00:00So tell us a little bit more about this deal first of all. Yeah. Well thanks for having me. We
00:04started native markets because this is a time with the transition to digital assets to build new financial institutions on
00:09top of blockchains and then build these new markets. And we competed to win the USDH ticker to build the
00:15first native and aligned stable coin on Hyperliquid. We set a new precedent for the level of the economics that
00:21we could share with the platform. And then only eight months later the market has moved. And so Coinbase and
00:27Circle emerged and we're willing to do a partnership with Hyperliquid.
00:29So there's plenty more to be building on Hyperliquid of native markets for native markets the company and crypto native
00:36markets. But from here we are we are handing over the native stable coin. Why did you join in that
00:43Hyperliquid ecosystem from Uniswap. Yeah. So I started digital assets at BlackRock almost 10 years ago. I built many fintech
00:50businesses at BlackRock. Joined Uniswap as president and COO when it's 10 people at the very beginning of DeFi summer
00:55and sort of like DeFi emergence. I then
00:59decided to build on Hyperliquid because so much of what had held back adoption of blockchains in the last five
01:05years since kind of DeFi summer and the emergence of excitement about them was that they weren't fast enough, they
01:10weren't cheap enough and they didn't often include assets that appeal to a broader universe of users.
01:15And Hyperliquid is fast, cheap. It allows to charge a network fees for where there's a willingness to pay for
01:21trading, not just any and all transactions equally, which is how many other blockchains operate.
01:25And also the perpetual future accelerated the adoption of real world assets. You just need a stable coin and a
01:30price and users can trade oil, stocks, gas, whatever and have access. So it seemed to me like the next
01:36phase of emergence and growth of digital assets.
01:39But why not launch a general purpose competitor to USDC? Why choose to build a stable coin for a single
01:45DeFi exchange like Hyperliquid? So Hyperliquid had a pretty unique set of circumstances. Circle hadn't launched USDC natively.
01:51That meant that it's sitting in a bridge. It had some most of the USDC collateral that was on Hyperliquid
01:56was sitting in a bridge and had some risk.
01:58So that was an opportunity to launch a stable coin that was minted natively on the chain. So safer. Also,
02:03you know, Circle didn't at the time and USDC didn't share any of the any of the yield with the
02:08users.
02:09And how much can be shared with users in a platform has been an open question since the Genius Act
02:14passed and now with clarity.
02:15But it did seem like there wouldn't be zero. Right. We would end up in a world where users and
02:20platforms that create distribution would receive some of the economics of what they're creating out there.
02:25So it seemed like an obvious opportunity to move the market forward. We shared 50 percent of the yield with
02:31Hyperliquid. And now this deal with Coinbase is going to be well above that in the vast majority.
02:35So you can see how much we've moved the market and the market overall has moved in the last few
02:39months. OK. I want to get a little detailed here and sort of like pull back the layers here because
02:43USDH is backed by BlackRock and Superstate Reserves through Stripe's bridge platform.
02:47Yeah. You're now part of Bridges open issuance network alongside Phantom Meta mask and others. What does this mean for
02:53Stripe? Do you think Stripe is sort of becoming like a new circle?
02:57Does it make native markets dependent on Stripe? Like what's the relationship there?
03:01So we were actually the first open issuance product and sort of co-designed and co-built it with them.
03:06How do you build a stable coin that works really well on a blockchain and also can quickly go to
03:11a bank or a brokerage account?
03:13Today's friction still exists between going between banks, brokerages and blockchains.
03:18I think Stripe has done a tremendous amount in stable coins well beyond the open issuance product that they launched.
03:23For many companies, stable coins are an opportunity to expand globally way faster, right?
03:28To have faster global payments.
03:30And I think you see a lot of partners that are launching their own stable coins trying to figure out
03:34if they can capture some of the economics with their own distribution.
03:39Honestly, USDH had the most organic growth of any stable coin launched since Genius.
03:42I think it's actually proving much harder than people anticipated to bootstrap liquidity and drive organic growth.
03:47But I think we'll still see a lot of people try.
03:49So, Mayor Catherine, you have this unique vantage point as an issuer, as an operator, as a regulatory advisor.
03:55You also sit on the CFTC's Global Markets Advisory Committee.
03:59We've been talking about how the Clarity Act has passed one important milestone.
04:03It's going to go to the full Senate for a vote here.
04:06How do you look at this Clarity Act?
04:08What's your take on the compromises that were reached?
04:11There's so much focus on the Clarity Act.
04:13I think the DeFi exemption that you were just talking about is also extremely important.
04:17Because you asked how will that affect New York Stock Exchange and NASDAQ.
04:20I mean, these kinds of exemptions mean that that kind of technology is available to them as well to integrate.
04:25So, I think there's a lot of to look at and clarity.
04:28There's a lot of detail that I think will determine how appealing tokens are as new form factors and instruments
04:33to launch.
04:34But I think a lot of the stuff happening at the CFTC, at the SEC specifically, is going to drive
04:38just as much change.
04:39So, do you think traditional exchanges have what it takes to compete when it comes to 24-7?
04:45That's a hard question.
04:46I mean, I think there are a lot of open questions about what makes good 24-7 markets
04:50and how the world prepares for the kinds of risks, operational and technical, that they'll bring.
04:55And that's a question for today's incumbents, who actually may be just as prepared
04:59because they have big staffs and teams and risk management.
05:01I mean, they've been getting ready for this moment.
05:03Totally, totally.
05:03So, look, they've spent years, like when I was at Uniswap, we've spent lots of time with these big institutions
05:08and exchanges
05:09and they understand what the technology can do and the ways it challenges their models.
05:12So, I think there's been a lot of anticipation of what could change.
05:17And so much of it depends on the rules and how the rules change.
05:20So, we are in a platform shift, not just in technology, but also in financial regulation.
05:24What is the biggest opportunity for them that you think they may be overlooking right now?
05:29I don't know what they're overlooking because it seems like they're doing a lot.
05:32It seems like many of these big, and that you saw, announcements from NASDAQ today, ISO last week.
05:36Like, there's a lot of activity.
05:38I do think that thinking about the safest way to have 24-7 trading is important.
05:42Access to private markets.
05:43We see a lot of announcements and news there.
05:46There's tremendous awareness among all kinds of investors that they're missing out in a lot of wealth creation in private
05:51markets.
05:51Thinking about the right, safe ways to get people access to that.
05:55I think those are two really big areas.
05:56Is there any downside to 24-7 trading?
05:59Totally.
06:00It seems like low liquidity environments and, like, big moves.
06:02But that's part of where, like, DeFi protocols or some of the protocols that we consider DeFi, right,
06:07so that are just automated software code can help kind of bridge the gaps, right,
06:11whether that means that you have automated execution.
06:14You know, I used to joke that at Uniswap we had a massive trading day.
06:17It doesn't feel any different than a light trading day because the software just works.
06:20So if you just kind of think about what kind of market structure can function well in lower liquidity environments,
06:25I think that's the kind of, like, thoughtful design to make a transition to 24-7 markets work.
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