a16z's Noah Levine Maps the New Stablecoin Stack: Charters, Credit, and the AI Mullet

Going on. Thanks for joining. Thanks for having me. Super excited. Yes, sir. We have been loving following a 16 z crypto and all the all the great stuff that you guys have been putting out.

I was I sent you guys this in the in our email thread, but we essentially took the a 16 z stack, and we added, like, all of these different separate interviews that we've had in the last year or so to, like, first off, just thanks for all the content that you guys are putting out around stablecoins and excited to dive into the the latest stack, kind of framework and how you're thinking about this. But as we kick off, maybe we just start with your intro, how you found your way into the firm, and,

yeah, start there. Well, for sure. Well, I you know, I have to be honest. I have, you know, mutual admiration. I've been a huge fan of of the show for a while. I think I've been been watching it since inception. Love what you guys are doing. But, yeah, to give a quick background on myself, so I've been on the a sixteen z crypto team as an investment partner for the last three months now. My main focus area is, you know, investing in companies sort of at the intersection of fintech and crypto.

I spent the last few years at Visa where I worked on the crypto team helping with the stablecoin strategy. And so, you know, have built a bit of an insight in terms of seeing, you know, how a big company like Visa is thinking about the space and you know? But now getting more of the perspective of, you know, how are startups gonna come and and disrupt as well. What's been the transition like from Visa to a 16 z? I I'd imagine, you know, maybe a similar conversation, but very different types of of roles.

What's that been like? It's been an amazing experience so far. I think, you know, when you're thinking about the strategy again of, like, a really a really big company, I think, you know, you you look at it from different a different lens. But I also think it's helpful, you know, when you're talking to companies who maybe wanna work with Aviso or wanna work with one of these bigger companies, you know, understanding what they look for and kind of the the perspectives from there is is helpful.

And, you know, I think also getting a lot of empathy for what it's like to be a founder. You know, I think it's it's much different, again, when you're within a big company and and meeting with founders and being earlier in the process is is something that I'm actively learning more about and and trying to be helpful. There's a lot of great content. I'm sure we'll pull this article soon where you're kind of laying the you know, you're you're laying that's the lay of the land for the, you know, the stablecoin stack.

Would you say that coming from Visa to a 16 z has kind of, like, broadened your horizon, and it's like it's like peeling an onion, like, realize, oh, man. We have to keep on going, like, deeper and deeper and deeper, or did you do you feel like you had a pretty good grasp on that? Yeah. For sure.

I mean, I think the biggest transition is, you know, obviously, when you're you're working at Visa and you're thinking about it from a strategy standpoint, everything is oriented around how can you grow Visa's network and, like, what are the relevant products that we had as a company and how does that overlay on these new this new stack.

And I think being more general purpose, if you will, and and thinking about it for more of a a broader landscape, I think it's forced me to better understand how other companies and other businesses are gonna operate. So yeah. I'll pull up the I'll pull up the map here in a second. I guess something that when we've talked with other folks who who are working in venture, their investment partners, or at different VCs,

Something that, at least, I've seen is, like, when they enter a firm for the first time, they're kind of expected to bring a thesis or a sense of, like, conviction around what they believe about the world and what they're trying to bring into the firm. And I feel like your your experience at Visa provides, like, a really interesting, yeah, potential potential thesis there. I'm I'm wondering what that might have looked like because you're it sounds like just a couple months in here. What what what was that?

Yeah, when you were going through the process of joining the firm, what were some of those core thesis

conviction points you had or reasons that where was the alignment, I guess, between Noah's thesis and what a 16 z crypto is trying to do? Yeah. For sure. I think, you know, if you've been terminally on online like many of us have been over the last few years, I think the narrative around stablecoins has really been, you know, it's either going to completely disrupt how traditional financial institutions operate or it won't work at all.

And I think the the better answer is it's probably some sort of combination of the two. And, you know, I think a great example of this is for a while, I think the commentary has been, well, you know, stablecoins are gonna completely replace a Visa or a Mastercard. It's gonna be the the way in which consumer payments work.

And I think if you look at what has happened in the market over the last few years, stablecoins have really evolved as a better form of fintech, a better form of banking as a service, but cards have been the primary mechanism of which stablecoins have been used for making payments.

And so I think it's it's less of, you know, will stablecoins completely replace all of the companies that, you know, have been around for a while in financial services and rather be more of, you know, how can stablecoins make those companies better and what are the startups and and what are the companies that are coming into the space that are gonna help them make that transition.

And so I think it will be a combination of, you know, legacy, you know, incumbents integrating or acquiring or or this new technology, but also a whole new class of startups that are building net new products that, they're able to because of some of the properties of,

you know, what stablecoins provide. Yeah. So let's just dive into this new stack. Go ahead, Zach. Does it say so? Yeah. Let's kinda lay the foundation for this this new stack. I mean, was this a was this a, like, a weekend ins inspiration project that you're like, hey. I I kinda just wanna break this down. Kinda help us like, give us the lay of the land. When did this start?

And then maybe we'll kinda go through each of these sections a little bit one by one and really call out some of the these Nothing gets the people going. I was gonna say nothing gets the people going like a market map. Man, we love market maps. Well, first of all, I mean, it was definitely a a a team wide effort. You know, very grateful to get to work with a lot of amazing people who not only understand the space really well, but, you know, love putting together content.

And so, you know, I think this is something that we, as a a firm, try to have a really strong grasp on of where the market is, know, what are the the relevant categories, and then ultimately, you know, what companies are ultimately operating in there. And I think it's helpful from an investing perspective because it allows you to frame kind of, like, you know, what the space looks like. But but, yeah, it was definitely a team a very large team effort.

And so walk walk us through this because I'm going through the article right now. We started blockchains in the three categories.

I'd say it feels like institutional networks, Canton, they definitely they definitely have jumped out recently, and we've got to speak with Yuval and Eric a few times. Payment specific blockchains seem to be all the all the yeah. How how much of of that is taking up Mindspace right now for you when you're looking about this? Are you and are you even seeing you know, are we at a stage right now where we should be looking to new chains, new blockchains? Is it more, hey. Look. Tempo's here. Plasma's here. Arc's here.

Canton's here. Focus on building in those ecosystems,

and let's move on. Yeah. No. It's a great question. I mean, I think, you know, first of all, I think there's a widespread recognition that in order to get mainstream adoption for blockchains, privacy is going to be a critical part of, you know, crossing the chasm. And, you know, I think as we look back at the historical arc or trend of, you know, where blockchains have come from, you know, I think there have really been three core barriers to mainstream adoption.

You know, the first, I think, is, you know, having high performing you know, block highly performing blockchains. You know, I remember back in 2022 when NFTs were taking off, you know, buying NFT, you're paying, like, 20 or $30 of gas. I think we've largely solved that problem, through the advent of a lot of technological progress with blockchains and, you know, where block space is much less of a problem today. I think the second biggest barrier has been regulatory clarity.

And, you know, with things like the Genius Act and, you know, things like Clarity Act, you know, we're making significant progress there. And then I think the last one, which has been has taken the longest to solve, but we're starting to just see solutions there is is privacy. You know, I I remember at Visa, one of the big concerns was, you know, we had been doing stablecoin settlement where issuers, you know, issuers of were settling with us in stablecoins, and we were settling with acquirers.

And I think, you know, throughout the investor relations team, there's this widespread anxiety of someone creates a Doom dashboard over a weekend, now all of a sudden, this data is public. I think that problem magnifies and and gets much bigger when you're dealing with things like trading and, you know, you don't wanna get front front run and things like that. So I think what we're seeing is it's less that one blockchain is better than another.

I think certain use cases tend to work better on certain chains just because of the the features that they're prioritizing. And so whether it's a payment specific use cases, which we've seen with Tempo or, you know, having privacy as a core feature with Canton, I think what we're seeing is that institutions are gravitating towards certain chains based on what they're trying to do. I wanted to double click, Zach,

just given the chat we had earlier with Nick from Agora on this piece. The the charter race is an interesting way to frame this. Like, say a bit more on this. Like, what what are you seeing, Noah, from the issuers themselves and the type of race to get licensed?

What are you seeing there? Yeah. Well, I mean, I think part of it is a a byproduct of the Genius Act. You know, now with sort of the the federal charter as kind of the the core way to become a stable coin issuer, I think we're seeing a race for people trying to build out that capability.

But then I also think, you know, we've seen hints at the possibility that in the future, obtaining an OCC national trust charter could give you direct access to, you know, to to to the payment rails and get closer to the metal seems to be an important priority for a lot of them. And, you know, I think it's it's just a natural extension of as regulatory clarity increases, people want to get regulated. People want to have the capability to do more.

And generally speaking, I think getting closer to the metal gives you more capabilities than without it. Drew, any thoughts on on on this charter? I know this is something that you you've been focusing

a lot on this this conversation with Nick earlier. I think I think for me, I'm always maybe I'm just flawed, and I think of the world in this way, but I'm I'm always trying to find, like, where is the value gonna accrue? I think I naturally kind of think as an investor might about this where, yeah, you're really starting to figure out, like, okay.

As as this industry matures, as stablecoins find their wedge into all these different use cases, like, where actually are people willing and and, like, very clearly wanting to pay real money to certain parts of the stack and and where where are those business moats created and where are those economics going to flow. Yeah. I think the stablecoin issuer specific lens of, like, an AUST and Agora is really interesting. So I'm always I'm always asking that question, maybe similar to Noah, how you might be.

But, yeah, I think the issuer specific one with bundling a lot of this together is really interesting to me right now. Yeah. When you're when you're walking through this this market map, like, are there any big gaps that stand out to you right now? I mean, I even think about this from the lens of, like, a stable coin issuer. And on the hood, you know, on the surface, everybody seems like they're the same. And then under the hood, you see all these differences in the charters and the licensing.

And, you know, you may even look at, like, a bridge and an m zero and think, okay. Well, I go to them because I want a stablecoin, but the way that that's done is is very different. And people can actually issue with Bridge through m zero, and you and you start to see all these nuances that really have a large impact too, especially the application and embedded protocol layer. I mean, are like so I guess yeah. My first question is are

what are are those gaps? What do you see right now? And then maybe if we can bring it into this application embedded protocol layer, like, any anything that jumps out to you in in that realm as well. Yeah. And, you know, I wouldn't characterize it as much as a gap as much as I would say. I think there's opportunity for more development and adoption.

You know, I think the two that we mentioned in the writing, one was, you know, liquidity providers that can provide, you know, FX and and deep liquidity for stablecoins to fiat.

You know, I think what we've seen in the last few years is, especially in the stablecoin orchestration business, is that stablecoins are an amazing solution for cross border money movement because it significantly collapses the amount of time that it takes to get money from point a to point b, and it reduces your requirement to do things like prefunding.

I think the challenge in Zach Abrams from Bridge has has mentioned this a few times where what's paradoxical about, say, maybe how an exchange works versus how traditional FX works is that the bigger the transaction that you do, the worse the rates often are. And so I think for stablecoin money movement to really explode, which it's know, if you look at the data, it's grown a lot in the B2B use case.

But I think for it to really become mainstream, what we need to see is more liquidity providers that can provide really deep liquidity between stablecoins and fiat. And I think part of that is, you know, you have new players like XFX and OpenFX who are sort of connecting different banking relationships and are bringing the liquidity themselves.

But I also think it's gonna come down to, you know, will banks FX banks specifically eventually get to the point where they can support settlement in the form of you know, for for doing FX trades. And so I think once that happens, stablecoins will become increasingly price competitive for how you do cross border money movement. So I think that's that's one area. And then I think the other area we talk about is specifically bank connectivity.

We've seen a tremendous amount of adoption and development in terms of all of these various products in the infrastructure stack for how does a fintech or corporate, a nonbank integrate this technology. But, you know, as many people probably know, banks are built on legacy, you know, core ledgers that just you can't just integrate an API. It just doesn't work like that.

And so I think companies that are working to solve that gap by actually becoming that middleware will be really important for how banks, you know, adopt this technology in the future. On the bank connectivity

bucket here, we have StableCore, Omnia, Stride, Tesser.

We've we've interviewed or or covered about half of these so far. I'll pop this back up. Any thoughts specifically on any of these names or, like, unique callouts to what made you, you know, maybe specifically want to highlight them versus others on this? Yeah. For sure. I mean, you know, I think it's been a a benefit since I've connected with all of them.

However, I would say, you know, I think they've done a really good job of really engaging with banks, better understanding what their needs are, what they're interested in doing, and and understanding their pain points. You know, I think they're all doing great stuff, but I think there's still ways to go. And I think it's probably less on their end and more that, you know, banks are are just inherently gonna move slower. You know, they need more clarity from a regulatory standpoint.

And I also think, you know, a lot of these are are big changes, and so they're they're more deliberate and thoughtful in terms of how they adopt this technology. So, you know, I I think they're all playing and serving an important role in the space. I think it's just more of a question of, you know, how long will it take for them to to really gain adoption.

Is there any, like, specific category that you see as an investor or as a firm that you feel like maybe eitheror is over indexed with founders or startups or demand of people going to solve problems? Or on the opposite side, under indexed where there isn't enough, in your view, companies and founders and people trying to solve problems? Like, do you see any clear signals around, yeah, like, the bank connectivity layer, for example?

Like, maybe, for example, that could be one that you think there should be more builders in. Any any things come to mind there across these different categories? Yeah. It's a great question. I mean, I think, you know, what's been great is there's been such a robust and and vibrant ecosystem of builders in the last few years. And, you know, the this market map alone, like, a lot of these companies have really only been operational for for a few years now.

And so I think that's a testament to how exciting the space is. You know, I think in terms of, like, areas that are that are exciting, banking activities, one of them, as I mentioned, how do we build deeper liquidity between stable coins and fiat? I think maybe one area that would be exciting to see would also be, you know, how do you get banks to start getting involved in things like DeFi.

And I think that there's a lot of opportunity for, you know, how does loan origination happen, you know, how does some of the the back end things that they need to do for their core business, you know, finding ways in which they can do that in a more Onchain way. So I think that's that's an exciting opportunity. I think in general, seeing new fintechs that are building Onchain native is is really is really interesting.

We've seen a lot of this sort of stablecoin neo banks that have have come into the play and, you know, building global products on day one, attaching other product primitives like cards, you know, in in in payments and in DeFi as a way to create a more robust full financial product where you look at it and you say, oh, this is more or less what I can get with a traditional bank account, but it's offered in this new sort of platform. You know, I think that's been really exciting.

But I wouldn't say there's anything where I'm like, oh, there needs to be a bunch more builders here. I think it's more just

watching them develop and and, you know, seeing how they gain adoption over time. You mentioned credit. Zach, do you wanna dive into this one? Yeah. Credit's a big one. That's been a hot topic. Hot hot topic recently. You know, we had Chris on from from CreditCoop. Anna was just talking about, you know, warehouse financing, talk about the figure, the prime product with with Helox. I think credit is a largely misunderstood word word, at least in the consumer world.

How do you look at credit, and how do you like, what specifically

like, where's its place in this vision of finance coming on chain? Yeah. I think there's two ways to look at it or or sort of two two sides of the network where this is interesting. I think on the one hand, if you buy my argument that stablecoins are serving as this new banking as a service, and we're gonna see several financial products that look and feel like a traditional financial account but are denominated in stablecoins.

That's going to be an entire new set of supply of people who have dollars that are now looking for productive ways to utilize it. And so I think that creates more efficient global capital formation. Then I think on the the borrowing side, there are several markets, specifically in emerge you know, emerging markets where getting access to credit is challenging. There's credit deficits in the market. You know, it's hard to originate a cross border loan, for example.

And I think what DeFi is doing and smart, you know, smart contracts are doing is it's making it such that you can originate loans on chain in a much more efficient way. And when those loans get repaid, you can do things like how do you have receivable back financing where when a repayment happens, it programmatically repays a lender. And I think that becomes really important when you think of how do you enable blending to be done in a way that's less regional specific and more global specific.

And I think that's what this sort of technology could enable. While we're on the go ahead, Zach. No. Go ahead. I was gonna shift to the headless merchant thesis

because I'm looking at your Twitter or your ex and seeing this now. But, Zach, go ahead if we wanna close the credit the credit loop. Now my ears are turning with headless merchants. I mean, we can go down that route. I guess, like, you know, I I'm looking at this, like, sea of of applications

and embedded protocols and credit. And I think similar to Drew's earlier question where it's like, okay. Who's gonna eventually, like, own that? Like, is it gonna be the stablecoin neo banks? Is it gonna be the crypto trade to earns? Like, where is that value gonna accrue and where are people gonna kinda go for credit? I even think about what we're asking with Perenna where, you know, are you d to c or is this a b to b to c play?

And I guess even larger, I I start to think about, you know, in the context of where do all these how do all these pieces start to come together? You know, we're we're getting this clearer vision of what this world of on chain finance goes. But I think, you know, when the Bitcoin white paper was written, this wasn't the exact vision, I think, anybody really had for the state of finance. So I I start to wonder and I don't know if you have an opinion on this of where what's this gonna look like in five years?

What's it gonna look like in ten years? You know, we see people popping up talking about, like, net new primitives. What do our financial applications look like, you know, ten years down the line with all this new infrastructure, these new protocols, all sort of blending together into to one, if not, you know, a select few apps?

Yeah. And maybe that's a segue into the into the headless merchant a bit. Yeah. Well, I I guess to to answer your question, you know, unfortunately, I'm not clairvoyant. If I was, you know, my job would be would be a lot easier. But, you know, I think in general, like, our belief is that, you know, blockchains largely represent a new coordination system, and we think protocols are are a critical way in in which that coordination happens.

And so, you know, I think that what we see is, obviously, value will accrue to several parts of the stack. But we think that areas where real network effects can occur on both sides is is where a lot of the value will will occur. And so Mhmm.

You know, we've been really excited about companies like Morpho and, you know, in the space who who have, you know, built what we believe to be really interesting opportunities in terms of how you build a network effect business that leverages sort of global rails and and new construct for how you coordinate between different parties with with trust as a key key area. So bring us into this a little bit.

So this was a article that you actually put out, not super recently, but it's it's something that got a ton of traction.

And I think it it's a theme for us that we've been that we've been tracking in recent months around the role of agents and how agents will consume specific pieces of information and how commerce will be conducted in that type of paradigm. Bring us into what where where the thesis of this article is and and just the role that you think agents play in consuming some of the stack. Like, we have we have the market map that we're talking about.

The paradigm that most people think of when they think of buying services or products from that stack? I think naturally people assume that that will be human driven. How do you how do you see agents actually purchasing things and engaging with this stack

that we've talked about today? Yeah. It's a great question. So, I mean, I guess just taking a taking a step back, I think that, you know, when people talk about agent to commerce, which is obviously one of the hottest topics right now, I think oftentimes people think of, oh, you know, I'm going to chat GBT. I wanna buy a pair of sneakers and, like, you know, that's my payment's gonna be done there.

And while I do think that, you know, we are going to see a significant platform shift in how commerce happens for traditional consumer to business or consumer to merchant types of payments, I think the bigger opportunity is this massive transition we're seeing in developer services.

And so, specifically, you know, I think what tools like ClawCode and Codex with from OpenAI is doing is it's drastically democratizing who can be a developer to the point where, historically, it's been you know, the biggest bottleneck to building something has been whether you know how to code or whether you're software engineer. And now literally anybody with a computer and, you know, $20 a month and to buy a subscription can go and build, you know, amazing things in a weekend.

And I think as a result, if you imagine that basically everyone is now becoming a developer, well, then that's gonna drastically increase the demand for developer services and developer tools. Unlike developers today, most people who are VOD coding don't have an opinion. They're not very opinionated about, you know, what they're gonna buy and and what they you know, one one service versus another. And so targeting them through a traditional enterprise sales cycle doesn't make a lot of sense.

They don't wanna get on the phone, you know, with a sales team. They don't wanna go through a billing department. You know, they just wanna get a a task accomplished. And so I think what's gonna happen is the buyer of these services are gonna shift from humans to more agents. And so, therefore, those agents need a a seamless way to identify these merchants and then pay for them.

And so I think what will happen is you're gonna have this whole new class of headless merchants that rather than targeting humans with a pretty, you know, storefront interface and a whole team of people to sell to them, it's going to be things like really good documentation, seamless you know, really good and efficient APIs, it's likely gonna be done on a per transaction basis mostly because of the fact that most of the things people are building tend to be more ephemeral where maybe you need you don't need a subscription if you're only using this one or two times.

You just need something to work. And so I think it's gonna open up this whole new opportunity, this whole new gate of of merchants. And, you know, we've seen new protocols get established like x four zero two and MPP, and I think that will ultimately be, you know, one of the primary rails in which these headless merchants are accessed.

I mean, I'd say I'm not even a headless merchant, but when we when we come across teams that have these docs where you can, you know, easily copy a page to you know, with as a markdown file or Yeah. Even just, like, connect as a as a quick MCP.

I mean, the time to just even just research and to prep some of these docs. I think I did a few for Drew when he was getting prepared for StapleMinded, and it's like even that alone is such a game changer. But, also, it's just I think about three, four years ago, again, things that we're not even thinking of that now we need because AI has been so it just transformed the way we run even run our business.

When we think about, you know, the the rise of headless merchants, don't I know if have you seen it in San Francisco? This is where my head goes. Have you seen the store that's ran completely by AI? No. I haven't. No? Oh, man. What kind a store is it? It's a storefront. They said, hey. I forget what the team was. They said, We're gonna use our model. You have to go out. Like, you have permissions to go open your storefront. You can choose which products you're you're gonna bring into the store.

And so it was going out and placing, you know, orders at all these merchants. And, of course, there's humans into in the loop to approve certain things, but it it even conducted interviews and was screening applicants. It was yeah. And they're like, hey. This isn't it was this distinction of we don't want the world to go this route even though it may be going down that route, and we want to showcase what this technology does.

And so I think that if we are in this world where AI are these hedge headless merchants, what what do they need? And, obviously, where does where does the Stablecoin stack fit into what they need and how they may be running businesses? And, obviously, x four zero two and MPP are are huge parts parts of that. And then I even think of, you know, from an entrepreneurial perspective, like, what businesses should people be going out and starting for these headless merchants?

Yeah. I mean, I think for the for the Stablecoin point, you know, and I wrote another article that kind of talked about, you know, there's been a lot of talk conversation of Stablecoins versus cards and, like, where do Stablecoins play a role?

And I think, you know, my core argument has been the the biggest challenge that I think is gonna happen is when you have a merchant that literally has been spun up in a weekend, you know, it's a team of two people, and they wanted to go and sell services, getting card acceptance can be pretty challenging.

And the reason why is because at the end of the day, what an acquirer is doing when they underwrite a a new merchant is they're effectively saying, you know, if this merchant doesn't provide their service, like, we need you know, they need to be on the hook for it. And so it's really hard to underwrite a merchant that is ephemeral and has just gotten, you know, created. And, you know, I think what stablecoins represent in this world is a form of digital cash.

We're very similar to, you know, the street vendor who's selling hot dogs on the corner, maybe doesn't have card acceptance because, you know, they're small and it's hard for them to get underwritten, and they, you know, go to things like cash or or or more cash like equivalents, I think stable points ultimately end up being a similar solution where you can just set up your your storefront and get paid instantly.

I do think over time cards will be adopted into this ecosystem and will be one of the primary payment methods. But even in that world, I think there's this this whole rabbit hole of, you know, kind of like the what does the AI mullet look like where you could have something like cards on the front where people put a card, you know, card on file and they're see they're a command line interface, but then ultimately, the merchants get settled in Stablecoins instantly.

And, you know, I think things like chargebacks and fraud are less of a problem in this type of commerce experience because if I'm making a 3 or 4¢ payment and they don't provide me the service, then I I'm willing to live with with losing that. Whereas, you know, if you're I'm buying something for a couple $100 or a thousand bucks, you know, obviously, I really care about getting what I'm paying for.

So, you know, I do think stablecoins will serve similar to what we're seeing in in cross border money movement and just payments in general as just a better store value and a better form of settlement. And so I think in the early innings, stablecoins will be the primary method of which how these services are in are paid for. And then over time, I think cards will find a way to to to to play because it will, you know, it'll benefit from the fact that Yep. Most people have cards.

AI That's

a new one. Last question for me, because I know we're we're running a little bit over here, but just you've mentioned MPP a couple times. And when you said the idea of, like, developers and and vibe coders and people who are building with agents, they may not care about some of these things. They may not care what card API they use or what stablecoin they use or they really just want the utility of these things to work.

And when we were talking about machine payments protocol, MPP, with Tempo and all that stuff, I started to think about the strategy there a little bit of, like, what they've done and how they've approached acquisition and being in house with Stripe and just the relationship there in that idea of, like, there almost will be kind of default options, I'd imagine, for some of this.

Is that how you see that playing out for Tempo or or specifically, like, that ecosystem or other ecosystems where they will have kind of default cards or default wallets or default other things that are maybe preferential or owned by

the strategic parties at those types of companies. I think Stripe is kind of leading the way in that model. Is that what you're seeing happen, or am I off with with that? Yeah. I mean, I I think it's still kind of to be determined. You know, I gotta also say, I think the, you know, the whole x four zero two team has done an amazing job.

You know, Eric and Kevin are are amazing, and I think they're really pioneering the space both in terms of sort of sharing the vision and and also getting a whole new class of traditional merchants to come and go into this new universe. But, yeah, I think it's it's like the space is very early, and so there's still a lot of open questions of how is this gonna play out. But I do think there's sort of a a race to, you know, who can be the default wallet, for example, for developers.

I think when you're the default wallet, you get the advantages in that. You can own more of the discovery layer. You can help sort of orchestrate traffic in a way that's beneficial to you. I think pricing is also somewhat inelastic in this world because, again, if you're charging in micro transactions, it's hard for, I think, for the average human to say, is this overpriced or underpriced, you know, when it's on an API call basis?

You know, if you go to a restaurant and you buy, you know, a plate of pasta, like, and it's very expensive, you you have a sense of that's being expensive. I think it's harder to to look at something that's, you know, accessing a very niche data service. You know, is 4¢ a lot? Is 3¢ a lot? You know, it's hard to tell. So I think if you were know, you whoever's closest to the merchant, whoever's closest to the developer is gonna have a little more control than other parts of the stack.

But, again, I've been very impressed with with both, you know, the tempo, the team, and, you know, the people working on MPP. And I think the expert t two team has been great as well, and, you know, we'll see what what happens. Alright. I got I got one last question. Drew, maybe this is a question we need to to start asking people. It's a little bit more on the personal side. I

find it you know, I'm in The US. I find it really hard to pull these habits, especially, like, for my wife, for example, to get her to use apps that may be more inherently stablecoin native. And you could bring up all the other conversations around, you know, what happens if I die, seed phrases, skis, all of that. But but maybe on a more personal note, like, how are stablecoins integrated into your finances? Are there any apps that, like, you just straight up you know, take a 16 z out of the picture.

You're just like, I enjoy using them. This is a good financial application. Yeah. I mean, just where are you at personally?

Yeah. So, I mean, I think, you know, where we see a lot of product market fit for stablecoins is frankly not in The United States. You know, if you Yeah. If you really fundamentally bring down, you know, where are stablecoins most useful, it's really two areas. One is crypto capital markets. You know, how do I engage with DeFi? How do I engage with buying in crypto? And then I think the other major one is dollar access. And a lot of the stack that we showed, I would say, is more the latter than the former.

So for me personally, you know, I I engage with stablecoins whether it's, you know, in you know, working going to buy crypto assets within something like Coinbase. I use, like, their more you know, the Morpho integrations so that I can, you know, borrow against Bitcoin so that I can, you know, get yield. But, you know, I I would say I'm certainly not the the core user for where I think stablecoins are going.

But I think for me, on the crypto capital market side, you know, the ability to buy a differentiated asset class, the ability to engage with things like trading, swapping, more of the d the degen side, I would say, is probably where where I engage more. But, you know, I've certainly am not, you know, the type of user where I think stablecoins are gonna have the the biggest set of adoption. Morpho the Morpho Coinbase integration is a good call out. Also,

Bitcoin backed loan there. Beautiful user experience. A lot of these vaults too. There's they're they're they're attractive, you know, yield sources. And even if, you know, I've I've had my areas where I like meme coin trading and I like going down this rabbit hole to the new protocols, and I've kinda scaled back and landed in professional degen.

Like, is that a term where it's like, you know, there it's these defined native protocols, but you don't feel like you're necessarily in, like, the riskiest thing that's gonna disappear overnight. But it's definitely not, you know, it's not surface level. You definitely have to. I think project zero probably fits kind of into that realm or maybe things like Upshift and

where they're trying to swim upstream, but they're still in this DeFi DeFi bubble for sure. Well, I get a lot of credit. You know, it's funny. So I was at Visa probably a year into my role at Visa. And and, you know, I don't know. I think you guys have have met with Kai Sheffield who's head of crypto at Visa, was my manager, great mentor, great person.

But, you know, he had this very big principle on the team, and I think it's part of why Visa has been so successful in crypto, is that basically every single person on the team needs to be crypto native. They need to use the products. They need to try these things. Like, there's no you can't come up with a crypto strategy if you're not actually using the products. And so, you know, I I was literally a year in, and I'd never, like, really engaged with any of this.

And so I spent you know, I think it was, like, a winter break, and I spent the entire time trying these different things and playing with it. And, like, it was very eye opening to, like, once you use it, you have a much better sense of how this stuff works. And so, you know, I do like, I will say, I think it's very important for people that are building in the space to actually be playing around with products even if it's not directly relevant to you.

And so, you know, it's become ingrained in me through through that experience that that's something important to do. What were what were some of those moments early on? Yeah. Like, I was turning to a call where you're like, okay. I kinda see this. So yeah. That's a great question. So I think the biggest moment for me ever in this space was I had I had stablecoins or I had some crypto asset in a a Phantom wallet, and I exported the keys and put it into a Solflare wallet. And, like, my balance just showed up.

And I had this crazy moment where I'm like, oh, that's how, you know, how private keys work and that you can export it and put it in. And I'm like, you know, obviously, you can't do you can't take your keys from a Wells Fargo account and put it in the Bank of America. And, you know, I think it's been great. It opened up my eyes in terms of, like, how modular and and, you know, composable these things are.

And so, you know, that to me like, I I was like, I now understand how self custodial wallets work and, you know, why this is interesting. And so, you know, I think that was, like, a really big moment for me. Phantom, I think, earlier like, early on was, like, one of the best user experiences for doing that sort of thing. Like, the mobility of keys was, like, a really great, I think done that as well with that that app before. I remember having that that same that same experience.

Yeah. It's hard because it's, like, in in one hand, like, you know, there's this narrative that's kinda being painted of, oh, man. But users don't wanna manage their private keys, and it's bad if they have to do that. And, you know, what if they can't recover them? And all of that may be true. Well, it's also true that this is a certain a type of freedom, and like you said, modularity that there's also a large subset of people that I like the the to be able to just say, hey.

I don't really like this interface right now, but I don't wanna just create a new wallet and have to trade these and, you know, all the tax and tracking consequences. I mean, I'm going through that with my tax people right now. They're like, what's what wallet is this? And I was like, that was a year ago. I don't even know. I've moved on. So I can just say, hey. Same wallet, same same keys, just different interface now.

And then when you kind of start to break that down into how does that affect when you have funds in a certain vault or in a certain lending protocol, just makes life easier to a degree.

So cool. Everyone's on a different journey, but thanks for welcoming us into yours and the just the awesome content that you personally and the firm just keep keep putting out there. So would love to have you back on and excited to keep following you on on x, and there's so much to learn here. Appreciate the vantage point of being able to kind of see the places where everyone fits and, yeah, appreciate your time. Are you gonna be in Miami next week by chance? Yes. Yes. I'll be there.

Myself and then several other people on the team will be there. So, obviously, if anyone listening is is building in the space or or wants to chat, we'd love to engage with them. Cool. I will be there. Maybe we can link up. Thanks for the time, man. This was fun.