Building the Internet's Financial System

[Music] good afternoon uh really a pleasure to be here today to talk about building the internet Financial system we use this phrase the internet Financial system in some ways as a comparison to how we've built an internet communication system an internet media distribution system this is about actually bringing all of the building blocks of what a financial system is and all of the underlying economic activity onto the internet natively from the ground up that's what we work on here at Circle there's a few building blocks to this the first is just we use this mental model of thinking about blockchain networks themselves ethereum salana arbitrum Aptos s so many other blockchains as Internet operating systems so we have this new layer which allows us to have transactions and data and Computing uh in a in a completely decentralized way and it's and it's these internet operating systems are purpose-built for supporting these sort of uh trust minimized Financial applications so we're building on these new internet operating system layers and what Circle specifically both philosophically and in practice has been trying to do really since our founding is building a model of fully reserved money fully reserved digital currency money money that is held entirely backed by the safest assets possible cash treasuries Etc and that full Reserve money we believe is the right base layer of money for the internet Financial system as opposed to Bank lending money or fractional Reserve money so we have these new internet operating system layers with it fully reserved digital currency money and that leads to in our view what I like to call the new physics of money when you have a base layer of digital currency money that's fully reserved and you have internet operating systems that work at scale we now are reaching into an era where literally the velocity of money takes on the physics of the internet meaning money can move at the velocity of the internet instantly and likewise like other internet infrastructures that have commoditized the storage of information the transfer of information the the communications itself to zero we're now moving into a world where we're going to completely commoditize payment utility the movement of value the storage and transmission of value will be commoditized and exact actly the same way that that's happened in these other domains that the where the internet infrastructure has taken over so this is an immense Market opportunity the market opportunity as we see it is the hundred trillion dollar Plus in legal electronic money in the world today that legal electronic money is also used through a variety of utilities everything from retail payments to B2B payments to remittance payments to Capital markets transactions which alone the utility the payment utility generates over $1.5 trillion dollars of Revenue that's an opportunity that's available to all of us as well so what's the foundation of this for Circle obviously it's usdc so I want to give you a quick snapshot into the state of the usdc economy sitting here at the end of December or in December of 2024 so a couple key things we've seen an extraordinary amount of growth in usdc from when we launched you know 50,000 transactions uh now over a billion transactions the cumulative amount of onchain transaction volume for usdc is almost 19 trillion we're seeing around now accelerating nearly a trilon ion dollar a month of onchain transaction volume in usdc this is a widely adopted payment utility and we're just getting started we are also the fastest growing major dollar stable coin in 2024 we have grown on a percentage basis faster than any other major stable coin in 2024 and in the last 12 months and since just before the election so usdc is growing and taking Market share uh in the world today but I want to get into a a little bit of of the core of usdc because not everyone is always familiar with it but usdc is the most transparent the most liquid and the most Safe digital Dollar in the world today on the left here you can see the usdc balance sheet uh you can see the $41 billion of usdc and you can see exactly what's in it which is either treasury collateralized overnight repos us treasuries that are uh three months or less and cash reserves we disclose this with a major Global auditing firm deoe who does this every single month twice a month we're also audited as a firm by one of the big four uh Auditors but the circal reserve fund which makes up about 90% of the reserve is is issued by Black Rock the largest asset manager in the world all the assets are held on behalf of circle that is an secc registered supervised and independently audited reserve and within that you can go and see every single day with daily verifiable transparency every single Bond its maturity and and the underlying that is usdc the most transparent and in fact we believe we are the most transparent financial institution in the world because of this level of disclosure no one comes close but importantly we're also the most liquid and what do I mean by that Circle operates today direct liquidity where wholesale and institutional players can mint and redeem usdc directly in the United States throughout Europe in Hong Kong Singapore Brazil and Mexico direct liquidity with circle in those banking systems and in most of these 247 365 with more to come Japan in the near future UAE also coming in the near future so we're building the best direct liquidity in the world and as you saw and heard earlier today we will have the best liquidity in the world on the leading exchange distribution platforms binance coinbase and others uh so usdc the most transparent liquid and Safe digital Dollar in the world but usdc the asset is part of a much bigger platform that Circle operates the circle stable coin Network at the core of that is the blockchain infrastructure that we build around usdc the global banking Network that I just talked about and then we issue these regulated stable coins usdc EC and on top of that we offer a range of developer tools platform servic treasury services that are available to developers startups fintechs financial institutions to build on that is our platform building on that is a partner ecosystem of thousands of companies that have integrated to this every major wallet custodian exchange payment service providers custodians uh and and on and on so we have this incredible partner ecosystem that have plugged into Circle stable coin Network that add value to it and every every entity that builds on it adds value to the network itself and that basically builds out the entirety of the stablecoin network which end users can benefit from businesses can benefit from financial institutions can benefit from thirdparty applications can freely integrate to it building on the permissionless apis that public blockchains provide so we operate uh the largest regulated compliance stable coin Network in the world we have more onchain transaction volumes in stable coins than any other stable coin in the world and this network is growing significantly every every week every month and and so forth and we're seeing this go from not just crypto trading but into so many other areas real world utility for stable coins is erupting we're seeing it all the time the announcement we made yesterday with Lulu Financial a major Financial Group here about remittances flowing in the region as one example consu consumer payments the biggest uh Merchant uh payment acquirer on the on the web which is stripe introducing usdc right alongside credit cards and debit cards as a default payment option we're seeing it being introduced into Capital markets through tokenized real world assets that almost all use usdc as the way to create and redeem access to those cross bber settlements treasury Services other Capital markets applications we're seeing all of this happen with major companies and with the and and with what we're seeing in the future even more to come so we've made progress there's been a lot of progress since we launched usdc just six years ago but what comes next we're very early in this 200 billion stable dollar stable coins in circulation a total market for legal electronic money of a hundred trillion doll so in our view as this matures as we have legal certainty that stable coins are legal electronic money all around the world and as the technology matures to the point where we can use this as seamlessly as we use the web or email or Whatsapp or other messaging types of products which is happening right in front of us right now as all of that happens we believe that every organization in the world every corporation in the world will be built onchain and will be built and integrated in the internet Financial system we'll move to a world where onchain payments becomes the most ubiquitous form of payments where FX itself moves on chain through widely available stable coins in multiple currencies that can then be traded with the same speed liquidity and atomic settlement uh that we've come to see in existing crypto assets we'll see corporations manage their own money onchain onchain treasury management will have the benefits of the speed and security and and efficiency of blockchains having one of the largest in fact the largest custodian in the world of crypto assets binance announced with us today that they're moving their own treasury significantly into usdc as a symbol of what all future corporations may look to do as on Treasury and on pay payments comes in onchain credit will come to life not just defi borrowing and lending on margin but actually unsecured credit underwritten credit credit intermediation that's managed through protocols and smart contracts that distributes credit out to every business every startup every individual that needs Credit in an Efficient Market in the same way that we have efficient markets like Alibaba and Amazon or AdWords more more and more of economic activity is going to happen between agents between agents that are mediating Commerce and they'll be using the internet Financial system primarily to conduct their work Commerce itself will be executed in smart contracts and finally the basis of every organization which is ownership governance voting and treasury will move onchain we will move to a world with fully onchain corporations this is the future that we're working to build this is what we're focused on at Circle it's been a huge amount of progress and we're excited to work with everyone here as we all pursue this vision of the internet Financial system thank you [Applause] [Music]