Stripe’s Trillion-Dollar Bet: How Stablecoins Eat Global Payments | Founder of Bridge Zach Abrams

Zach:
[0:00] You send a stablecoin over a blockchain and, you know, you could see when it was sent. You could see when it was confirmed. You could see when it was delivered. You could see that it stopped. Just very basic things that, you know, in addition to costs and, you know, things that are more complicated that made us believe that this was a better, that money would be tokenized. At some point in time, people, businesses, fintechs, banks would see the value in using this emergent payment rail. And we were building for that future.

Ryan:
[0:40] Welcome to Bankless, where we explore the frontier of internet money and internet finance. This is Ryan Sean Adams. It's just me today, David Zell. So I'm here to help you become more bankless. Every company in fintech is about to go through what I'm calling a crypto transformation. Stripe is one of those companies. It's a $90 billion private payments company behemoth, a company that does 1.3 of global GDP's worth of payments volume every single year. They're definitely at the frontier of this crypto transformation. They're moving quite quickly. They've invested big in stablecoins, and I think after the Genius Bill has just been signed, they are doubling down in a big way.

Ryan:
[1:23] Zach Abrams is leading part of that transformation at Stripe. Stripe just bought his stablecoin company, a company called Bridge, for over $1 billion about a year ago. And they've made more crypto acquisitions since companies like Privy have been among them. This conversation with Zach is a glimpse into how big fintech companies think about this transformation, how they're going to evolve in the future. And it's a different perspective than the crypto native one that we typically have on bankless. That's why it's so valuable for us to hear. It's also the story of Zach, who's this tenacious entrepreneur who had this thesis around stable coins and persevered with that thesis, built this company through some very dark times leading to this major acquisition.

Ryan:
[2:09] Now, shortly after recording this episode, Stripe launched some details on a layer one that they are sponsoring. People are calling this the Stripe layer one. Our guest says it's more of a consortium. It's called Tempo. It's an EVM chain. It's being launched with the consortium of fintech players. We discussed that too and why they didn't go with a layer one or a layer two. Big questions. What's Stripe doing next in crypto? What's every fintech about to do? Zach Abrams helps answer those questions today. So let's get right to the episode. But before we do, I want to thank the sponsors. Bankless Nation, very excited to introduce you to Zach Abrams. First, Zach, it's great to have you on Bankless. And I got to say this at the outset. Congrats on selling your company, the company you co-founded, Bridge to Stripe. You did that in October of last year. At least that's when it was announced. This was reportedly, I don't know if you can confirm this rumor, over a billion dollar acquisition. Stripe's largest yet. So this was like a crypto unicorn and it's a big deal. Congrats on that.

Zach:
[3:13] Yeah, really, really appreciate it. And a lot has changed since then. That feels like a hundred years ago.

Ryan:
[3:20] Yeah, I don't know. Like, it's kind of funny to me that Stripe bought a company pre-Genius Bill. You know what I mean? Like bought a stablecoin company pre-Genius Bill. What kind of foresight was that?

Zach:
[3:29] I mean, you know, it was it was pre the election when a bunch of stuff started to started to shift right after pre pre genius pre a bunch of a bunch of things. But but, you know, I think like the main the main thing probably for them and and and for us was that like, you could start to see that it was working. Yeah and it had changed like pretty quickly like you know two years ago or three years ago it was not working terribly well it's

Ryan:
[4:04] Like stable coins or crypto in general.

Zach:
[4:06] Yeah yeah like the the business stable coins generally yeah i mean there was like terraluna and ftx and oh yeah um forgot about that yeah that's like in the in the long distant past now but but it was like starting to work. Like there were like real payments companies and fintechs that were building on us. And you could squint and kind of see into the future that this was going to be very meaningful.

Ryan:
[4:32] Yeah, that's very cool. I guess that's what the that's the genius of the Collison brothers. They tend to be able to squint and see into the future. And they saw this one coming. I want to talk about them in a minute.

Ryan:
[4:41] But first, your own story. OK, give us your, I guess, crypto founder arc, if you will. And you could begin this wherever you want. I'll leave that open-ended to you. Where does the story begin for you and how did you get on the other side? Now you're working at Stripe post a maybe a billion dollar acquisition.

Zach:
[4:58] Well, I guess for me, it kind of started where most crypto founders start with auto parts. Wait, what? So coming out of college, I wanted to be an operating partner at a private equity firm, which is a very bizarro thing to want to be. Okay. And I went into private because like I thought it would be fun to like turn around and like run these companies. Yeah. And I joined this private equity firm that was buying distressed businesses in 2009. The auto industry was in complete turmoil. We bought an auto parts company. I was sent in as a 22-year-old to be the CFO of this auto parts company. Oh, my God.

Ryan:
[5:44] How did you get that gig as a 22-year-old?

Zach:
[5:48] Yeah. Yeah, I mean, it was very bleak, though, because I was like, you know, you could imagine a 22-year-old, like, you know, dweeby kid. I was like going to Canada and like announcing to all of this company's, you know, factory folks that we were closing factories in Canada and then going to Mexico and cutting ribbons. And I was like, this is not what I want to do. I want to like build stuff. And this is the exact opposite. It and so I left private equity and I had heard that people on the west coast were like starting companies but I went to Duke at the time there were there were like legitimately when I graduated maybe seven or eight computer science graduates I do in all of Duke what

Ryan:
[6:36] Was everyone doing over there.

Zach:
[6:37] Everyone was doing econ everyone was going into like going into going into investment banking and so on. And so I didn't really know people that were starting companies. And so I decided I was like, I'm just going to start a company. Like, I think that I can do it. And the first company we I wanted to start was actually like a buy now pay later, like, like Klarna or a firm but in 2010 and it's like the hardest business imaginable to build because you have like large partnerships and you have like credit you know and fraud and risk and you know all this all this stuff and i went to go raise money and i went to start this company i thought the way that you did it is like you put together a presentation you went to a vc they gave you money and then you hired an engineering team to build the thing. And so I was like sorely disappointed when I went into all these VC's offices and then they were like, show me the product.

Ryan:
[7:44] Like you're not an engineer by training then? You didn't study comp sci at Duke? No, no, no.

Zach:
[7:49] I didn't study in it and I didn't know anything. I didn't even know what an engineer did. I didn't know what a designer did. I didn't know what a product manager did. I was like the least equipped person to start a company imaginable. And then I went on this like, horrific one year journey to start this company where I like, you know, realized I needed to teach myself to code. So I went to like coding schools in New York. And then I realized I needed a co founder and it was like co founder dating, you know, it was like you go to a bar and it was like, you know, a hundred people like me and one engineer.

Ryan:
[8:26] One very, very popular engineer.

Zach:
[8:30] Exactly. Exactly. And eventually I met Sean, who's now my co-founder for, for, for Bridge, but Sean also had gone to Duke and, and I met Sean and this was maybe like nine months into that journey. And I convinced him to start this company with me. And then we were able to like raise money and build some momentum. And, you know, then I moved to the West Coast and that company didn't end up working out. We sold it to Square. But that's how I kind of like ended up on this path, you know, which started in a wildly different place.

Ryan:
[9:07] So that set you on the fintech path though. So I guess the Square acquisition, maybe that wasn't like a banger, but at least it was sort of an exit out of the startup pain that you were in. But you've since, in addition to Square, you had some tenure at Brex as well and also Coinbase. So it's like fintech plus crypto is on the CV.

Zach:
[9:27] Yeah, totally. I mean, I did not. So each time it came to like find a new company, I found myself, you know, only in hindsight did I realize that I'm just like really interested in fintech. It was just, you know, I was given a menu of options and theory of like companies that I could go to. And every single time I happened to pick the same type of item on the menu, which was the FinTech company. And in 2016, I think is when I applied to Coinbase, I had this like

Ryan:
[10:00] Real excitement around crypto.

Zach:
[10:04] When I had first moved to San Francisco to start Evenly, that was our first company, that's when Bitcoin ran out to like $1,000 and then kind of crashed. That was maybe like 2012 or 2013 or something. And so that's when both Sean and I had like, I think it was true for Sean too, but we had bought our first Bitcoin and went to like meetups and, you know, people had like, you know, we're building all, you know, all this Bitcoin mining stuff. And there was like all these hardware companies and so on. Anyways, that had like kind of created an interest for me. And then in 2016, I had this, you know, I was, this is post-Square,

Zach:
[10:50] This like just general excitement that I thought that like this was going to be, I don't know what triggered it in me, but I thought this was going to be really meaningful. And at the time I joined Coinbase and it was, you know, maybe 70 people or 60 people. But Coinbase is like a weird company. It's not like a company that exists today where, you know, people have like 70 employees after like three months. Coinbase had like been around for like five years or something. Like I was like employee number like 200 or something. But at the time, there were only 70 people there because it's just Coinbase had been through so many different, you know, pivots and iterations and so on. And at the time when I joined, Coinbase had, this is kind of like an intersection with Stripe. Coinbase had just realized that paying and buying stuff with Bitcoin on the internet was like not going to be the next thing. And like the big marquee customers at the time were Stripe was using it. And overstock.com was using.

Ryan:
[11:50] Stripe was using Coinbase back then?

Zach:
[11:53] Yeah, was using Coinbase back then for the buy with Bitcoin functionality.

Ryan:
[11:59] Okay, okay.

Zach:
[12:00] And right around the time that I joined was when we at Coinbase realized, oh, maybe that's not the thing. Maybe this exchange, buying and selling on the exchange has real legs and going to be a big business. And then 2017 happened And it was like the wildest ride one could imagine as Coinbase went from this like very niche company to a major American, you know, financial services company almost overnight. And then through that journey, one of the last things I worked on at Coinbase was USDC. And the launch of USDC for the, a lot of other people worked on the actual implementation of USDC, but I was running the Coinbase consumer business. And our goal was to take USDC and figure out how to use it and make it useful. And that's when as we started like figuring out how we would productize it, came to this view that it could be this like first, you know, global store of value. And there was a bunch of things around like turning Coinbase Consumer into a neobank that we wanted to do. But I never actually implemented that and then left and then went to Brex.

Ryan:
[13:07] You went to Brex. So you went back to the fintech side of things before then starting Bridge.

Zach:
[13:13] Yeah, yeah, exactly. And it helped to have like two years away to kind of reflect on it and see a lot of the problems that Brex faced because Brex was like trying to expand internationally. And it was like very clear as I had worked on a bunch of these different products, how, you know, a lot of the domestic problems, especially in some of the more the more developed markets had been solved. But a lot of the international problems had not been at all.

Ryan:
[13:39] What's so fascinating about your, I guess, resume and your experience here, Zach, and eventually like founding Bridge is you're one of the few people who are, I guess, a bridge between fintech and crypto, which is somewhat interesting. So my experience is I found many of the fintech people skeptical about crypto and many of the crypto people just don't get fintech and don't even think it's irrelevant. And so the two kind of camps have been growing independently for a while. It was crypto over here and then fintech was doing its own thing over here. I think that has changed this cycle, maybe starting in 23, but now it's definitely crescendo in 2025, where we're starting to see a convergence between fintech and crypto. In general, all of finance and cryptocurrency, are they different? Are they one and the same? I think that's going to be a major theme of this episode, that convergence. It's certainly a theme of this cycle. How did you, I guess, bridge that gap? What did you see that made you still not skeptical enough about crypto? You're in fintech, but you're still open to crypto, right? And then also, in fintech but not kind of like you bounce back and forth and you saw both of these worlds. What did you see that the other fintech people didn't?

Zach:
[15:02] I mean, first I just Completely agree with the premise of the question. I think that one of the unique advantages that we had when we started Bridge is that we sat in the middle. We had a deep understanding of the financial landscape and an appreciation for what crypto made possible. And there were just there's like so few i mean now there are more but at the time there was i i felt like and maybe this is true but we were one of the only teams that that sort of sat at this at this intersection you either were sort of like a religiously believed in crypto and felt that like the existing financial ecosystem was was like completely dysfunctional and and would be replaced or you lived in the existing financial system and thought that crypto was like purely speculative and like, you know, crazy town.

Ryan:
[15:59] Scams and drug deals and crazy JPEGs and just like all speculation, nothing there, right?

Zach:
[16:04] Yeah, yeah, exactly. And, you know, the overlap of these two circles was incredibly, incredibly small, which created our opportunity. It made it really hard at the beginning because of where we sat, we had to go and work with banks. We were trying to sell to non-crypto companies. And so it was... Really challenging at the beginning. I mean, because there was nobody else who

Zach:
[16:37] was at this intersection. Even today, it's definitely a little bit harder, but it's getting much, much easier.

Ryan:
[16:45] Like you founded Bridge in 2022, right? And that was a dark year for crypto. And so is 2023, right? I mean, that was just all of the momentum that we had. And I would say public goodwill that crypto had as an industry came crashing down with Sandbank been freed and FTX, the corresponding sell-off and all of the political goodwill to make something like stable coins happen in the US. That completely evaporated. And of course, Bankless listeners know we got years of Operation Chokepoint and lots of bad things on the back of that. And here you were trying to found a bridge between traditional finance, basically fintech in crypto during this very dark period of time.

Ryan:
[17:31] I mean, what was that like?

Zach:
[17:33] It was just as bad as you're describing and probably even worse because, you know, Terra Luna also happened, which, you know, Terra Luna kind of made stable coins, you know, tainted the entirety of the stable coin space. You know, you also had a bunch of banks that were like crypto-friendly banks that ended up like going bankrupt. So of the folks who were in that Venn diagram, a lot of the folks got punished for being in the middle of those two. So you had like Signature and Silvergate went out of business. You even had BankProv.

Ryan:
[18:09] That was like 2023, right?

Zach:
[18:11] Yeah, that was early 2023. And like you had BankProv, which most people don't talk about, but BankProv was another one of the crypto-friendly banks. They did a bunch of loans to Bitcoin miners. and those loans went like massively underwater and the CEO got fired. I mean, it was like... Almost everybody who sat in this like intersection was punished in some capacity. The thing for us is, I think when people start companies, there is like, like right now, everybody wants to start an AI company because it's like, you know, the in vogue thing to do. And it's easy to start something when everyone else externally is giving you validation that your thing is like an it thing to do but at the end of the day making a company successful is almost always like driven by a like founder or the early teams like just core belief that this thing needs to be willed into existence. And so the nice thing about founding the company when we did is that like that, that, that, you know, desire to will this thing into existence was tested extremely early. And, and we just had a like very core belief that stable coins were like,

Zach:
[19:41] That represented a better means of building financial products. And not for some, you know, ideological reason, but because they literally made it like faster and cheaper and more accessible and so on. And a better way of moving money for the same reasons. It was tangibly cheaper and faster and a better mechanism to send funds. Like a great example that people, you know, I don't think a lot of people think about is like, if you send money through the existing, you know, through ACH or wire, you have no confirmation that your money was ever delivered. Like, you just have no idea. You just send it and you just hope that it arrives.

Ryan:
[20:23] Zach, have you ever lost a wire that way?

Zach:
[20:26] Yeah. I have.

Ryan:
[20:27] I have. And so this was actually relatively recently. I sent a wire from one place to another. It's where, yeah, I do some TradFi. I do have a bank. I'm not completely bankless, everybody. So, you know, full disclosure there. Breaking news.

Zach:
[20:40] Breaking news.

Ryan:
[20:41] Yeah, breaking. Speaking of breaking, the wire didn't end up, you know, you have to wait. And so I waited like 24 hours, 48 hours. The wire did not end up where I had thought that I sent it. And I freaked out. And then I went through this process of trying to figure out, did the wire actually settle? Where is it? Where's the ID on Fedwire? And I must have talked to five or six people. This was between a brokerage account I have and somewhere else. And they gave it to a wire tracing team. They said the process would be like 48 hours to 72 hours of turnaround time. I said, how often do these cases get resolved? They say, most of the time, but no promises. I was like, you can't even track the wire? Like, this is crazy.

Zach:
[21:29] Yeah. I mean, it's nuts. And like, you know, you send a stable coin over a blockchain and, you know, you could see when it was sent. You could see when it was confirmed. You could see when it was delivered. You could see that it stopped. And it's like just very basic things that, you know, in addition to costs and, you know, things that are more complicated that made us believe that this was a better, that money would be tokenized. And at some point in time, you know, people would see the, you know, people, businesses, fintechs, banks would see the value and using this emergent payment rail. And we were building for that future. We just had this very core belief. And like I had just seen it. This is one of the things that probably helped the most of having this like history in fintech. Like I just seen this over and over again that like fintech products that were successful were successful for super obvious reasons. Like this isn't like a consumer company or something of like, why isn't, why did Instagram beat whoever? Why did Facebook beat, you know, this thing, you know, it's like, why did Robin Hood win? They had free trading. Like, you know, when everyone else costs $5, it's like, you don't need to be a genius to figure it out. Why did Square win?

Zach:
[22:52] Well, because it costs like thousands of dollars a year and 5% for a small business to process credit card transactions before. They made it, you could sign up instantly and they made it really cheap. Same thing for Stripe and so on. And with financial products, eventually over some arc of time, people are rational. So there was this perceived stigma and perceived risk of building and using stable coins, but there were all these very tangible benefits. Of building and using stablecoins. And we were sort of building towards the future where those perceived risks would come down and people would realize the tangible, be able to realize the tangible benefits. And for us, it started with those who were, you know, the most,

Zach:
[23:36] the farthest on the risk curve, you know, like startups and so on. And then now as we've had like regulatory clarity and so on, you know, folks who are not as far down the risk curve, you know, and increasingly large enterprises and governments are now using stablecoins, which is really cool to see.

Ryan:
[23:54] But it all

Zach:
[23:55] Emanated from that core belief that this like made financial sense for people to build with.

Ryan:
[24:01] Yeah, that core belief. That was the unshakable thesis, I guess, back in 2022 when it was not obvious, when it was not popular. Terra Luna collapsed. Stable coins are dead. This will never work in crypto. Then you also had things like Tether, which is like, what is that? It's just like AML, KYC. Like, what's going on there? Is that, you know, shady sort of cryptocurrency? What's going on? So that's the unshakable. Like, you're the closest thing, I would say, Zach, to like a stable coin maxi. That I've seen. We have all sorts of different religions in crypto, as you know, and you might be the same because I've heard you say things that even you, you've been skeptical of some of the value proposition of crypto until stable coins. You said that stable coins are the next evolution of money. I think this is also one of your quotes. I'm building in crypto because I love financial services and I believe this new platform can be used to create better products. I'm not trying to free the world from centralization or build a libertarian utopia.

Ryan:
[24:52] Some crypto-native bankless listeners might say, oh, okay, come on,

Ryan:
[24:56] Zach. That's what we're trying to do in crypto. But you're pretty straightforward in the fact that you think the big value proposition, the thing that you really want to build in crypto, is this better fintech system based around stablecoins. So for people who aren't aware, when they think stablecoins in crypto, they think maybe Circle, they think maybe Tether, some of the issuers. But you built something else, although I believe Bridge does have a stablecoin itself, but Bridge is kind of a stablecoins payment platform. So what did you build over there from 2022 up until you were acquired and like what mission are you continuing with Bridge?

Zach:
[25:37] One of the other benefits of having worked at a bunch of these a bunch of these companies like work at square or work at brex or work at and now you know work at stripe is like i've just seen how i've always had this interest in financial money is like incredibly important in people's lives obviously and even even very marginal improvements to the way that people are able to accept or manage or facilitate the movement of money, I've very tangibly seen the disproportionate impact that that has on people's lives. Like take Square, for instance, you know, you created a dongle. So it made it like easier for someone to accept a credit card payment. And, you know, at the time, a lot of people walked around and carried cash and what have you. But Square is like, You know, enable success of, you know, millions of merchants, enable them to sell more goods, enable their business to go from unprofitable to profitable, you know, enable them to capture that incremental sale. And it's like totally changed the livelihoods of many, many people.

Ryan:
[26:50] You know, stable coins are like that,

Zach:
[26:52] But the scale is so much bigger. You know, like a stable coin can be used and stored by people all around the world. Now with the stable coin, people in every country have real economic choice that they didn't have before. Now, with a stablecoin, you can move money between countries at a fraction of the cost than you used to. And the opportunities that this opens up, the applications that people are going to be able to build are pretty profound. So we were always like very, you know, and I was in particular, very motivated by this like, you know, long term, you know, belief in outcome and what could be possible. But yeah, some of those things happen, you know. The only thing that was like, that did, you know, I'm not going to say that we were like completely unshakable. We always had this belief. But the one thing that at some point, this was like, you know, the week that we launched our APIs was the week that SVB collapsed. And I remember that I had a conversation with Sean and I was like, you know, I still believe that we're right, but this might be now like 10 years away. I thought the timelines might be off a little bit.

Ryan:
[28:11] Little did you know, at that point in time, you were just 24 months away from the first major crypto legislation to pass in the US and it happened to be stablecoin legislation. And that is going to lead to basically, it's just overnight legitimacy for stablecoins and a stablecoin bonanza explosion. And you were only 24 months away from that at one of your lowest points as a startup founder thinking about your thesis. It's incredible. Yeah.

Zach:
[28:38] I mean, I think of anything like going through that at the beginning made us like, you know, we were always extremely worried about like putting our like proverbial next meal on the table, if you will, like, because the first like 18 months of the company was literally just like signing a bank partner, them kicking us off, signing a bank partner, them going out of business, signing a customer, them going out of business. And so it was like, even when things eventually started to go right, we were like, wait a second, this is not going to last.

Ryan:
[29:13] When did they start going right? Was that more like closer to 2024?

Zach:
[29:16] They started going right, I would say around June of 2024.

Ryan:
[29:23] Three. Okay.

Ryan:
[29:26] Okay.

Zach:
[29:26] June of 2023 is like, like we started early 2022. So like 18 months in, they started going right. And so we had launched the API. Maybe you come back to your previous question. What does Bridge do? Bridge facilitates money movement with stable points. Our view is that, you know, you have this fiat ecosystem that exists today and stable coins are like a scaling layer on top of the fiat ecosystem. And so you could kind of think of our mental model is that stable coins are like a layer two to the fiat systems layer one. And money would need to move up into this tokenized form to take advantage of all these benefits, but it will constantly need to settle back down to the layer one. And like a good example of this is a cross-border payment. Maybe it comes from fiat because, you know, the business or what have you are moving money in fiat. It moves up to the scaling layer. It becomes tokenized. It moves cross-border and then it might settle back down into the recipient's bank account in fiat.

Ryan:
[30:24] Okay. And so the layer one in this example, the kind of the fiat layer, what is that? Is that bank settlement that eventually gets down all the way to kind of like Fedwire somewhere?

Zach:
[30:34] Exactly. Exactly. And today, a lot of that money movement is up to the layer two and then back down to the layer one. And that's the way a lot of these... And a great example of this is Bridge facilitates people to store money in dollars all over the world. And they're storing those money in stablecoin dollars. And a lot of the way that that lands in their account is maybe they're a, we work with Scale.ai. Scale.ai is doing data labeling for AI models. Scale's business operates in US dollars, in fiat US dollars. Scale sends that money to Bridge. Bridge converts all that money into stablecoins and then disperses the stablecoins to the data labelers all over the world.

Ryan:
[31:20] And so it starts in this fiat layer.

Zach:
[31:22] We tokenize all this money and then we disperse it out to people to take advantage of the benefits that exist with stablecoins.

Ryan:
[31:30] So is that what bridge essentially is? It's kind of a bridge between the fiat layer, the layer one and all of these banks that settle down to kind of the traditional banking system and Fedwire and stablecoins, which is kind of the layer two and the tokenized world of stablecoins that we know you guys sit in between those. And so when you were talking about APIs, It's APIs between that banking layer and basically, you know, tokenized stablecoins.

Zach:
[31:55] Yep, exactly. And we basically built four developers. So those developers today are mostly fintechs or banks or startups. And they want to take advantage of, you know, moving money cross-border with stablecoins or accepting stablecoin payments or giving their customers the ability to store tokenized dollars or issuing cards on top of the stablecoins. And we make all of those accessible through pretty simple APIs. So they don't have to learn all the nuances of the crypto ecosystem and the fiat ecosystem and KYC and compliance and all those things. It's just packaged up and then you can deliver whatever value it is you want to deliver to your end customers.

Ryan:
[32:34] And so do you guys have a stablecoin like a USDC?

Zach:
[32:38] We do. Yep. We have a stablecoin and we basically offer today. So we started off back in coming back to your other question in June of when things started working. Our first core product was our orchestration. We call it our orchestration APIs. And the orchestration APIs just facilitate money movement between the fiat layer and the stablecoin layer. And the first use case that started working was stablecoins for cross-border payments. And so when it really started working was this company, Zulu,

Zach:
[33:13] They were like our first like I would say like real customer, you know, like, like we, I tweeted something, they found us, they were a huge pain in the butt to negotiate with. They like ground us down on fees. You know, I almost gave up on the deal like 100 times because I'd never sold anything in my life. And but then they came on the platform. And they were taking Colombian pesos, and converting them into stable coins. And they needed someone like bridge to take those stable coins and then convert them into U.S. Dollars in the U.S. so they could facilitate Colombian pesos to U.S. Dollar cross-border money movement. And so they just wanted a very simple service where they could send a stable coin and then tell us to deposit a stable coin into a bank account. And so we created a product that basically gives a bank account a crypto address. Wow. And so you just send a stable coin to a specific Ethereum or Solana or whatever address. And And that address is programmed to always take it, convert it into a currency and send it via ACH or wire to the associated bank account. And very simple product for them to use. They would hit the API, create it and send all they wanted to that account. And we would deposit it into the account. And Zulu signed up. They were growing, you know, 50 to 100% every month. And so as a result, Bridge was growing 50 to

Ryan:
[34:39] 100% every month.

Zach:
[34:42] And basically, you know, startups are this like really funny thing where in one lens, you could look at our company and you could say, wow, this thing is super fragile. And there's no product market fit because it has one customer. We had others, but like really it was a one customer. But on the other hand, you could look at it and you could say, wow, this is like really working because it's growing, you know, 50 to 100% every single month. And they carried us for like the first three, four months. And so I often wonder like what it would have been like if we hadn't found them. Like the difference between like, you know, now you look at Bridge and it's like, oh, Bridge is successful and like, you know, we're part of Stripe and, you know, stable coins are a thing. And so it's like always going to work. But at that moment in time, the difference between us being, you know, successful and like feeling like we had built something useful versus like launching a product and having zero traction, you know, like literally zero traction, no customers. No feedback was like one customer it's incredible and and and they gave us the confidence to then go sell the bitso then go sell the US government the US government was our next big customers shockingly wait what what department in

Ryan:
[35:55] The US government.

Zach:
[35:56] So there was a government aid program where they were dispersing aid to frontline workers across LATAM, and all of this aid disbursement happened in stablecoins. No way. And it happened previously through Silvergate. And so then when Silvergate went out of business, they had no means of dispersing these payments because it's really complicated. You would have to take the money from the government, convert it into stablecoins, and then send thousands of stablecoin payments out. So it was more than a human could do.

Ryan:
[36:26] In dollars, basically. So I was kind of thinking when you go through this story, I was kind of thinking about, do you remember our stimmy checks? Do you remember the stimulus checks that every American received and how weird and janky that was? I mean, I think I got mine through ACH. Some people got checks. If you didn't have a bank account, you didn't have the setup, I don't even know if you got yours, right? Basically. But like with stable, it's a similar thing at a much smaller scale, I'd imagine in terms of you're just trying to helicopter some funds to a specific group of people or organizations. And like, how do you do that in the existing fiat layer one system? Well, the answer is probably it's a pain in the ass.

Zach:
[37:03] And it's super expensive, like, like, because you have to take the US file format of money, send it through a US partner who then converts it into whatever the local file format of money is, maybe it's like Argentinian pesos or Brazilian reais or whatever that costs money. And then you have to deposit it into the local account, which costs more money. And so in each case, there's fixed fees and variable fees. And so for small sums of money, it literally is not possible to disperse these funds in an economical way, which is why they, previous to us, had elected to do these disbursements in stablecoins.

Ryan:
[37:41] Let me ask you about this, just like maybe zooming out. If you're thinking about kind of the layer one being sort of the banking and almost the settlement layer for fiat, for stablecoins, right? And the layer two is kind of this tokenized stablecoin layer with crypto native platform. Zach, if more and more starts to happen in the layer two, because it's just more usable, more functional, the quote unquote, the fintech apps around the world and emerging economies in the US start using that layer two more than they use the layer one. Appears to me happens as you start to essentially bypass the existing banking settlement system at some degree, or at least the rich state, the actual application happens more and more in the layer too. And the banking system just starts to become kind of a dumb settlement layer, if you will. They're not really doing the kind of the cool value accretive, interesting things. They're not building the apps, but it kind of marginalizes the banks at some

Ryan:
[38:43] level to just doing settlement. And I'm wondering about this in the context of if that is the trajectory that we're on, do you see kind of some conflict with all of the existing traditional banks.

Ryan:
[38:55] You know, the JP

Ryan:
[38:55] Morgans of the world? Jamie Dimon, I recently saw this came out and he said, you know what, there's a fintech called Plaid. I believe you know more about this, Zach, but Plaid taps into all of the banks, you know, basically around the world and gives you a way to kind of like through their API connected to all these banks. Jamie Dimon said, you know what, We don't want Plaid pulling customer data, even on our customers' behalf. We're going to start throttling them, or we're going to start charging them a fee in order to do this. Because basically, he's saying, we don't want to be relegated to just this dumb settlement layer with 0% margin compressions, essentially. And so I'm wondering, if more moves up into that Layer 2 stack, and it becomes more crypto, more fintech focused, will the banks just like, they're not going to tolerate this, are they? they're going to fight back against this. Are you seeing some of that?

Zach:
[39:46] I think that they, I think that some will. I think that, so I think that if you take, if you take regulation out of the picture completely, and you just say like, okay, the world is this like, you know, government free libertarian paradise, we would certainly move in that direction, where more and more money movement would happen through stablecoins over time. You know, if you kind of think of the stablecoin layer sitting on top of the bank layer, more and more deposits would aggregate to the stablecoin layer, more and more consumers would solely interact through the stablecoin layer and the banking layer, which today is really big and like, is the primary conduit through money movement would shrink, would shrink progressively over time and the stablecoin layer would grow over time.

Zach:
[40:39] I think that is like the natural way things will move. And the reason is like purely practical is that it's going to be easier to build applications on the stablecoin layer. You're going to be able to get better economics as a consumer or a business by building on that layer. Money is going to move more cheaply on that layer. Settlement's going to be easier on that layer. It's just going to be practical for more and more transactions to live at that layer. I do think like the big question for us over some period of time is like all money movement, all finance, all financial services are downstream of regulatory requirements.

Zach:
[41:17] And so that's the big question of like, you know, how much moves up to this layer. And obviously the banks are doing as much as they can to protect the size and importance of their layer.

Ryan:
[41:35] I'll give you one example of that layer. So one thing it seems like the banks really want to protect is yield on essentially treasuries, short duration treasuries, for instance. So as part of the Genius Act, there was this carve out where the bank said, hey, stable coins issuers can't directly offer that, what, 4% yield directly to customers. Only banks can do this. I'm simplifying. You probably know the complexity of it. Only banks can do this. Well, it turns out in the aftermath of this, there's a little workaround that crypto is doing where you don't have the issuer like Circle give those yields to individuals who have a stablecoin at 4%. You have maybe an exchange to it. And so right now I can go on Coinbase, for example, with my USDC and I can get rewards up to it's not quite 4%. You know, Coinbase takes their cut, whatever.

Ryan:
[42:24] But I actually get some of that yield just by holding stablecoins. And you can imagine crypto and DeFi, there could be all sorts of different ways for people who have stable coins to get that yield. And the argument, blank slate argument would be, why shouldn't they? Why should the banks get to keep that 4% yield? Why shouldn't somebody who just owns a stable coin, why shouldn't that flow back to individuals, citizens? Like, why should this theft of 4% and this rent seeking behavior from banks actually happen? Well, it turns out the bank consortium is coming out and they're saying, no, no, no, no, we want to plug this loophole. We don't want crypto organizations to be able to take advantage of this yield. And it seems like there's a fight between the lobbyists right now. So you have like crypto and fintech on one side versus the banks, but the banks are pretty powerful. They've been in D.C. for a while. They, I don't know, they control some aspect of how the game works. And this does seem like a clash of the titans in the making. That's what you're saying. It does.

Zach:
[43:23] I would also say, though, that it isn't necessarily crypto versus the banks because it's not like Tether is giving that yield back.

Ryan:
[43:31] Yes.

Zach:
[43:32] Nor is it like Circle is giving a lot of that yield back.

Ryan:
[43:36] Nor are they incented to want to.

Zach:
[43:37] Give that yield back. Exactly. Exactly. And this is one thing I think a lot about is that like the, you know, before I started Bridge, I kind of had this view that like things that were that made sense were like kind of inevitably going to happen. So like to the point that you're making of like this, this yield going back to consumers, it's like, it's inevitably going to happen. Like, you know, it just makes so much sense and so on. But now it's like much more clear to me that like, no, nothing, nothing is inevitable. The only things that happen are the things that somebody or some small team of people or some large team of people fight to make happen. And the yield going back to consumers, you know, will really only happen if someone like us build the mechanisms for that to happen very consistently and change the market dynamics. Because even if stablecoins are successful, if only USDT and USDC are the primary stablecoins in existence, then, you know, and nobody else issues stablecoins, Tether's never going to pay yield back. That's just not their thing.

Zach:
[44:54] And so at some point in time, Circle and Coinbase are going to stop too, you know, and that surplus is actually not going to go to consumers and businesses. That surplus is just going to aggregate to the new equivalent of like a Visa MasterCard. And so you actually need Folks, to build, you know, and this is one of the reasons why we have our stablecoin is to create mechanisms so that, you know, the benefits of stablecoins, the economic rewards from stablecoins can be better diffused down to end customers and diffused down to end businesses, which then, you know, improve the economics for the platforms and so on. So we think this is like really, really, really important. There's like the regulatory fight that's going on, but there's also like just the long-term stablecoin market structure fight that needs to happen to make sure that this creates, you know, surplus for consumers. It doesn't just rearrange value between, you know, these previous financial institutions and these new financial institutions.

Ryan:
[45:58] So being not having a dog in the race, except the dog of just like being a, you know, a stable coin holder at some level and, you know, representing, you know, just individuals who want to receive these yields. I definitely would love to see the rent seeking, you know, kind of go away and for more of these yields return to the customer. And so let's talk about maybe the genius bill itself. And right now, crypto is almost in a duopoly of stable coins, I'd say. There's Tether, of course, with the dominant share, and then there's USDC. And it appears like liquidity begets liquidity and it does appear to be that there's kind of power law dominance at play here. That said, we're only at what, like 270 billion or so, okay? And stable coins are going to grow well into the trillions and the Genius Bill opens the door for all sorts of new issuers to enter the market. We already have some fintechs playing the game. There's the PayPal stable coin they've entered. You guys have your own. I imagine Stripe is going to do something big here. There's also talk of Amazon could enter the ring, Walmart could enter the ring. And so it does seem like post-genius, we're going to be in this period of time where we're going to see all sorts of different issuers enter and all sorts of different experiments at play, all trying to get as much liquidity as they can.

Ryan:
[47:17] And get a dominant position,

Ryan:
[47:18] And all will have different takes on it. So how do you think this stablecoin market will now play out post-Genius? Maybe you can talk about Stripe, what you guys are thinking there, but then also just generally, do you see a whole bunch of experiments that will play out, or what is the structure here?

Zach:
[47:35] Our view is that there will be many, many different stablecoins. I think that every platform should have its own stablecoin. I think that, you know, we could see a world where there are tens or hundreds or hundreds of thousands or millions of different stablecoins. However, the differences between these stablecoins will be like totally abstracted away. And so I think you're only going to have a handful of like branded stablecoins that people know and name, you know, the USDT, USDCs. And I think USDT and USDC are going to be way more successful tomorrow than they are today. And we obviously hope that they are because they're doing an enormous service to the space. And there are real network effects to their businesses. They're building liquidity. They're building FX trading pairs. There's, you know, this is like very hard for, you know, PayPal tried and spent a ton of money to break in and build liquidity for PYUSD and it's been hard. It's a very, you know, there's probably room for five or some handful of these branded stable coins. And then I think that platforms, when platforms are building with stable coins, you know, like Robinhood is building with stablecoins or, you know, a Amazon that you mentioned or a Walmart or, you know, banks are building with stablecoins.

Zach:
[49:04] They're going to choose to have those stablecoins be stablecoins that they control. And the reason is that they're primarily going to be internal stablecoins that they're going to be using to move money amongst their users to disperse funds to their customers. Those liquidity benefits the USDC have are irrelevant for their internal use case, like Walmart moving money between its like 20 different entities or whatever across Europe is just internal transfers. They're going to want it to be in their own stable point. They're going to want it because they want to control the reserves. They don't want them to be held at, you know, with Circle and commingled with everyone else. They're going to want direct access to the yield. And they're going to want to control the dollar that it is, you know, like right now some of these issuers are charging burn fees to get out of the money like why would you ever move a bunch of your internal funds into a stable coin that charged you money to to convert back out of it makes it worse than fiat funds so you know you're gonna want to control your own money it is like like Not in like a decentralized way of it, but like you don't want to be beholden to some other platform whose interests will be supreme to your own if money movement is core to your business in some way, shape or form.

Ryan:
[50:33] Okay, fascinating. So let me make sure I understand like the world that you're describing, your world. So you see a world of maybe, say, call it a handful of branded external stable coins, the types that we see in a Tether or USDC. And each of those, I got to imagine, it's going to have its own shtick, its own thing, right? It's like right now, Tether is kind of used mostly outside of the US and the rest of the world, international world kind of prefers it. USDC is known as kind of the compliant coin. Maybe there's room for another. Maybe there's room for one that kind of provides a way to pass yield back to its customers. or there's some other things that might be it. But these are a small set of external kind of stablecoin players. But then every major company is going to have their own internal corporate stablecoin as well. And I almost think of like, you think about Starbucks gift card points right now. I mean, they sort of have that in a way. It's not in a fungible ERC-20 stablecoin type of setup, but it exists inside of the Starbucks balance sheet. And so you see a world of that. And then you see a world of many thousands of these things, hundreds of thousands, many millions of these things. But I got to imagine they are all composable with each other, right? I don't want to have my Wells Fargo dollars and they're no good at JP Morgan

Ryan:
[51:45] because JP Morgan has JP Morgan dollars and I got to do a swap here. That all has to work the way it works today, which is all be kind of fungible. Anyway, is that the world that you're thinking? Can it disabuse me of some of these things, if you will?

Zach:
[51:59] Yeah, I mean, totally. And two really quick examples. So let's say that every bank is moving funds with stablecoins because of settlement benefits or what have you. Wells Fargo is never going to use J.P. Morgan's stablecoin. It's just never going to happen.

Ryan:
[52:16] Internally to Wells Fargo.

Zach:
[52:17] Yeah, never. Because all of J.P. Morgan's stablecoins have reserves held at J.P. Morgan. So that would mean that Wells Fargo's reserves are now held at J.P. Morgan. It just makes no sense. So that's like never, never going to happen. Another example is like, let's say you're Polymarket. So Polymarket today operates primarily with stablecoins. You're going to enable, just like Polymarket does today, for people to bet with whatever stablecoin they want. They could send in USDT, they could send in USDC, they could eventually be able to send in dollars, they could send in whatever. And then internal to Polymarket, you're going to want this to run on PolyUSD or some stablecoin that is internal to Polymarket because you're going to want to make sure that if Polymarket ever builds their own layer two, that their stablecoin could go to that layer two. You don't have to convince some issuer somewhere else to move the stablecoin over and make it work. You're going to want to make sure that there are never burn fees tied to this so that you can always, you know, handle redemptions without any cost. You're eventually going to want to program some aspect of the smart contract of these dollars yourself. And so it's going to be important for Polymarket to control the dollar, the programmatic and tokenized dollar that it builds on so that they can control their future.

Ryan:
[53:40] They probably also want to share the yield, right?

Zach:
[53:42] Yes, yes, yes, exactly, exactly. So we think this is a world that should exist, but it's one of those things like it has to be built. And so the Genius Act is like a very important first step to enabling it to

Zach:
[53:57] be built and enabling much more receptivity to it. And then there's a bunch of work that we need to do to actually make it happen.

Ryan:
[54:03] But back to your example. So let's say Wells Fargo pushes money to JP Morgan. What do they use? Like what's kind of, do they have to go to an in-between stablecoin? Do they have to go to USDC or something in order to get it to JP Morgan? Or do they handle that, you know, in the back end, back to the kind of the layer one, the fiat system again?

Zach:
[54:22] Yeah, what I imagine will happen is there will be a whole like clearinghouse for stablecoins. Okay. And so every day these stablecoins will move between banks. And then at the end of the day, reserves will net and move like the actual layer one settlement will be cleaned up and balanced at the end of every day. And so you'll only end up moving the net amount, which is roughly similar-ish to how things kind of work today with kind of different settlement windows. But I think that's how it will work.

Ryan:
[54:55] One really cool thing about maybe what you're doing at Stripe is it appears to me it's in this era where fintechs are all going through their crypto transformation. And it seems like Stripe is now signed up to fully go and be one of the pioneers of going through their crypto transformation. So it's interesting. I've been tracking the Carlson brothers for a while, and they tried some things in crypto previously, including Bitcoin in the past. They were skeptical of that. It seems like now this is the first, and I think they tried integrating the Lightning Network and all of these things, early just crypto experiments. This is the first time we've seen Stripe go all in on something in crypto. And it started with stablecoins, the acquisition of Bridge. And now they've also purchased Privy, which is sort of a crypto wallet infrastructure type company. So they're making some big plays here, but it's just a macro meta of fintech companies going through a crypto transformation.

Ryan:
[55:49] I'm wondering if we could project, maybe use your mind, you're kind of seeing the futures. You saw Stablecoin very early, five years later or so. And what does fintech look like five years later after we've gone through this convergence period? Something like Venmo is something maybe our American listeners use every day, does that turn into like a crypto wallet? Are we using it rather than, you know, the dollars inside of PayPal? Is the backing of those? Are they actually all stable coins underneath? Like what sort of things do you think we'll see happen through this convergence if we project five years later?

Zach:
[56:23] I think that most financial assets will be tokenized. And as a result, I think the foundational building block for every fintech will be a wallet.

Ryan:
[56:36] Wow.

Zach:
[56:37] And I think that it's like, you know, today, people think of it as like this whole new world that they have to go and like learn about and participate in and so on. And it's just going to be you're going to hit an API like a bridge and you're going to create an account for a user. And that account is just going to be a wallet. And you're going to in that account, you're going to enable US currency, which will just be a stable coin. And then you'll enable euro currency, which will be a different stable coin. And then you'll enable you know, Ray eyes, which will just be a different stable point. And then you'll enable stock trading, which will just be, you know, another tokenized form of, of stocks and so on. And, and I, I think that we're sort of like, you know, barring any regulatory,

Zach:
[57:26] Dramatic regulatory changes, we're sort of on this glide path today. And, and one of the things I think that's like the, like that is kind of the most interesting dynamic that will play out to me is you kind of have all these crypto wallets that started, you know, obviously in the crypto space that are over time going to move more into the, you know, traditional financial services realm. And then you have all these more TradFi companies that are moving into crypto direction. And, you know, over time they will become blended, but like take Robinhood as an example. You know, Robinhood obviously started very traditional with stock trading and so on. They've moved pretty heavily into crypto trading. And now one of their big bets is to go international.

Zach:
[58:19] And so how do you go international as a, as a FinTech, you know, the, the way that I think they're choosing to do it, I don't have any insider info on, on them, but like one of the ways if I were them, I would do it is you build a wallet core to core to Robinhood. And then the amazing thing about a blockchain is it's like, is it's like, you know, open sourced financial services. And so then you're building on top of, let's say, Solana or some blockchain. Anytime any developer anywhere in the world adds something to Solana, that is now accessible to Robinhood.

Ryan:
[58:58] It's global state. It's open 24 hours a day. It's accessible in every country with an internet connection.

Zach:
[59:03] It is the old way of building financial services is you had to build everything yourself. As a company, if someone wanted to replicate Revolut, they have to build the regulated infrastructure in the next country and the next car product and the next stock. They have to build it all themselves. The amazing thing about blockchain is that people build a tokenized BRL for Solana. And now, boom, Robinhood doesn't have to add that. But now Robinhood has, you know, Brazilian Rai deposits natively. And now you can store a balance in BRL in Robinhood.

Ryan:
[59:40] Easily. And someone else built that.

Zach:
[59:42] And then someone else builds euros. And now they can store euros. And then someone else builds tokenized treasuries. And now they can offer treasury yields. And so you actually open source your financial stack and let the world build, and then you internalize those services. And this is why I think that everything will move on chain, because you move from this world of like individual companies building up, which are limited by their own capacity, to a world where you have this massive shared resource of everything that's built on a blockchain. And you're just internalizing those services.

Ryan:
[1:00:20] It's funny because it's a simple narrative and we've said this is the way it's playing out. Now it seems like you're saying it's actually playing out this way,

Ryan:
[1:00:28] which is basically all of the bank accounts that we use, they become crypto wallets in the future. Whether we know it or not, it could be on the backend, but they all become crypto wallets and all of the assets that we hold, they become tokens. They're crypto tokens somewhere. One other question, I guess, with this is We've seen some fintechs like Robinhood, for example, and even Coinbase. I guess maybe Coinbase is now more of like moving toward the fintech company. They also launched their own ledgers. So those two have layer twos, of course. And then we've seen some companies, you know, Circle, notably recently, launching a layer one. They're having kind of a stable coins, maybe a payments layer one. There's also been news recently that Stripe is going down the path of launching its own layer one. In fact, there was an announcement recently that of the Tempo project and some detail of what you guys are doing there. How does that fit into the stack? Do all of the banks, they're effectively, I guess, private ledgers on the scenes anyway. Do all of them convert to become sort of... Private slash public ledgers, blockchain ledgers, essentially, and launch their own layer ones or layer twos? How do you see that evolve?

Zach:
[1:01:39] Well, for us, it has evolved very naturally. I mean, we, I would say Bridge was probably one of the first, I don't know if we were the first, but we certainly felt like one of the first companies to try to build payment scale infrastructure on a blockchain. And it was really hard, like, and continues to be really hard. Blockchains are good for a lot of things, but they are not great at payment scale functionality.

Ryan:
[1:02:08] Like building something on Ethereum, I could imagine. Just you have gas fees, you have...

Zach:
[1:02:12] Even Solana. Take the blockchain that everybody loves and thinks is like the poster child for TPS and so on. So we had a customer come to us the other day. They have millions of accounts. They want to enable stablecoin accounts for all of their customers. In order to do that, you have to spin up a Solana wallet for everyone and you have to prime that wallet to accept USDC. Both of those things require Sol and about 30 cents of Sol in order to do that. So it was going to cost them hundreds of thousands, if not millions of dollars just to enable this product because that is the way the Solana blockchain is designed. It was just not designed with this type of use case of like some developer coming along with millions of accounts and wanting to enable it. Like no one is going, not no one, but very few people are going to just like spend, you know, a million dollars just to enable functionality that your users haven't even tested yet. Or there's, you know, very early on with the deliverability of, you know, these aid programs, we had to send thousands of payments out at the same time. With fiat infrastructure.

Zach:
[1:03:28] Fiat moves super slowly. It moves so slowly, in fact, that we have built insane amounts of infrastructure on top of it to make sure that money does not move. And so with fiat infrastructure, what ends up happening is, let's say you wanted to pay tens of thousands of people all at the same time, you would use something like PayPal,

Zach:
[1:03:52] And you would load all the money into PayPal, and then you'd click a button, and then it would just be ledger updates to update people's accounts. So the money wouldn't actually move. You'd load it in like three days before, make sure it settles, and so on. But with a blockchain, that's not how it happens. Everybody has their own wallet. So you actually have to move the money into people's individual wallets. And sending 20,000, 30,000, 50,000 transactions on a blockchain at the exact same time is not possible, no matter what blockchain you try to send it on. And so the first time we did this aid disbursement on Stellar, we were super naive. We were like, okay, click button, send money. And it took like 18 hours for us to process through all of these transactions on Stellar, which is another pretty high throughput blockchain. And a huge percentage of them failed and weren't picked up. And then there were all these support requests that came in because people were like, hey, you said my money would be delivered at like 9am, but it's still not here and so on. And so then we had to build all this infrastructure to simulate to like make it such that we prioritize different transactions and we could minimize the number of support requests. A quick example is that we took every transaction that was over $50, which was a big payout, and we prioritized those first because those are the people who are going to check.

Zach:
[1:05:19] And then we set up seven or eight different synchronous jobs to send out these payments. And then we progressively would move down. There was no way to deliver them all in real time. Anyways, blockchains are just struggle with payment scale problems. And so the way we came into this is that we needed to build the infrastructure that solved our unique pay points. We weren't focused on, and we still aren't focused on trading. We just want something that's super high throughput, that has like some core functionality that's important for payments, payments companies, and has the deliverability that everyone is looking for if they're going to run their bank. If they're going to run, if they're going to pay all their customers, if they're going to run payroll on top of this rail. And so for us, building and investing in Tempo became super important. But just to be very clear about Tempo, Tempo is not like a Stripe blockchain. We also did not believe that these like private corporate blockchains would be successful. Because people aren't going to want to build on someone else's blockchain. They want to build on like shared infrastructure that they believe is going to be good for everyone. It's the same reason that the same skepticism we have about everyone building on someone else's stablecoin. You don't want to subordinate your interests to those of some other, you know, economically interested party.

Zach:
[1:06:48] And so that's why Tempo is actually a, Stripe is a major contributor to Tempo. Bridge is a major contributor and collaborator on Tempo. But Tempo is an independent entity, you know, and a neutral blockchain built outside of Stripe.

Ryan:
[1:07:06] So Tempo is going to be an independent entity, a neutral blockchain that is also a layer one EVM type of, is that the?

Zach:
[1:07:14] Layer one, EVM, super focused on TPS, no noisy neighbor problems. You know, your transactions are not going to get stuck because like Trumpcoin came out, which happened to us on Solana. You know, there's going to be private transactions, which are super important to every payments company. There will be very quick finality, which is also really important. You know, Ethereum is like 12 minutes to get finality, like sub one second finality. So a bunch of stuff that's very, very important to pay. And it would allow you

Ryan:
[1:07:46] Guys to do a use case, like if you had a million people, let's say, in the US, and you wanted to just send them each a stimulus check, for instance. You could just do that on this chain, basically. They could pick it up, and they could pick it up in their, any EVM-compatible wallet that they used, and boom, it would be there, right? Basically, it has the scale to do that.

Zach:
[1:08:07] Yeah, and importantly, we could do it, or PayPal could use it and do it. If it was helpful for PayPal. You know, this is like, this is where it is. We view this as like a very important thing public good for the broader stablecoin ecosystem. And so, you know, Stripe is a major contributor to it. We are investing and building on top of Tempo, but we will have the same rights and interests, you know, to roadmap or what have you as anybody else.

Ryan:
[1:08:41] So how do you think, Zach, this will evolve? Like specifically, layer ones, you know, fintechs like Stripe getting kind of the layer one business. We've seen Circle get into kind of the layer one business. It is the case definitely that within crypto generally, the advent of more centralized stable coins has not taken away from the crypto native assets that we have, like something like Bitcoin or Ethereum or Ether. Actually, it's kind of accelerated the growth of some of these core assets. And so they're kind of growing in parallel. They don't settle down to kind of the, as you call it, the layer one of fiat at all. They have this whole independent settlement network and they've grown alongside stable coins. What do you see happening with layer ones? There are some people out there, and I'm specifically talking about maybe a stripe layer one, like Tempo. And again, you're saying it's not a stripe layer one, but something like Tempo, right? Do these eat the market share away from some of our public blockchains, the Ethereums of the world and the Layer 2s and the Solanas of the world? Do they complement them? How do these interact? And how do you see this evolving? Will every fintech, will every bank publish its own Layer 1 or maybe kind of a Layer 2? Or will there be some power law winners to that game? How do you see the ledger piece evolve?

Zach:
[1:10:01] I think that with Tempo, it's very complementary. Our view is that the reason why Tempo needs to exist is because the functionality that it is providing does not exist in the market. And so the stablecoin space itself would be much smaller without something like a tempo in existence because you just do not have the infrastructure on top of which someone can build payment scale operations today.

Zach:
[1:10:35] Like just doesn't doesn't exist and it's not even close and and so in that respect i view it as extremely complementary to all of the other you know blockchains that exist today i do think that my mental model is that you will have a few kind of like general purpose blockchains that exist you know and i think like base is a great example like base is like clearly going to be a winner

Zach:
[1:11:04] It's a great product that the Coinbase team has created. It's a general purpose blockchain. And Solana is another one. There will be a few of these. I think it's very hard for someone now to create like, I'm just going to create a generic blockchain and hope that it attracts a lot of volume. Now I think we're entering a phase where folks are going to build blockchains that solve very specific problems that these general purpose blockchains don't solve. This is what we're doing with payments use cases. I've talked to other teams who are building blockchains for trading use cases, like very, very, very high throughput, low latency trading use cases, which requires a totally different set of requirements. And these blockchains will solve like very specialized things that the generic blockchains will not solve. And then I think there'll be a third type of blockchain, which will be like maybe like coming back to the Polymarket example. Polymarket might build its own blockchain so that it controls its own block space and so on. These will be application-specific blockchains. And so you'll move and like there'll be a few very general, then a few sort of like feature-specific blockchains, which is where we're going with Tempo, and then there will be many application-specific blockchains. That's my mental model today. Okay. Very much subject to change.

Ryan:
[1:12:30] A whole bunch of blockchains. It's a whole bunch of movement on chain. And so five years from now, where does this position fintech or just how finance works, maybe in the US and around the world? So if you kind of go down enough layers, I think traditional finance and the banking system and back to kind of the settlement layer of that layer one, I don't know, it's all like IBM mainframes written in like COBOL. It's like some nasty, weird stuff and a whole bunch of paperwork. I mean, if you do anything in finance, it's still, it appears digital on the surface layer, but like, I think there's offices of like people doing paperwork in the background and not faxing things around, but like the legal documents are all just like still paper and I can't believe this.

Zach:
[1:13:12] So, and they might actually be faxing.

Ryan:
[1:13:14] Yeah, exactly. And so are we basically doing a, I don't know, a switch from that existing legacy system and just like migrating more and more to these new crypto blockchain based systems and doing that over time. And so basically what happens is the fintech user interface stops using the mainframe TradFi backend and starts settling more and more into blockchain.

Zach:
[1:13:38] Yeah, I mean, I think that's what's going to happen. And I think that, you know, today to like take a bridge specific example, you know, Our business was built, our very first product, the product that made our business was Stablecoin Orchestration, which was moving money between fiat and Stablecoin, this layer one and this layer two, and doing it a lot because people needed to do it a lot and still today need to do it a lot. What I think will happen for our business is that will become an increasingly niche service.

Zach:
[1:14:16] Over time. That's what I hope happens is that you decreasingly need to settle to the layer one. And like, you know, take the bank example that I went through before, you're going to have, you know, millions of different stable coin movements for every one fiat movement. Whereas today, it's kind of like one for one, you know, or even two fiat movements for every one stable coin movement. And I hope that ratio changes over time. And I think that's what success is, is more and more of the financial services that we have today can be facilitated and settled on this blockchain layer.

Zach:
[1:14:58] But we're still like, it's like hard to even begin to express how early we are in this journey. Just coming back to it, like the basic things of like sending a bunch of transactions simultaneously are really hard to do. Like really, really, really hard to do on a stablecoin. We don't have any local stablecoins. You know, the stablecoin market is like 99.9% US dollars, which is great, which is great for the first use case of stablecoins, which is like trading and like access to US dollars. But if you want this to become a core part of the financial system, you need local staple coins. Like I'm very optimistic that those will be very important in the next like five to 10 years. So there's just a bunch of pretty big building blocks that we don't have today.

Ryan:
[1:15:49] So the Secretary of Treasury says by 2028, he's citing other research that we'll have, you know, three trillion or so in staple coins on chain. I mean, do you agree? Is that the kind of scale we're going to grow to? I mean, how quickly and how fast does this grow and how large does it become?

Zach:
[1:16:03] I mean, I think that's U.S. stablecoins. So I think that it could be an order of magnitude bigger if we're successful at bringing on tokenized euros and tokenized pesos and tokenized yen and so on. But that is also downstream of regulation. So today, one of the great things is like the U.S. Is kind of very quickly went from a laggard to a leader in sort of regulatory clarity, which helps us sort of speed run a bunch of these markets. But we need the same thing all around the world.

Ryan:
[1:16:40] So what is holding us back at this point from basically the entire world, all of finance adopting crypto and making that switch even sooner? I mean, you mentioned regulatory, and so maybe that would be in your top three list. There's also, I mean, UX still.

Zach:
[1:16:55] Is kind of

Ryan:
[1:16:56] Hard in crypto. I mean, we still have wallets with seed phrases in many cases that are sort of difficult. There's also, do we have the chargeback protection, consumer protections that something like Visa or the established credit card companies have? Do we even have on, I guess, the compliance and privacy side, AML-KYC that would be necessary for countries to adopt this? What are the top three things missing, do you think, still in the stack for crypto to get to the trillions and go completely mainstream in the way that you've been describing?

Zach:
[1:17:28] I think the... The most straightforward answer is like, you know, regulatory clarity and accounting clarity. That's probably the most straightforward answer. But I would say more tangibly for us, what I have felt is the biggest barrier is education. So Stablecoin, we've had decades where teams and have built expertise and familiarity of building on top of fiat systems. And so you go into any company that moves money and there are dozens of people who understand how to do FBO accounts and build internal ledgers and maybe even send, you know, ACH batch files and like all this crazy stuff. But people have built those skills over many, many, many years. And then you go in and you talk to them about spinning up a wallet and everyone's like head explodes. You know, you would think that you're asking them to go to Mars or something. It's like a totally new financial stack that's completely unfamiliar. And so the biggest thing that we face is this lack of familiarity with this new platform. It's a new technology. It's a new platform. And it touches the thing that is like the lifeblood of every company.

Zach:
[1:18:49] And so people are very risk averse. And I would say that's like, we'd probably be moving like 100x faster if we had one person in every single company who is deeply familiar with crypto. The other thing is that there just are not very many engineers on the planet that understand crypto. The number of folks who understand smart contracts, the number of folks who've built with wallets, It's probably one of the smallest engineering communities in the world. If you're an engineer and you're looking for where do you position yourself to have the most unique skill set imaginable, it is very obviously in the crypto space. Super obviously in the crypto space. It's something that's going to be phenomenally important to the world. It's something that's going to touch money movement at every company, you know, on every continent. And there are, you know, only, you know, hundreds of people, it feels like in the world who know this space really, really well.

Ryan:
[1:20:05] There are a lot of engineers at Stripe, of course, and now you're part of a bigger engineering team, let's say. And so for Patrick and John, we talked a little bit about their experience in crypto and kind of moving to a more bullish stance. How crypto-pilled are they at this point? How crypto-pilled is Stripe?

Zach:
[1:20:24] And so when we were like going through the acquisition process, I went to the Stripe offices to have lunch with John and Patrick. And I like walked in and I think this maybe was like the first time I met John in person. And the first thing he said to me, he was like, so can I tell you a joke? And I was like, yeah, sure. He's like, what's the difference between a bank and Tether? And I was like, I don't know. And he was like, well, one of them is like this big institution that holds a ton of money and you have no idea where the money is. And if you ever want to get your money out, you may not be able to because it's in all these super esoteric assets and there's literally no visibility into where the money is held. and the other one is a stable coin.

Ryan:
[1:21:25] I mean, he has a point.

Zach:
[1:21:28] And so I think that at a pretty deep level, they are very big believers in the stable coin space and very much understand the promise of the technology. I mean, they were believers in Stellar. I think Stripe was one of the original investors in Stellar way back when, they obviously experimented with Bitcoin, realized that wasn't going to work super well for payments for a bunch of reasons. And so I think when they like, you know, as stablecoins started having this moment and they sort of learned more about Bridge and the use cases that we were solving, pieces clicked into place.

Ryan:
[1:22:09] Stripe is an absolutely massive company with tons of relationships. So what's your hope for how crypto kind of saturates Stripe and, you know, how this fintech company converges into a fintech company going through a crypto transformation?

Zach:
[1:22:26] Uh i mean i think one of the things that i am the most excited about is you know with the products that we build i kind of am like like i don't think anybody is going to want to use a stable coin just to use a stable coin people are going to want to use a stable coin or build with wallets or use our apis because we deliver some very tangible business value to them we enable them to enter a new country, we enable them to serve more consumers, we enable them to save money, we enable them to generate revenue. But there needs to be some very tangible benefit that we provide. And one of the really nice things now about being part of Stripe is that the feedback loop on understanding that tangible value is like, you know, de minimis, because now we have a first best customer for everything that we want to do. And so, you know, it's not like Stripe is, you know, Stripe is 8,000 people. So even if like John or Patrick or whomever are like, hey, we want to build stable coins, there needs to be, you know,

Zach:
[1:23:34] Dozens of people who deeply understand the benefit to actually work on the thing and do it. And so if we encounter pushback from those teams at Stripe, it's the same pushback that we would encounter if we were like talking to Walmart or talking to Robinhood or talking to Revolut or Nubank or whomever. And so it gives us an opportunity now to like, as we push Stripe, you know, stable coins deeper into Stripe to understand where concerns are, figure out how to overcome those concerns and turn Stripe into like our first best customer. And then it becomes like a great proof point for all these folks externally.

Ryan:
[1:24:12] I guess you're full circle back to Zulu all over again, aren't you? Yeah, exactly. As we close this out, Zach, we've been talking about stablecoin users as if they're all human. There is another future where the biggest stablecoin users out there, the actual unbanked, could be AIs and AI agents. What are you guys going to do at Stripe to play a role in that transformation? You think AIs will be huge stablecoin users? And if so, how far away are we from that future?

Zach:
[1:24:40] So Simon Taylor shared this thing with me the other day. I forget, maybe it was on Slack or something. But he said that he was talking to this money historian. And every single time there's been some new technological revolution, there has been a new form of money that helps facilitate the progress of this revolution. And a great example of this that we can all relate to is credit cards and the internet. You know, the internet wouldn't be what it is without credit cards. And obviously, credit cards wouldn't be what they are without the internet. You know, credit cards were around a long time before the internet, like, you know, in the 60s. But they really took off credit and debit cards and so on in the late 90s into the 2000s. And now you could not imagine the internet without credit cards. It's like the default way value is transferred. And obviously, Stripe is a big accelerant of this trend. And I think stable coins are going to be the same thing for AI. I think a new form of money is going to be required to facilitate economic activity between all these agents. The existing fiat system has some challenges for AI, one of the most obvious of which is that in order to store fiat money, you need to be a human.

Ryan:
[1:26:02] That's a real problem.

Zach:
[1:26:07] And so what I think will happen is that we'll go through this challenge progressively. First, a lot of AI agents will be tethered to humans, so they will piggyback off of human KYC and so on. But over time, they will need their own accounts, be able to make their own decisions. And stablecoins and wallets make that possible. The other thing is that stablecoins and wallets end up are really good for small transactions, for variable transactions, for streaming transactions. And so they make a lot of different types of money movement possible that are not really possible today when you actually have to move money across this layer one that's super expensive and super slow.

Ryan:
[1:26:52] Yeah, it's incredible. It does seem super obvious to me that the finance stack, the banking stack that AI will use, will be crypto. How could it not be wallets and ledgers and smart contracts and actual tokens that they can hold? That's got to be the future. So maybe the next move for you guys, Zach, is to build the bridge between kind of the AI layer and the rest of crypto. This has been fantastic. Thank you so much for joining us today, Zach. I know Stripe's got some big announcements

Ryan:
[1:27:20] to come in the future, and we appreciate you hanging out.

Zach:
[1:27:23] With us today. Thanks for having me on. It's been fun.

Ryan:
[1:27:26] Gotta let you know, of course, Bankless listener, none of this has been financial advice. Crypto is risky. You could lose what you put in, but we are headed west. This is the frontier. It's not for everyone, but we're glad you're with us on Bankless Journey. Thanks a lot.

Music:
[1:27:47] Music