What Comes After Stablecoins? (ft. Circle CEO Jeremy Allaire and Chris Dixon)

Jeremy Allaire (0:00)

When we think about an economic operating system that runs on the internet, which goes way beyond payment, every kind of financial contract, an economic contract and governance decisions, if you want that to be something that's internet scale, it has to have geo-economic and geopolitical diversity.

Robert Hackett (0:15)

How are you thinking about your moat? On the one side, you've got AI now makes it so much easier to code up software. And then on the other hand, you have legacy financial institutions coming on board with new sorts of products of their own.

Jeremy Allaire (0:27)

The most widely used interoperability protocol in the world right now on all blockchain networks is Circle's Cross Chain Transfer Protocol, CCTP. We mint and redeem $150 billion a quarter of this and that liquidity that exists on a primary basis, on a secondary basis, in on-chain markets and on-chain protocols, that's very powerful.

Robert Hackett (0:46)

Five years from now, what has changed about the global financial system as a result of the convergence of these new technologies?

Jeremy Allaire (0:54)

We're gonna go through a shift towards...

Robert Hackett (1:02)

Okay, so I'll kick things off. Why does the world need another blockchain? What is missing from the infrastructure we already have? And what's made possible by launching a new one?

I'm Robert Hackett. This is the a16z crypto show. And joining me are Jeremy Allaire, co-founder and CEO of Circle, which just brought a chain of its own to Mainnet called ARK, and Chris Dixon, founder and managing partner of a16z crypto. Thanks guys for being on. Awesome.

Chris Dixon (1:27)

Thank you for being here.

Robert Hackett (1:28)

So Jeremy, you and I, we go back to my days when I was a journalist at Fortune. I've covered Circle through many of its iterations, its journey from the Bitcoin consumer business to Circle Pay, the Venmo-like product. You had a trading business, bought an exchange. Ultimately, you guys struck gold with one of the world's most dominant stablecoins today, USDC.

And now you're following that up with ARK. Tell me, what did you learn along the way that made you say you need to build your own blockchain?

Jeremy Allaire (1:58)

So I guess maybe stepping back a couple of things, it actually goes back to like when we started Circle.

And in 2013, late 2012, 2013, when we were getting started, I think the thing that drew me to this whole space was sort of this idea of programmable money and this idea of these networks.

At the time, there's the blockchain network, et cetera, or the Bitcoin network, excuse me. But these networks actually becoming computers that you could run applications on. And the founding vision of the company was, you know what? I think that these networks are going to become like new distributed compute engines. I think that they're very purpose-built for things where you want to have like assured data and transactions and compute. That's the problem that they can solve, that hasn't been solved. But doing that in a public environment, where you have essentially a public computer, and that you could issue things on top of that. You could issue a digital dollar. We, at the time, we always used to face digital currency. We never said cryptocurrency, but you have a dollar digital currency. And the idea was, first, you could build like a protocol for dollars on the Internet, like an HTTP for money. And that protocol, in order to do that, you needed these computer networks to actually let you build protocols, stuff that Chris and I go way back in terms of the Internet protocols. You need to be able to build these higher level protocols on these computers, and then you need to be able to scale them and make them user-friendly and all this stuff.

Robert Hackett (3:35)

In a former life, you were working on video on the Internet, right?

Jeremy Allaire (3:38)

I worked on early web protocols, I worked on Web2O protocols, I worked on video protocols, communication protocols, programming languages, virtual machines, all the infrastructury stuff of the first and second generation of the Internet.

To me, this is the next logical infrastructure layer of the Internet, and at the time, our view was, well, you know what? Bitcoin has early mover advantage, it's a good open-source project, let's get involved with that open-source community and let's add the things that let this be more capable, let's add more programming language capabilities, let's add the things that let us realize our vision. Well, that didn't work out very well because it became a very closed community in the sense of tightly controlled. The open-source community, like the contributors, it was more narrow in terms of what it was trying to do, and there was a lot of ideological battles about that, et cetera, and we were on one side of that, and there were others on the other side of that, and we don't need to repeat all that history. But I think Sean and I were always thinking, should we just build one of these computer networks ourselves?