00:00More on the future of crypto, we are joined by Jeremy Allaire, Circle's CEO and co-founder.
00:04Jeremy, thank you for joining us. You said last month that the remaining Clarity Act
00:09is very much resolvable. What changed? And was the fight over stablecoin rewards
00:13ultimately the issue that made us non-passable? I mean, look, a couple of quick things. I mean,
00:19a failed cloture vote is not that legislation is done. I think, you know, the Genius Act failed
00:25cloture vote as well and then went on to pass. And I think, you know, you see a lot of
00:30interest
00:30across industry, across both sides of the aisle who want to get this done. And so I think the
00:37reaction of this is over, et cetera, I just don't buy it. That's not how politics works. And people
00:43continue to work on things. And I think they will. So that's my kind of top line on that.
00:49Jeremy, I'd love to hear your thoughts just on the addressable market for stablecoin usage. I mean,
00:53how would you define that? What's the size of it? I mean, obviously, you know, I've seen people look
00:58at M2 U.S. money supply as the $23 trillion addressable market. Talk to us a little bit
01:03about the future of Circle, about the stablecoin market in general. Yeah, I mean, I think the first
01:09thing to note is that, you know, we now have we actually have settled law. We have federal law,
01:14the Genius Act, which goes into effect in January. And as of January, digital dollars like USDC will be
01:20legal electronic money in the U.S. financial system and therefore in the global financial
01:24system. And they will be able to be used by banks, in capital markets, by payments firms,
01:30by corporations. Public companies will be able to use these like cash. And they have an incredible
01:35technological utility. And that technological utility continues to expand dramatically, including
01:41with like our new operating system, ARK, which launches today. But the core of this is that
01:45we now have this new form of a very safe, full reserve digital currency money, and it will expand
01:52its use as the Internet consumes more utility as well. And so when we think about the TAM,
01:58there's sort of the existing TAM of essentially, you know, non-interest bearing cash and demand
02:05deposits that exist in money in the world today. That's about $60 trillion. And then there's all the
02:11utility for the use of that money. And I think like other past Internet paradigms, when Internet
02:17infrastructure emerged that kind of drove the costs of doing things down to zero, the velocity of those
02:23things increased extraordinarily large. And so our belief is that the transactional volume, the money
02:29velocity, and the utility of money will continue on an exponential curve, primarily driven by these new,
02:35very safe digital dollars. And so the TAM, in terms of utility, we think is much larger than the
02:40existing financial system. And then the TAM, in terms of the monetary base and monetary supply,
02:44that is, you know, ultimately macro driven as well. But I think this form of digital cash will be quite
02:50attractive and substitutional for other forms of electronic money that we have today.
02:54Before we get to your new blockchain called ARK, actually, congratulations on that. I want to stick
02:59a little bit with the Clarity Act. So if Congress doesn't give you the market structure bill that you're
03:03looking for, does that change Circle's strategy at all? Well, first of all, the most important
03:10legislation that we care about is federal law for stable coins. And we passed that with broad
03:16bipartisan support last year. The Genius Act is now the rules are made by the Fed, by the OCC,
03:22by the major regulators. They're going into force in January. We have a national trust bank, Circle
03:27National Trust, which is going to be a key part of the infrastructure of USDC. And so we will be
03:32in
03:32an incredible position to provide this technology, provide the actual digital dollars and to service
03:38financial companies, corporations all around the world. So we don't need the Clarity Act for that.
03:43We have the law that we need to scale that part of our business. Now, we do obviously care about
03:48the development of trading markets and futures markets. And, you know, there's a whole bunch of
03:54stuff that ultimately making sure things like DeFi can continue to grow and thrive. And I think I
04:00share I share Brian Armstrong's view on this, which is that a industry is just going to continue to
04:06execute as they have. The technology improvements are extraordinary. The velocity of that is
04:10extraordinary. And B, regulatory agencies have an incredible amount of capability to make sure that
04:16the rules are there. And I think over the next period of time, you're just going to see that deepen
04:20and harden and much broader financial market participation. This is an irreversible trend.
04:26It's accelerating. This is the best technology in the world for the future of the financial system.
04:30So that will move forward. And whether we have settled federal law in the next month, two months,
04:36three months, six months or two years, this is an irreversible megatrend that is going to
04:41completely reshape the financial system.
04:43Jeremy, would you agree that building an institutional grade layer one blockchain
04:46like ARK requires having strong partners? Because I see Visa. I see the DTCC. I see BlackRock. I see
04:52some of the names that you've aligned yourself with here. You know, talk to us about how important it
04:56is to have a cohort of partners that can work together, that can communicate and obviously that
05:00can control a lot of the world's wealth.
05:03I mean, what we've done is we've just booted up a new economic operating system. It's booted up as of
05:09today. Hundreds of companies have deployed and integrated their technology, their products,
05:14their services to it across every major category, the financial system, the digital asset ecosystem,
05:20all around the world. World leading companies that run the financial infrastructure of capital
05:26markets, of asset issuance, of payments are all here with us. And this is a major moment.
05:32The Internet is being upgraded. It's being upgraded with artificial intelligence and it's being upgraded
05:37with an economic system. And we need major stakeholders there with us. So one of the
05:42things that makes ARK very unique is that it has a network token, the ARK network token. And that is
05:48not yet available, although we minted 10 billion of the token this week. But ultimately, what that
05:54means is that the participants in the network, the participants that help run the infrastructure of
06:00the network can benefit economically from the usage of the network. And that extends all the way out to
06:06the users of applications and others. And so we're building a participation model, a governance model,
06:11an economic incentive model to build this new global operating system for the economy. And I think
06:16we've got the world's best companies there with us. And virtually every major app and killer app in the
06:22digital asset sector is here today, launching on day one.
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