Stripe broke the internet when they spent $1.1bn for Bridge. But this was a small part of a bigger master plan. In this Exclusive Tokenized Interview, President of Stripe Will Gaybrick takes us behind the scenes... 🧵
Stripe broke the internet when they spent $1.1bn for Bridge.
But this was a small part of a bigger master plan.
In this Exclusive Tokenized Interview, President of Stripe Will Gaybrick takes us behind the scenes... 🧵
Timestamps:
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This episode is brought to you by Visa
A world leader in digital payments, Visa is bridging the gap between traditional financial institutions and innovative blockchain networks, helping players in the payments ecosystem navigate the ever-evolving world of tokenized fiat currencies with confidence and ease. Learn more at visa.com/crypto.
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We’d also like to remind you that the views or opinions of our contributors today are their own and do not necessarily reflect those of the companies they are representing. Nothing we say should be taken as tax, financial, investment or legal advice, do your own research!
Music by Henry McLean
Speaker 1 Â 00:00
Simon
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Sy Taylor  00:10
Taylor, welcome to tokenoist, the show focused on stable coins and the institutional adoption of real world assets. My name is Simon Taylor. I am your host for today, author of FinTech, brain food and head of strategy over at sardine, joining me today is the most special guest I can imagine. Interviewing in person is the one and only will gaybrick and you are president of product and business over at stripe. How you doing? Will doing great. Thanks for having me. Really excited to have you. Of course, before we do get into the show, we're happy to remind you that this podcast is made possible by our good friends at visa. And I do need to remind everybody that views and opinions are their own and might not reflect those of their companies, although I suspect that might be not always the case for everybody. All right. Well, let's get into this. Tell me the story of where you discover stablecoins personally and at stripe, because I've heard podcast interviews with you before, people were talking about stablecoins And you were talking about them. So contextualize that and contextualize that to your day job.
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Will Gaybrick  01:14
Well, I think first heard about stablecoins relatively early. I think usdt on Bitcoin was something like 2014 and I think a personal thesis I had, which I think is shared by a lot of people at stripe and in general, was that eventually the killer app for crypto would be just money. And Bitcoin has served that pretty well from the standpoint of store value, but it's been more sort of financial asset, as opposed to an actual sort of medium of exchange. So that's why I sort of saw that happening with tether all the way back then, and thought, huh, that's interesting bringing actual fiat currency on chain and giving it sort of the superpowers that crypto has, and permissionless performant now programmable, maybe the one we think about the most at stripe. And then we really started to get excited at stripe. Was actually early 2020s we started seeing the L twos taking off, and then just the writing was on the wall, you know, Solana getting wings. And once you could see that the performance would asymptote to sort of where it is today, I think it better and better, you know, where you can process transactions for less than a cent, and in less than a second, suddenly you've got just a better dollar, better Euro. So on,
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Sy Taylor  02:28
you end up in this place where you're seeing a better dollar, a better euro, but you're also seeing the existing dollar, an existing Euro. So what are the problems with the fiat system that you see? Because I always thought that the superpower of stripe was making payments work the way a developer thinks that they should work, but they actually don't. What are some of those gnarly problems that people deal with, and how does stablecoins actually solve those? Yeah,
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Will Gaybrick  02:52
well, maybe it's not surprising, but we think a lot about the future of money at stripe, and our mission is to increase the GDP on the internet. And, you know, just from a mathematical standpoint, you know, GDP is directly proportional to the velocity of money. So we've always been obsessed with just like, how quickly we can get money to move. And so you sometimes hear stablecoins described as, like, digital dollars or digital euros or whatever. In fact, like, money has been pretty digital for a while. Thanks to the sponsor, as you noted, Visa and MasterCard and others, they've really done a great job of digitalizing funds. But the reason why I think that's a bit of a misnomer is it doesn't go far enough, right? It's digital, programmable dollars in an open ecosystem, and so your balance at Barclays, for example, is already digital, but it's an entry in a database that developers don't have access to that is governed by sort of old code, probably in some mainframe somewhere, not to pick on Barclays, just generally how banking infrastructure works. Suddenly, you tokenize that asset, you bring it on chain, and you now have hordes of talented developers with this new stablecoin platform who can make it move faster, across borders, can give it all sorts of properties that you want to around your balance goes this high, maybe you want to stake it here, because, you know, you only need this much of it liquid, and you want to earn higher yield on this front, you know, actually, I was thinking about this from the standpoint of applications that, you know, we've seen built in FinTech, the acorns of the world, you know, all of the asset management platforms and all of that could be happening on chain so much more quickly than it has happened off chain, because you have to find a way to sort of yank this data out of banks and deal with all of the intricacies and inconsistencies across them. I
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Sy Taylor  04:36
think that inconsistencies thing is not something that can be adequately explained unless you've lived it, and I suspect stripe engineers have lived it more than others. But you probably get this question a lot when people go, Yeah, but I have instant and 24/7, now, and I can program payments now, and I can have you given up trying to convince skeptics, or are you still very much of the view that enterprises are waking up and there's an education job to. Do here?
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Will Gaybrick  05:00
Yeah. I mean, look, we're kind of boring infrastructure guys to some extent. And so you know what? What is most exciting to us is just at a base level, it's just a better technology. And Chris Dixon has this line that I like, I think it was in his book, I can't remember, but then thinking it for a long time, which is that crypto solves not only technological problems, but also political problems. And the political problems being, how can you get everybody to agree on things working a certain way? Yeah, so you could say, hey, well, you know, pix or UPI have worked really well in Brazil and India. You know, these are, broadly, from a performance standpoint, better payment schemes than we have in the US, lower cost, instant movement of funds, and they're sort of universally adopted in those markets. But as soon as you go across border, you have literally these Geopolitical Problems. And you know, I think if you were to say, hey, India, actually, we're gonna go with picks. So you guys need to rebase on that. I don't think you'd get a lot of uptake from other countries. And so having this consistent, globally programmable platform just unlocks an incredible amount of potential, and its abilities exist a layer above all the localized schemes, allows developers to not even have to think about those.
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Sy Taylor  06:16
Yeah, stablecoins are a platform. Has been a narrative I've been playing in FinTech brain food for a while, and I think it's one that's resonating with people, because, I mean, India has tried to export UPI to many markets. Brazil has tried to export picks to many markets. And it doesn't always fit where it doesn't have that local sort of acceptance. But there was this line that Patrick came out with, I think, right around the acquisition of this little company called Bridge. I don't know if you remember that. I want you to take me inside of that acquisition in a second, but this line is, stablecoins are room temperature superconductors for Financial Services. I'm still trying to unpack what that means. Did that make sense to you? Is that something you guys have used
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Will Gaybrick  06:55
before? Yeah, we've used it a bit internally, and I think maybe just well, so superconductors incredibly high performant, sort of broadly, can conduct electrons with no resistance. The issue is you have to cool them to extremely low temperatures so they become sort of impractical from a daily use case standpoint. And I think what that line is getting at is that we're almost shocked by how performant stable coins are. Like who knew money could work this way? This is sort of amazing.
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Sy Taylor  07:24
Well, you guys had some fairly big numbers in the last stripe sessions. I think you overlaid the stripe growth rate with stablecoin growth rate. Could you just take me inside what that is and what the genuine observation is, because part of the management team at stripe you obviously signed off on this acquisition, hoping it would do well, but what's been the surprise and what have the numbers look like?
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Will Gaybrick  07:45
Yeah, from the standpoint of the acquisition, we met the bridge team maybe 18 months ago, and what we realized over time, you know, in addition just realizing that they were extremely good, was that our roadmap was pretty convergent, but that they seemed to be executing at a pace that could accelerate us, and they had a really similar mindset around stable coins as infrastructure. I think there's sort of two mental models. There's one which is that the fiat system and the sort of crypto stable coin system will exist in parallel. And that is not our belief. Our belief is that they'll be sort of deeply interwoven to move, you know, in and out of each of them on an ongoing basis. And so, you know, bridge, you know, their name is sort of that stitching between them. I think what we're seeing with them, I mean, so we showed a chart at sessions, which is stripes, hockey stick growth in the first two years of payments process. Then we overlaid bridges. And, you know, stripes, volume nearly disappears on the chart, and I think it highlights that in this sort of familiar framework of building products that are medicine, not vitamin, we were building a better way to accept payments, and people needed to accept payments. And back in 2011 it was a real pain point for developers, but you could get up and running bridge is helping entrepreneurs and developers solve problems that are otherwise just completely intractable. So they are antibiotics in the late, late 1920s you know, they're sort of actual newly discovered lifesavers. And you see that in the numbers, and it's just staggering.
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Sy Taylor  09:15
I think what's fascinating to me about that is, as I look at it from a strategy standpoint, people have now started to understand that it opens up markets that were not available before. Has it done that for you guys as well? Because I think there is no truly global payments company. I mean, as big as our sponsor visa is, as big as Alipay is, they're all regional. Do stablecoins form a part of your desire to expand internationally?
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Will Gaybrick  09:39
Absolutely. Yep, there's maybe three examples that come to mind. First is we recently launched, we call stablecoin financial accounts, and these are rolling out now, but will soon be supported in over 100 countries, at least 101 countries. There's sort of some questions of reverse solicitation. And as you know, we can get into this, but stablecoin, right? Regulation still settling, but we feel confident in those 101 and these accounts just let you hold stable coins, receive them from third parties, and pay them out in Fiat or in stable coin balances. And actually interesting story, as mentioned earlier, we think a lot about the future of money. At stripe, leading up to sessions, we had this really lively, even heated debate about how to position the balances in those accounts. So you're giving someone in Argentina, maybe that's not the best example, because stablecoins are so well known there. But you know, you're giving someone in, say, Guatemala, I don't know just how well known they are. There a USD balance. And technically that USD balance is tokenized on a chain, and technically at launch for us, it's USDC. And there's a question of like, do you show the actual coin? Do you show the coin in the chain? Do you show digital dollars? Do you show just dollars? Because the end value prop to the holder of that balance is simply, I'm in USD, and I want to be in USD. And so we eventually landed on showing the actual currency, but not the chain in particular, because our API sort of reveals the currency. So if you're gonna just be consistent between the dashboard and API, but this ability for stripe to allow users to hold USDC balances across 101, countries something that would take us many years to get to. Otherwise, yeah,
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Sy Taylor  11:19
I can see that you said one of the three products. Say the other two. And then I have a follow up on your point.
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Will Gaybrick  11:25
Sure. I'll go fast. Another, which I think you've talked about before on the show, is Visa cards to spend down stablecoin balances, leaving 12 markets, 12 markets today, but that'll be growing quickly. We're just working on some of the compliance rollouts. And then the third one is stablecoin payouts, and just allowing platforms like AX creator platforms to send funds to far more than 101 markets actually don't know the current count, but is far above that. Actually, maybe the last one, which we're seeing an increasing uptick of, with digital services growing with AI companies, is accepting stablecoin pans, and
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Sy Taylor  11:59
that's one I wanna double click on. And I do have a sort of a compliance jurisdictional question that I don't want to lose, but the accepting stablecoin payments for AI companies, I think there was some chart you guys showed where 70 some odd percent of the big AI companies use stripe by default. You sort of index to Silicon Valley mafia. So you tend to get the next big thing, which has played out really well for you guys. But that product might not be available to a lot of the global south unless there's some way to pay for that product.
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Will Gaybrick  12:29
Exactly. Yeah. And I think I will say just, you know, we're sitting here in the UK. I'll say it's not just Silicon Valley mafia. We've got, I was in Germany yesterday. We had deep L in Germany for translation. Of course, 11 labs here. We got lovable and Stockholm, you know, there's some big, big AI companies coming out in Europe, which I think is really exciting. And you're right, you know, actually, in fact, 78% of the Fords, ai 50 on stripe. But actually, that 78% is 100% of the companies accept online payments. So very good about that penetration today. We wanna keep it up. And as you note, these companies want to sell chatgpt or Claude or translation services to every market in the world. So you know, deep bell I was just mentioning sells into over 200 countries and territories on stripe, and that's supported actually pretty well today by cards and the 120 130 odd payment methods on stripe. The really promising thing about stablecoin pans is that in a lot of these emerging markets, even if they do have a way to pay today, consumers are commonly holding stablecoins, and they're used to transacting in them, and so they're very happy to pay for digital services in stablecoins. And in a lot of cases, that's not just faster, but also cheaper.
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Sy Taylor  13:38
So that brings me to my jurisdictional question, are you not concerned about on some level, some local markets not wanting the dollarization of their economy. There are some markets that may be more pro that. There are other markets where that might be something they choose to fight against. I guess you can be sort of philosophical on that. But how much of a concern is that and how much of a concern should it
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Will Gaybrick  14:00
be? I can't say I'm sort of the geopolitical expert to have a really cogent answer on that, but I'll say it does seem broadly like countries and regions do care about their currencies, and there's a lot of countries that care to control their currencies, and so I think it will not be lost on them that putting currencies on chain changes things a lot. One thing that I've been thinking a lot about is, did digital Euro. And I think the ECB is coming with a digital Euro. I guess circle now has ERC. Some people actually are claiming that a Euro backed stablecoin will be structurally harder to build a business around than an USDC or usdt, because debt in Europe is not mutualized. It isn't an analog to the US Treasury, but broadly, just again, zooming out to the technological lens on it. These currencies should be on chain. They're just going to be more performant. They're going to move faster and move more cheaply. They're gonna move 24/7, there was
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Sy Taylor  14:58
a bank in Brazil that I think has started. Are backing. It's bringing its deposit so deposit tokens on chain so that you can do on chain FX, and the beginnings of on chain FX are going towards the global south. So I suspect you may be right. It's a matter of time, and people will see the opportunity. So I do think about also those another acquisition you made privy quite recently that you've announced. And I know there's probably some ways to go before that's fully closed. But talk to me about the Privy team and the role of wallets within this ecosystem. Where do you see what they do fitting in the ecosystem? Yeah, one
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Will Gaybrick  15:29
way to think about where we are in the sort of evolution of stablecoins, not say crypto more broadly, but stablecoins has a particular focus right here, is, yes, we're early in the adoption curve, but also early in the product development curve. And you look at the boom in internet applications after the likes of AWS showed up and scaled and the tools for developers to build crypto applications have been sort of sub par. They haven't lived up to the standards that you'd expect in web two Exactly. Yeah. So then that means that the consumer experience for these applications is broadly based in browser plugins, seed phrases, the types of things that consumers never want to think about and probably don't understand. And so just an essential part of the picture of building a great stablecoin based application is wallets. And so we think privy can really sort of be a coefficient, if not sort of an exponent, on the growth rates of stablecoin application development.
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Sy Taylor  16:30
Yeah, the self hosted wallets are in particular interesting because you are then your own bank. But then there are some models in between that and as a business, there are some economics that benefit as well. And
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Will Gaybrick  16:41
wallets are fascinating, because the key part of the Privy thesis, actually, is they built a non custodial wallet, yes, meaning that they're actually on chain, and it's
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Sy Taylor  16:51
not held by somebody else on your behalf. The UX over the front, it's like you're holding that directly on chain, and privy is just providing you the software to be able to manage that exactly. And to your point, a moment ago, doing that with some of the wallets, historically, was like using your elbows. It was a little
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Will Gaybrick  17:09
Exactly. And being on chain is actually pretty important, and it creates some very deep questions. You know, the other day, I was actually talking to CFO of a very big and serious company, and he's very enthusiastic about the Treasury utility of a stable coins. He operates a ton of subsidiaries, a ton of different bank accounts in a ton of different currencies, and really only wants a couple of major liquidity pools for his company. So now he's actually spun up on chain wallets in each of those countries. There isn't actually a legal framework for who owns an on chain wallet, ownership is just sort of by ownership of the private keys, so to speak. But he and his compliance team have decided that, you know, we're going to make sure that private keys are segregated off and only officers of each of these subsidiaries have access to them. And so it was once a process of slowly moving currencies back to these central liquidity pools via the particular Treasury routes required by this tax structure is just instantaneously moving money from crypto wallet to crypto wallet through the entities and he which, if
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Sy Taylor  18:10
you think about it like as cash, that can teleport, then it starts to make a lot of sense. I could legally have piles of cash in dollars in all of those markets, and the problem was moving them around. I can legally move them through the banking system. The problem is moving them around. If somebody gives me this teleport button, that cash is a bearer instrument, but now I've got a teleport button that moves it anywhere I want. We had the Chief Revenue Officer of D local on a an episode recently. Apparently, they've been doing that use case for the past four years. Yeah, because they had so many stocks of currency, different markets where it was building up that the Treasury use case is one that people are waking up to, but some people have been quietly doing it for a while. But I was actually going to ask you, what are your thoughts on everyone issuing their own stablecoin? We saw headlines about Walmart and Amazon doing their own famously MercadoLibre has had its own for a few years. Is this a rational thing or are we just sort of in that nobody really knows, so you might as well hedge your bets. Phase,
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Will Gaybrick  19:06
probably a bit of both. And I think with major technological shifts near sort of often overhyped in the near term and under hyped in the long term. Yeah, you're probably seeing some of that right now. But I'd say my sort of pithiest framework would be, if you were in the business of holding money on others' behalfs, it probably makes sense for you to have your own stablecoin. If you are a bank, for example, it probably does make sense for you to have your own stablecoin, I think, for two reasons. One is, you can improve your product by putting it on chain like your product is, I hold money, and they hold money for you on chain, and that money is better. Money can now be moved more
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Sy Taylor  19:46
quickly, instantly, in 24/7, globally,
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Will Gaybrick  19:49
yeah, it can be staked, right? There's so many things that it can do and it can, you know, we'll see how this plays out exactly, but I believe over time, it'll be able to earn yield more effectively, a lot of money. That's held in checking accounts today doesn't earn any yield. And so one of the things we've always been very excited about at stripe is the potential for stablecoins to democratize, not just access to USD and major reserve currencies, but also to the risk free rate. And so putting it on chain make it a better product. And the second reason is, I think looking a few years out, if you're not tokenizing your balances as a bank, then you're really at risk of losing summary deposits. Consumers will increasingly sort of feel like they have their bank accounts, and maybe that on chain balances are a parallel bank account, and I think you may see a lot of shift from the bank account to the on chain bank account if the actual sort of funds you're holding on behalf of consumers aren't on chain themselves. So if you're holding funds, you should probably have your own stable coin. It does introduce some interesting compliance questions. I'm sure you've thought a lot about, which is, you know, if there's say, jpmd, you know, a sort of jpm dollar on chain. If that's an open loop stable coin, and it can sort of trade really, then it's less well defined. Like, what does it mean to be a jpm depositor? Suddenly, these jpm stable coins that sort of represent jpm balances, will end up in hands that jpm probably doesn't want them to end up in. So there's some real question there, of like, are they closed loop or open loop stable coins? But surely I think they'll be on chain in some way. And then for the major retailers, you know, one of the early use cases that has worked well for crypto has been creating rewards programs, yeah, and, you know, a lot of major retailers want you living with balances in their applications. You know, Starbucks has done this famously Well, you know, I certainly think that if you were to say, hey, store money in Amazon or in Walmart, and by the way, at any time, you can eject into USDC or otherwise in a completely liquid way. I think as a consumer, I'd probably be more willing to
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Sy Taylor  21:48
do that. Yeah, the problem with the Starbucks ecosystem is it's closed and it's also based on prepaid, which means you've got all of these costs that people don't think about in prepaid, like a Cheeseman and just like, oh, it's it's complex, and then, I mean, you were as briefly CFO of stripe, I believe then you've got to think about, is it an asset or a liability, and how do I account for all of this stuff? It's like, actually, really, really complex. So it's a difficult one to manage. And I think it's non trivial. I
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Will Gaybrick  22:16
think the thing that this risks is us as an ecosystem, sort of perpetuating some of the sins of the present, around extreme fragmentation of payment methods, of payment schemes, and otherwise, you know, we already have two dominant, USD backed coins and usdt, USDC together, I think, represents something like 99% of stable coins, but now they're on a bunch of different chains. Yeah. And so you already have challenges where there's, like, insufficient liquidity between coins and chains that if you introduce dozens of additional open loop coins, is something that combinatorics there get really, really bad. And, you know, I sort of picturing in my mind these sort of striped sessions of 2030 slide one, here's the 200 payment methods we accept. And slide two, here's the 200 stable coins we accept. And I think that's the world we don't want to be in.
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Sy Taylor  23:04
Yeah, you recreate the maze. I wonder, when is it $1 when is it a coin that's represented as $1 and what's the difference between those two things? Is very difficult, because you're sort of asking consumers and businesses to think about the credit risk of the issuers and the utility of the coin in a way that they haven't had to before. It's a really fascinating challenge. Coming back to the thing on JP Morgan coin, I believe, and I understand it's quite closed loop in its first implementation, but this sort of closed on top of open prompts the question, how do you go from closed to open? And that feels like an unsolved space to kind of really delve into. I don't know if it's an area that bridge or privy are putting thoughts into today, or it's an area you've explored, or it's just a concern you have at this stage.
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Will Gaybrick  23:50
Yeah, I think we see a future where there's probably somewhere between five and 15, I would suspect probably closer to five, highly liquid, open loop points and bridge helps does many things for its customers, but one of them is it helps them issue their own stable coins. So we announced recently that we're doing this with phantom that's going to be a closed loop phantom coin on top of open loop usdb coin, and so it will function as open loop, but it'll be a phantom branded coin that will trade in a liquid way on the usdb coin.
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Sy Taylor  24:23
Interesting. So what's the utility to a phantom there and then extend that metaphor to a corporate treasurer,
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Will Gaybrick  24:31
for instance. So for a phantom, you can settle into their own coin, then they can sort of decide what they want to do with the yield, which, right? Okay, you know lots of speculation about how that will play out with circle genius act seems to be indicating that paying yield through to consumers is not something we're all ready for yet. I think maybe there's some shades of the bank lobby getting involved there, but I think for a corporate treasurer, I don't know to what extent they. Need to worry about how many open coins there are, so long as like spreads are tight and there's sufficient liquidity on a small
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Sy Taylor  25:07
handful of them, and the 24/7 instantly tradable for tokenized treasuries, and we saw Robin Hood's announced tokenized stocks now, so if I have that utility to swap between them, it's almost like having the stablecoin that doesn't deliver yield as checking and the tokenized money market fund is my deposit rate with yield, and I can almost draw down and swap out of the money market fund the moment I click Pay, because it's programmable. But in that world where all of this is buildable as software and automated, like, what do I need stripe for? What are you thinking about your role in the future? Yeah,
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Will Gaybrick  25:46
you know, it's an interesting question, because you're seeing these two really interesting phenomenons, phenomena we hit on one already, which is the proliferation of coins. The other is, suddenly everyone wants to be the acceptance network for state of mind. So, yes, you know, Visa has come out said, you know, we want to be the acceptance network for stable coins. I guess circle has just announced the circle payment network. Yeah, we don't believe there should be an acceptance network for stable coins. The state of the world today where you have two very, very dominant networks, you know, I want to give Visa and MasterCard and others a lot of credit because they've built great products. We're very happy to be very happy to be their partners. And yet, you know, I think, in a world where there was a bit more competition around how money moved, it would probably actually move more efficiently,
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Sy Taylor  26:30
yeah, I was thinking about more velocity, which would grow the GDP of the internet, yeah.
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Will Gaybrick  26:34
And even just, you know, the programmable point, or the pluggable point Bank of America card, I think, or Bank of America, Card from Bank of America, I think it was 1958 when it was, you know, first created. It wasn't until 1974 that disputes were introduced to the spec. And I think probably anyone involved with any company thinking about credit card disputes and card disputes generally, would say, we haven't really gotten that right. That's not part of the scheme that we're super proud of. And so you can imagine a world where you have no monolithic choke points in how money moves, or clearing houses and how money moves. That gives rise to a lot of unbundling of the sort of payments acceptance stack. So one thought experiment that we've done is, go to sleep tonight, you wake up tomorrow and instead of having cards branded with the small number of network names, your cards are sort of NFC to public key addresses on blockchains. And would the payments world be better or worse in that world, maybe a lot of people in the crypto world and maybe a lot of merchants who are frustrated by like, high payments costs would sort of jump to say, like, better, better, better. I think the answer is, sort of, in the immediate term, worse, but probably eventually better. Yeah, and the eventually better is you can allow for each part of the value chain. It's a pretty thick value chain, you know, fraud mitigation, navigating disputes, of course, like regulatory burden and everything like that. Integration with banks, you can allow each of them to be sort of competed for, and you can make sure that the economics are accruing to the parts of the stack that sort of creating the most value. And so from our standpoint, we are not used to having any sense of networked market power. We're used to earning it on being the best developer experience, the most reliable infrastructure, the most secure. And so as we look forward thinking about wallets, and wallets as a core part of developer infrastructure, bridge, bridge and stable coins as a sort of core platform developers to build new financial experiences. We always get excited, and we say we're gonna give developers great platforms and great tooling, and then they're gonna surprise us by what
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Sy Taylor  28:47
they build. Yeah, it's kind of, you can stay agnostic, so long as that's the North Star. Yeah, it kind of gives you a lot of space to play and think a little bit differently. I'm interested what opportunities you see that you think people are not seeing or missing that we haven't discussed so far. What have I not asked you that I probably should have done? Well,
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Will Gaybrick  29:07
I think people really underestimate the programmability side of things. And I'm not saying you are, but, but, you know, it's, it's, there's the old, old Larry Lessig code. Code is law concept from 1999 where, you know, he was sort of saying, you know, as the internet takes off, so much of how we live our lives and the incentives we receive, what we can and can't do is going to live on these private servers, and it's gonna be sequestered away from from all of us, and we're gonna be coerced and forbidden in all these different ways. And so we have to, like, really start to take that very seriously. One of the super neat things about crypto is you can actually go read the law. So I was the other day after Coinbase Shopify and Stripe announced auth and capture for stablecoin pans on Shopify.
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Sy Taylor  29:52
Fascinating, by the way, as you think about what the future of on chain disputes and chargebacks that. A really interesting model,
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Will Gaybrick  30:01
absolutely, yeah, and you can just go read the smart contract, you know, 0x EDB, I don't remember the addresses, but, you know, it's a 200 something lines of code, and you can read exactly how often capture are implemented. And the really cool thing about that is, if you don't like it, you can fork it, you could build it a different way, right? And so crypto as a sort of community, has always had this ethos of being its own watchdog and sort of keeping an eye out for abuse of the crypto community and lots of abuse around sort of speculation and tokens scatter overpriced and so on. But there is also this ethos of, it's kind of like an open source ethos of building it the right way, right? You think about, say, like optimistic roll ups, like the, just the construct there of, we're going to assume that all these transactions are correct, but we have validators and invalidators, and that's
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Sy Taylor  30:56
and we create an economic incentive with game theory so that these mutually untrusting actors can come to consensus about the state of the network, which seems a very useful thing given the state of the world at the moment that may not have seemed useful maybe a decade ago, where surely the obvious answer was to centralize everything, and if we could just build the one centralized server to rule them all, then we'd solve all problems, which is kind of as they gonna Say.
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Will Gaybrick  31:20
Yeah. So I think we're given to believe from that centralization mindset that often capture is now solved in crypto when I don't know, will it be 10s, hundreds, 1000s of different implementations of scheme like behaviors like that.
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Sy Taylor  31:36
It's interesting. Front of the show, Rob haddock has a line that stablecoins are collapsing and remaking the value chain of payments quite dramatically. So I do think it's simultaneously the most exciting time and the most threatening time. What have you learned in building products like billing, building some of the radar, all of the other products that you think are lessons we should take in? Because I I do think there's two types of people. There are people who say, Oh, well, you've not got the experience I have in payments. Therefore you don't know about all these problems, or stable coins are just going to make everything. But actually, I think there are some day walkers in the middle. What is useful? What should we keep about the existing
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Will Gaybrick  32:12
system? I think one thing that's really interesting about crypto protocols is that they're stateful, right? And so you think about like HTTP or SMTP, or a lot of the early Internet protocols are not stateful. And as more and more economic activity comes on chain, and as on chain, transactions are bigger, they're a part of payments, risk management is going to have to sort of reinvent itself a bit. And so I think we're going to have to get really, really good at we'll see how verifying identity works. Because privacy on chain, I think, is a big deal as well, but at least detecting bad actors, and I think we're seeing on the AI side of things, that just vectorizing more features and looking at simpler models with less structure in higher dimensional spaces is very, very powerful. And so I think the idea that you've got so many transactions with so much data on chain, actually, I think in the long run, maybe means that it would be a lot better place to mitigate risk. But in the near term, I think there's a lot that we need to learn, just as
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Sy Taylor  33:17
I think John Connors and said it really well, which is, stablecoins are like the money 2020, conference of payments. There's a serious payments conference, but you gotta walk through the casino to get to it. And I thought that was the perfect metaphor. And I get asked a lot, why did you join sardine? And my hypothesis at the time was, eventually the bottleneck is gonna be compliance and fraud and risk. So why not go work with the guy who had to solve this at Coinbase, then at Revolut and then elsewhere, because that will ultimately become the bottleneck. So I completely agree with you, and I guess you are operating a very large, global, regulated business. What are you guys doing to keep yourselves the right side of that as you look into the next couple of years, you
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Will Gaybrick  33:59
mentioned that I was a CFO of stripe for a while. This is my first four and a half years or so. And Robin Vince, CEO of BNY Mellon, was, at that point during that tenure, the chief risk officer at Goldman Sachs. He's always been a friend and a bit of a mentor. I remember asking him, when I was ramping up on the job, what's most important for me as CFO in particular, at stripe. And he said, Stripe must be conspicuously good at risk management. You must be known as being sort of conspicuously compliant, conspicuously good at risk management. And so that has been something that we've always taken really, really seriously. And so we're very enthusiastic about a lot of the clarity that we're getting. You know, with the genius act, maybe soon with clarity act as well clarity. Act Yes. We'll see that one's a bit earlier on. And even just, you know, clarity that Micah is providing, whatever your stance on it is, it's almost like the best answer is yes, the second worst answer is no, and the worst answer is maybe. And I think. We're sort of finally getting the yeses and the nose right, so we're thinking a lot about that, but actually back on the point of programmability, because you said billing has just put this beat in my head. Yesterday, in Berlin, we launched open banking hands in Germany and in France. True layer, I believe, with true layer, exactly. Yeah. Great company, straight portfolio company, and really great team. And if you think about what's been holding back open banking, it is some small missing abstractions like VRP, like variable recurring payments not being sort of implemented consistently across the billing like features, exactly the billing features, even just the ability to sort of like, do a validation and then charge later if VRP is missing on chain, any number of enterprising developers can just go build VRP. Yeah. And so this is where the notion of a permissionless, programmable and open protocol that, again, has solved the political challenge of just we're all going to build on this stack is so wildly powerful,
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Sy Taylor  35:59
fascinating, we're coming up on time. So I do want to make sure that people have the opportunity to find out more about everything you're doing on stable coins, and more broadly. So is there a specific place you're sending them to for that? Is it just stripe.com/crypto or something? Or stripe.com/crypto
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Will Gaybrick  36:14
bridge.com, bridge, dot x, y, z, privy.io, maybe we should buy the dot coms, but yeah, all over the place. And actually, we're going to be updating all of the pages on stripe now, because as we get closer to the sort of like full stack for developers, sort of crypto cloud can provide people with each layer in the value chain. We want to sort of solutionize that and make it more clear that stripe can just be your sort of one stop shop. Stripe
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Sy Taylor  36:39
designers are going to stripe design weirdly, weirdly strong on that stuff. Well, I hope we have you back many or more times. And also, I hope we have many more folks on the podcast that you then go on to acquire. Is there anyone you'd like us to invite? Of course, I'm kidding. Well, it's been a real pleasure. Pleasure. Thank you, Simon.