics work. We're gonna, we're gonna keep working with them. Our, our value add is going to be the connecting like these pools of liquidity, and making sure that we have, we are running like stable FX, which is part of ARC, so that like users can come in and they, they can just go query these pools of liquidity for like the best rates that they can get, and they can get the liquidity they want. So it is, currently in the market, there's primarily AMM-based solutions for like, for the, for these things, and you don't get a lot of liquidity over there. So like, we have AMM-based solutions on ARC as well, but like

• 47:23Speaker 01

  an RFQ-based system, which allows for like this liquidity to be there, and to make sure that like, the transaction is successful. As in like, you don't like put up your dollars and not get like the local stable coin, or the other way around, right? Just making sure that that whole protocol works in a permissionless way is what we're trying to focus on.

• 47:39David Hoffman?

  Nikhil, so today is launch day. What are you guys focused on in the very short term? So the end of this week, next week as well? What are your near, nearest term priorities that you guys have to get ARC up and running and successful?

• 47:52Speaker 01

  I mean, look, it is, we're gonna probably go to the war room and hang out there, and make sure that like things are working correctly. It's a little bit of a relief, because we've been working on it. I think Circle has wanted to, wanted to invest in this space for a long time. We have been working on this L1 project for I think close to 18 months at this point. So I think we might, we might take an hour or two to just like have a beer and like take a break. And then get back to it, which is to say that like, we want to make sure that like, you know, we are serving our users. Like I'm expecting users to come in and, and, and, and, and start transacting on ARC. And we want to make sure that like, you know, transactions are working, privacy is working.

• 48:37Speaker 01

  Stable FX is working, like the institutional RWAs have the liquidity they have like that. Like we've promised a lot in terms of like how much functionality is going to be available on ARC on day one. So just making sure that all of that functionality is immediately available and is working as users expect. And it's working not just for us, it is working for developers, it's working for users. For the next three months, we have a very rich roadmap in terms of like new privacy features. We have like new agent features coming out. We probably add more validators to the set as like things mature on our side. And so, and then eventually we're planning for a proof of state launch as well. So we want to make sure that we are ready for that as well. So like, those are the things that we're going to be working on. Yeah.

• 49:16David Hoffman?

  A quick question, does Jeremy have any pets?

• 49:22David Hoffman?

  Do you know?

• 49:23Speaker 01

  As animals?

• 49:24David Hoffman?

  Yeah. And like, does he have a dog or a cat?

• 49:27Speaker 01

  He's never mentioned it to me. I've known him for five years now. So, um.

• 49:32David Hoffman?

  Okay.

• 49:32Speaker 01

  Why do you ask?

• 49:32David Hoffman?

  No pets. Okay. Well, cause usually the name of a founder's pet is a pretty hot meme coin target. And so I, I know you guys are trying to do.

• 49:43David Hoffman?

  I'm sure you can. I know you guys are doing like a G2 commerce and all that kind of stuff. But the first thing that's going to happen on ARC is meme coins. And so if Jeremy's got a pet, I want to know its name, but maybe I'll have to dig around in a, in a different location for that.

• 49:56Speaker 01

  I'm very sure if you can, you can tweet at him or like you can DM him and he'll get back. And Jeremy's pretty open and Jeremy's pretty active on Twitter. So like, or X, sorry. And, and so, um, and Jeremy loves the internet. Like, I mean, like Jeremy's an world internet founder, like he's sort of created two internet companies before this. So I think like, while Jeremy presents well in a suit, which I love, he's truly at heart like a, a person of the internet, like, you know? And so, yeah, I think he's looking forward to all of it is, is like my take on it. He's sort of, he's, he is so excited about this. He, he has been wanting this, wanting to work on this for some time.

• 50:36Speaker 01

  And like, it has taken a certain sort of like, you know, certain path, like we went public last year. So it has taken us somewhat like, you know, circuitous path to get here. But like, I think he's very excited to be here and I'm sure like he'll probably reveal the name of his pet himself.

• 50:55David Hoffman?

  Yeah. Nikhil, this has been great. Thanks for coming on the show.

• 50:59Speaker 01

  Thanks, David.

• 50:59David Hoffman?

  Bankers Nation, guys know the deal, crypto is risky, but not risky enough. The institutions have landed, so we're going even further west. This is the frontier. It's not for everyone, but we are glad you're with us on the bankless journey. Thanks a lot.