Building with Money Lego Bricks | KBW 2023

[Music] good morning everyone uh glad you made it out on the second day we have a very special guest today all the way from Boston Massachusetts circles based out of Boston and then most of uh I actually didn't notice circle is actually near dur its 10 years uh 10 years in its existence this October we're actually we're we've just passed our 10y year anniversary oh from gradulations so circle is one of the oldest institutions in crypto that's uh that's a weird term to say because crypto is such a young industry but Circle as you know for usdc uh theable coin that powers which is a backbone of digital assets at the moment uh came to existence about 10 years ago and then for the Korean audience here Jeremy it would be good uh it would be great if you can provide some background what was your initial idea and thesis when you were starting Circle back in 10 years ago sure and it's it's super exciting to be here in Korea um I uh as I say in many parts of the world um it's amazing to me uh how vibrant the the global ecosystem is and how much activity there is everywhere so it's it's very clear that that continues to be the case here in Korea um a little bit of the the inspiration um you know before starting Circle I spent about 20 years building internet infrastructure infrastructure for building software on the internet uh for media Distribution on the internet communications on the internet and was always interested in how open networks distributed systems and open soft soft ware could improve how different parts of society operated um and that's what really drew me to uh crypto about 12 years ago and I think the inspiration behind Circle was this idea that uh a kind of missing layer of the internet was emerging with blockchains and that it would become possible and this was when we started around 10 years ago we We Believe that it would become possible to build what we called an HTTP for money meaning a protocol for money uh and we were thinking about money uh specifically in terms of traditional money so government obligation money government debt money but if we could represented in a digital currency form but allow it to be used on an open protocol in the same way that we have open protocols for information and Communications that that would be extremely powerful and would eventually allow money to move at the speed of the internet in an open interoperable way and and all eventually lower the cost of of storing and transferring money to zero um and then the other idea was uh you know my my background originally was in building developer platforms programming languages infrastr structure for for building the web uh in the in the mid90s and the idea of programmable money which was really as I say uh an idea on a napkin um over 10 years ago but that idea that smart contracts would emerge and you could have you know programmable money um was very exciting and we believe would eventually become possible and all of those ideas took a long time to develop um but eventually uh LED L to the launch of of usdc back in those days uh which is uh 2013 and 14 being the actual early days of crypto were you um worried about any type of Regulation that did ex ex exist at the time making a stable coin and potential implications that could potentially uh affect the business uh is there some some Vision that you had that some sort of future will shape out along that line from day one we believed that if we wanted to build a new internet Financial system it needed to integrate with the existing Financial system and it needed to be something that um uh where there were clear policies and rules around uh that integration and so we didn't start the company until there were the first regulations in the United States in March of 2013 the United States Treasury Department was the first government in the world to issue clear regulations for any firm that integrated the banking system with with blockchains and then we as a company have always sought to work with governments we've always sought out the clearest policy and we became the most licensed and regulated company in this entire industry in our first 5 years and it was only because of that that we were able to launch USD C in 2018 we built something that was compliant regulated and integrated into the core Financial system one of the reasons why people love usdc so much is that it is actually uh compliant transparent and liquid you can always redeem it through the banking system and it's only because of our constructive work with policy makers constructive work with Regulators that we've made that possible and that continues to be the strategy of the company with all these um new regulations coming in in the US and also enforcements actions by secs uh other entities um what kind of initiatives is circle taking on the ground in DC or other with other governments to adopt the current regulatory landscape with the new uh with the new product that circles launching or new initiative that circle's doing especially on a global scale working with different central banks and different regulators uh aiming for usdc to go Global and cross border yeah so as as I said you know we have always invested in working with governments and you know from the very earliest days I personally would spend time meeting with government leaders in every major country that I would visit and uh that would be leaders in central banks and finance Ministries uh other Regulators because it's it's really important important when you have a new technology like this to always be doing the hard work of educating um now I think it's been amazing to see the huge progress that's been happening all around the world with policies and regulation around digital assets we've seen more progress in the past year than the entire previous you know nine years combined and I my view right now is that by the time we get to 2025 digital asset the digital asset industry both the markets side of it as well as the stable coin side of it are going to be consistently and comprehensively regulated in every G20 Market in the world so we're seeing huge progress um and I view it as progress I think there are some who view that as a as a really negative thing my own belief is that until you have uh a legal basis for digital assets and a legal basis for things like stable coins you will not see um you know Mass scale adoption Society whether it be households or corporations or or financial institutions themselves they will not Embrace this and use it until there is that uh that that regulation in place and you know specifically I don't know how much people have been watching but you know several years ago the uh the the G20 came together uh and came up with a set of recommendations for stablecoin uh rules around the world and they all agreed at the G20 summit we're going to do this and that's now working its way through all of these major countries and so each each country in the G20 has a different process some come through direct uh guidance or rules issued by the regulator some require a kind of approval through Parliament or Congress or the different legal bodies but we're seeing that and uh people always ask about is there going to be regulatory Clarity for stable coins we have regulatory Clarity in in Singapore in Hong Kong in Japan in the UK in Europe in the UAE and in bills that are making their way through the United States Congress right now there are relatively consistent rules emerging for Fiat stable coins and I think by this time next year uh digital dollars like usdc and other issued uh digital Fiat stable coins will essentially be treated as uh a core part of the Global Financial system and that's an that's an extremely exciting moment and it will finally allow us to see this used by billions of people and millions of businesses around the world world uh that's amazing um one of the things uh that keeps kept that gets uh brought up bu M adoption obviously I'm a personal user of s uh usdc I get paid in usdc for all my paychecks and so thank you for that so usdc has uh had had a head start in the US obviously it's US dollar pack stable coin a lot of people are already using it early adopters and institutions uh companies that people like me who get paid in USC what kind of regions I are you looking at to see to get the most adoption I know you're doing a big Asia trip this September also headed to Singapore after uh really love to know how you're seeing the APAC region specifically and then within that region like which country or certain re uh like jurisdiction seems to be more uh taking a lead on this uh mess adoption initiative thank you yeah so you know our view is that um you know stable coins are inherently Global they have the reach of the internet and the whole power of this technology is that if you have an internet connection and you have a piece of software or Hardware connected to the internet then you can freely transact in these types of digital currency and um that kind of reach of the internet is is so important what we also know is that whether it's in uh uh trading and markets or in uh crossborder transactions or in peer-to-peer transactions digital Commerce uh digital media all these different areas um that digital dollars are are likely going to be um the most highly used uh digital currency and and so it's a very global global reach and and there's a high demand for trusted transparent uh you know digital dollars that uh that can be used so we've always looked at this as very Global and um in some ways that mirrors the existing Global reach and use of the dollar itself today um uh but I think the internet can can make that uh can change that even more now when you look at what we're doing as a company um we have a very significant focus on International growth uh around 70% of the use of usdc is outside of uh of North America and so it's already highly Global and the markets where we see the highest demand and growth are in Asia which is the largest in Latin America in Middle Eastern Africa in a lot of a lot of markets uh where the demand exists it exists because of the strength of the dollar it exists because of challenging currencies in other places but it also exists because um within the digital asset markets people need that that reliable um token I think um you know you know just as examples last week uh we announced a partnership with Marcato Pago which is part of Marcato Libre they're the Amazon of Latin America they have a company with 200 million users they're beginning to roll out usdc uh that's a really key piece you're going to see a lot more and uh from us in Latin America many Partnerships uh around that that that region you're going to see a lot more Partnerships uh coming from us here in Asia as well um we also last week had uh you know Shopify add usdc support through uh uh a payment plug-in uh today Visa announced that they're actually integrating usdc for merchant settlement uh which is a really really exciting development uh and they're using usdc on the salana blockchain to do that so we're seeing major companies with a lot of different areas of focus um for Asia specifically though it is the single largest uh investment area for Circle uh I think we have around 120 employees in Asia today we have uh big investments in engineering product uh go to market uh policy regulatory we have a uh headquarters for Asia in Singapore uh we're open opening up more branches uh and so we we view Asia as probably the largest uh and and most important overall growth Market uh so there's a lot to do here um and uh we're we're very you know we're very excited because we're seeing you know for example in in Singapore in in Hong Kong in Japan just three examples recently very clear stable coin policies uh and of course some some may be aware that uh we recently became a uh a major payments institution uh which is a very uh significant level of of regul Regulation over our uh our digital currency activity out of Singapore uh and um you know so there's a a lot we're doing here uh here in Asia and we see opportunities uh to partner with top companies in the region in many different vertical uh both existing kind of crypto industry but also more and more we're forging Partnerships with large Commerce companies uh with large internet companies with other Financial uh companies uh and so the partnership opportunities uh here are are immense to your last point is there a specific vertical within all all across this industry that has have the most um Innovative attitude to adopt this technology or is it would you say broadly speaking everyone is open to just just to experiment well we're seeing um you know a lot of companies that have a consumer franchise that is that is you know an internet-based consumer franchise want to build web 3 native capabilities into their products and so that could be in the gaming industry that could be in in in consumer uh uh kind of super app type uh you know products messaging uh Commerce you know so consumer facing companies uh clearly seeing that digital tokens are a new building block uh those digital tokens whether they're non-f fungible tokens or stable coins or uh other types of of tokens that are issued are going to be a part of how if you're building a a highly engaged uh consumer base you're going to use that technology uh and so that's a that's an area we see a lot of activity that includes of course you know any kind of fintech a lot of the consumer fintechs uh throughout the region need to web three enable their own products and services most fintech products are you know have historically been what I call lipstick on a pig meaning they're kind of user interfaces on the Legacy world now everyone wants to implement and integrate to the more open more internet native more modern uh public uh chain infrastructure which is clearly the foundation of the future of the of the financial system this new internet Financial system on the scalability side of things for Mass adoption um as more chains on the tech te side on the infra side more chains come about more uh like main nets come about how how does uh usdc and a circle uh plan to support all these chains or is there certain framework do you guys stick to to evaluate where to integrate which uh for example this x company would benefit from certain main net over others yeah yeah so um we want to make sure that um usdc is has the broadest reach in the world as a digital dollar and we want to make sure that if there are platforms that need digital dollars where there are developers that are active and building on those platforms we want to make sure that usdc is available to them and uh and so we have a a a big initiative I call it an omni chain uh approach uh which is sort of evolving from a multi-chain to an omni chain approach um some of you may have seen uh we just announced usdc is coming to six more chains in the last 24 hours uh we went live with usdc on on base and on optimism we recently launched on arbitrum um and there there are many more coming now we focus on um layer ones and layer twos that have uh either significant technical Innovation or very clear uh developer activity and traction um and you know we natively issue usdc on those because it's very very important that we avoid wrapped assets uh wrapped assets that are dependent on Bridges create huge uh security risks vulnerabilities Capital inefficiency uh confusion for users investor protection issues very dangerous in my view uh that's why we also built and launched this year the cross chain transfer protocol cctp cctp enables native to Native teleporting of usdc across layer ones and layer twos and we are bringing that to almost every uh chain that we operate on it allows a user or a wallet developer or an app developer to allow the movement of usdc say from you know arbitrum here to Avalanche there to ethereum and then to other chains uh as well and it literally will burn usdc natively on one chain and then enable the minting of the usdc on the other chain so there's no locked asset there's no dependency on a third party bridge and so it's a very powerful protocol cctp is really critical and all of this is aimed at the overall goal of how can we make the the user experience of using digital dollars as simple and seamless as possible users should not need to know what chain am I using they shouldn't need to care users should not need to know uh what gas fee is or or or why it even exists they should never need to hold commodity tokens to have to pay gas fees they should use usdc for gas fee pay and we need you user interfaces ux to abstract that away so we're solving all of those problems and we're trying to make those available as well through our own developer platforms that allow people who want to build web3 Tech into their own consumer applications to do that in a self-service way very very easily using our programmable wallets wallet as a service product and and and that's sort of part of a our broader web three services stack uh which we've recently rolled out um speaking of the Omni chain world and also the broader adoption of usdc this is actually one of the questions that a lot of attendees has question for let's say um each country adopts uh through Circle their own digital fiat currency on the foreign exchange side of things how would usdc interact with those native digital Fiat currencies and how how do we plan to navigate potential Like rules around it I'm sure I know I know you're working closely with The Regulators a lot of of uh details that sort needs to be sort sorted out in order to support that uh crossb transaction and swaps it's a huge opportunity I mean clearly um if you have a capital Market that exists that can operate at internet speed and internet scale that's always on 247 365 which is exactly what digital asset markets are today whether it's a centralized exchange or decentralized exchange protocol we have now through that uh through that world through the digital asset exchange world uh we we now have I believe Capital Market infrastructure Which is far superior to Legacy Capital Market infrastructure in many respects once we have you know dozens and then eventually you know many dozens of uh high quality digital stable coins Fiat stable coins that are issued under consistent regulatory treatment uh so that users of those can know them and trust them I believe that onchain FX markets are going to be a huge huge space and that we will have the most efficient clearing and settlement of FX that we've ever had and it will be a programmable composable building block to anyone any business any application developer that needs to transact and so that should just become as seamless and transparent uh as you know how we you know transfer different photos between different photo platforms right so money will cross I think you'll get to very very efficient um you know uh digital asset markets for those different digital Fiat tokens we want to play a really important role in fostering that and supporting that growth um that will take time but we believe it's going to be a a very big category of uh of activity over the next 5 years um specifically speaking um I've been hearing a lot of excitement within Korea as well for adopting um Sable coin and Al also uh taking a huge initiative on taking this technology and make making something happened out of it and is there a specific goal or Mission that you're looking to achieve while you're visiting Korea and especially uh just throughout this week at KBW is a specific Insight you want to take from uh visiting Soul sure well it's it's it's just it's always a privilege to be able to meet with um leading developers and investors and um and exchanges and uh consumer companies so for me personally just really trying to connect with as many uh participants in the ecosystem as possible um is is is very important I think um you know I'm very aware of the fact that um you know Korea has gone through different cycles of interest and dismay around this industry like a lot of other parts of the world um but it's a really important time here because we know that regulation will come and there's a there's a real opportunity to get it right in some ways if if Korea ends up building uh regulation around digital assets and maybe the laws come a little bit after some other markets uh that will actually give Korea an opportunity to learn from what other people are doing and get it right and so Korea has historically been one of the most Innovative Technology Centers in the world one of the most Innovative markets for Consumer consumer internet in in in Commerce and so I my expectation is that uh coming through this and coming through 2024 after the election and after regulations come that Korea is is set up to be a huge huge player in the global space so I'm hoping to you know have Circle be able to be uh a partner to the leading companies here uh as they work on this and you know we provide open technology like usdc uh we provide open technology with like our web three services stack so there's opportunities for us to collaborate with with companies today um and then and then eventually see uh whether you know uh there there you know new stable coin issuing opportunities here in the future uh on that note um I think anyone who believes in our industry in digital currency is uh by default bullish on stable coins and having that being adopted throughout different verticals and industries as is there looking at 10 years on the line is there specific milest Stone you want to achieve with circle or uh with stable coin adoption in bro in a broader sense well 10 years is a long time although we've done 10 years already I I would say um you know when we started the company 10 years ago the the first idea is that there could be a protocol for uh like an open protocol for dollars on the internet that could bring the cost of transacting to as close to zero as possible and that would be open and accessible to any any uh you know software and Hardware on the internet and 10 years in I think we're almost there so we're really close to I think achieving the 1.0 the 1.0 vision of the company and so it's it's sort of timely to think about the next 10 years and we always thought about the second 10 years of circle and the 2.0 as really being about the unleashing of innovation that comes from essentially having a Ubi ious uh uh you know programmable dollar and programmable Fiat um but really The Innovation being what happens when you can program money so for us uh in the next 10 years my own belief is that the nature of Commerce itself and the way in which financial services are expressed and rendered and delivered will change pretty radically um and I I think the next 10 years really does have a have a chance to be uh something where you know an internet Financial system achieves you know true internet scale uh and that the developers and creators and entrepreneurs are able to invent things applications of money that just have never been possible before and we can't even think about what those are today just like you know when the iPhone came out we couldn't actually imagine all the things that people would invent through mobile um there was a lot of ideas but no one really knew how how uh Innovative and inventive developers would be and I think we're at the very beginning of that with programmable money and so in 10 years um I think the the very nature of of of of Commerce of the way uh people work the way that corporations function the way that uh the financial system operates it will look quite different in in this internet Financial system uh just to wrap up um most people don't know about this Jeremy but he has been a SE entrepreneur you have built multiple companies before Circle there are a lot of developers and entrepreneurs and students here is there any advice as they uh going about their mission to build their own companies to uh stick around through tough times and build something great like what you did yeah I mean there's a lot of advice I could give I would say um you know uh things are not not easy uh you go through many Peaks and valleys uh you suffer many failures and that's great uh it's actually really good to to to to to try and fail and to iterate I think the important thing is to uh maintain very high conviction very strong belief um that's that's really the most essential essential thing The Bravery courage and strong conviction are the most important things to to both lead to help motivate people and to deal with the challenges that of course will arise uh with that um we want to thank Jeremy for showing up early in the morning and coming all the way to Korea and hope you guys have a great day and thank you so much for everyone for coming today thank [Applause] you