Powering Stripe's Stablecoin Stack

Transcript

[applause] >> Hello. Hello. Hello. Awesome. Great to have you here, Henry. Thanks so much for coming. >> Thank you for bringing me. >> Um awesome. Well, so it's almost been a year to the day um since you announced that Stripe is uh Privy is going to be joining Stripe. Um I remember actually we were traveling together during that period. Um and I remember I guess kind of equal moments of uh excitement and maybe of fear. I'm curious uh a year in, um you know, what were you bracing for when you when you initially were going to join and and and and what is it what has not actually ended up happening that you were afraid of?

>> Yeah, it's a great question. I mean, so so for those of you who don't know, um Privy builds uh wallet infrastructure. So we we build embedded wallets. These are key management systems that you can build directly into your product or your app in order to give your users uh simple access to crypto, to stable coins, to any digital asset without needing them to think about what's happening under the hood. So the point is to bring, you know, self-custody and general access to digital assets to a much wider audience without requiring them to, you know, find religion and uh and get into crypto in the first place. And we serve uh you know, a a a a a few thousand customers ranging from the likes of uh Jupiter, Hyperliquid, Uniswap, very crypto-native companies to the likes of uh Deel, Ramp, Klarna, and uh and much more mainstream businesses.

Um I think what we found along the way is that wallets uh exist as part of ecosystems and exist as part of ecosystems to uh move money around, both on crypto rails, on fiat rails, and uh you know, we had a a a a a customer at Klarna who we were closely with who said uh somewhere along the way, "Privy needs friends." And the point there was you guys are too low-level, basically. Um and so joining Stripe in many ways was a way to really accelerate our ambitions for building systems that could be used by anyone because we think that these rails are incredibly valuable to so many people who today only see them as crypto even though there's there's just insane advantages to using

decentralized money across the board. Um and so that was the part that was exciting to us. The part I was worried about was some version of the you know co-opting of the stack. Uh why don't we just you know centralize the out of our stack, verticalize everything, and make it that Privy becomes a captive captive captive piece of infrastructure only serving a certain set of partnerships. And so that was probably my biggest fear coming in and frankly it was a lot of conversations we had with with Patrick, with Will, with you know, the Stripe powers that be which was we believe that a huge part of building in this space is building with an open stack, one in which developers get to pick how they integrate the

rails, what chain they want to run on, um you know, what orchestration rails they want to use. And so very explicitly up front we were like we are so excited to join, we are so excited to ensure that Privy can help power Stripe products themselves, but as infrastructure, we need to be able to work with Stripe competitors, with Bridge competitors, didn't know about Tempo at the time, with Tempo competitors. And um and I think it's honestly been awesome to see just how long-term minded the Stripe people are. So I'm I'm sorry to say that I've been actually quite happy with the way this has gone in that I think the sense is we need to bring these rails to everybody and the way to do it is by fostering, you know, competition in the space so that we can

have an open stack that brings out the best of every sort of layer of the infra. >> Yeah, totally. Um you know, one of the things I've learned about working with you and and talking to you over the years is that I think you're very pragmatic when it comes to, you know, sort of the trade-off between being, like you said, you know, finding the religion, being super decentralized maxi, and you know, just building infrastructure that helps people build in a really pragmatic way. I guess like, you know, maybe highlighting that that answer around like how Stripe sees these things as well. I'm I'm I'm curious about I guess where where are those lines for you in terms of like keeping things open versus like how do you know if it's too closed or how do you know if it's too centralized versus just the right amount

of kind of centralization magic sprinkled over the decentralization? >> Yeah, that's a great question. I I I you can see I'm thinking about it because I don't think there's a clean line and frankly I think it's kind of, you know, death by a thousand cuts or life by a thousand cuts, which is to say in every product decision that we make we have to rethink what is the core advantage that we get from our users. Um, you know, in a sense we want to build an open infrastructure because we believe that building on these chains means everybody can contribute to the fabric of what's available there. So, for example, Privy has uh a product called Privy Earn, which builds on top of Morpheus and Aave, and uh you know, various providers. And this is never

things that we would be able to build ourselves, and so we benefit from this being a vibrant ecosystem. >> Totally. >> I think it's questions like, you know, early on the the the notion of an embedded wallet itself was very controversial because every time you make things easier to use in a sense, you are creating further abstraction, and the farther the user is from the metal, the farther they are from doing the cryptography themselves or the seed phrase, um the more they are buying into how a system does things. And this is not, you know, pure to embedded wallets, but you you the presentment you have in a MetaMask or in a Phantom or in a Rainbow is the same. The fact that you show transaction and, you know, you're going to show the hex this way rather than that way. This

is a decision that a software developer is making on your behalf as a user. >> Yep. >> And in a sense by enabling people to access wallets via an email or any off system we're furthering that. But but I think the way we try to do it is we want to make sure that in whatever we build we give the optimal rail from a UX perspective and we give as an equal citizen the canonical decentralized rail. So, for example, when we launched embedded wallets, we launched them with wallet connectors. >> That's right.

>> So, that if anybody wanted to use their existing wallet, they could. And we would never make a decision to force you into one path or another. Now, obviously, the developer has a choice on what to present, but we as an infrastructure provider want to make it just as easy for a user to come in with their existing wallet as to create a new one. And so, I think that's kind of how we've set the ground for following the market as we go, which is uh making sure we make the uh both normie path, for lack of a better word, very easy to use and we open up so folks can come into the space alongside uh ensuring that crypto natives have access to first-class rails. And then maybe the second thing is also giving escape hatches to users so that as they work, when we launched embedded wallets

again, we had key export as a feature from day one. So, making sure that as people um decide to use our orchestration, um they're always able to really take ownership over the assets, the rails, and leave Privy altogether if they want to. Exactly. >> Yeah. I mean, makes perfect sense. Um I think we'll we'll probably touch on some of the the recent announcements and and product product decisions that you made as part of those in the the next little section here, but I guess you know, one thing I'm very curious about is, you know, as a developer myself, like um Stripe has always been the gold standard for APIs, documentation, really like it just seems like they they've really known what they're doing the whole time. I'm curious like a year inside of Stripe, uh what are some of the things that that you've learned from

them as an organization that's uh that you've come in and uh and added into the way that your team operates? >> Yeah, it's a great question. I mean, maybe there are three things that stand out. The first is just absolutely insane ambition in terms of, you know, uh the belief that startups can shape the world and accordingly that catering to small businesses and enterprises alike gives us uh an ability to potentially help shape where this technology is going. And so I'll use, you know, Atlas as an example.

>> Yeah. >> Atlas is a Stripe product to incorporate a company. It makes it much easier to do so. And this was started 10 years ago, but today it's like 25% of Delaware corporations are going through Atlas. >> That's amazing. >> Um and you start this as a, you know, I wasn't there, but I assume like whimsical project of this is a pain in the ass for like folks trying to set up a new business. How do we enable it? And today it has a real impact on how easy it is to create a business. Likewise for like Stripe Climate and other things. And so I think uh some version of like belief in serendipity that the things we think are important are actually worth baking into the product because even if it's going to be a long journey it will potentially pay dividends. So this this

ambition of thinking in decades in a sense is the first thing. >> Cool. >> The second thing is balancing that obviously with, you know, being mega kinetic on the short term. Like in the long run we're all dead. Maybe it is truer for Privy than it is for Stripe. >> Sure. >> But uh but we have to ship something uh this month. Otherwise what what are we here for? And so I think we've seen a much more uh prevailing sort of culture of trying to balance like we have a sense of what true north is, where we want these products to go, but we're also able to make uh trade-offs and decisions in the short term to make sure that we're doing this. And I think Stripe is much more rigorous uh than Privy is naturally in laying out the sort of gap between the two so we can

move forward. >> Understanding the trade-off. >> Exactly. >> Yeah. >> Um and then I think probably those are the two big ones. Probably the third is just like and this is something we shared, but a deep deep commitment to like not deprecating interfaces. One thing that we hate as developers is like using an API that goes away. >> Yeah, 100%. >> And so I think we really, you know, sort of measure twice, cut once when we put things out because uh we have to make sure that these are going to be long-lived services that you can depend on for your business, for your products, for the experiences that you're building. Uh and so that's something that's like been deeply reinforced for us.

>> Very cool. Very cool. Um yeah, so I mean, maybe kind of jumping into some of the recent things that you've been working on as a team inside of Stripe. Uh Stripe Sessions was was about a month ago and I remember I was watching and all of a sudden you were on stage. That was very nice to see a a friendly face on on stage on the big stage at at Stripe. Um you know, one of the things that stuck out to me was the announcement around Treasury. Um it just seems like Stripe, correct me if I'm wrong, is basically giving every business that uses Stripe a a bank account underneath the hood. And Privy is powering a lot of that with their kind of stablecoin infrastructure underneath. I'm I'm curious about like where's the initial wedge there? Is that about uh businesses just holding

stablecoins? Are they going to start using things or doing things with those stablecoins? Um yeah, what where is that today and and and kind of what are the next steps look like there? >> Yeah, I I mean, I think it's it's you know, the the core of the strategy can be something that been into two places, which is one, how do we use crypto, stablecoins, decentralized network to create better products for every Stripe user. And so, you know, across Link, across Treasury, across any payment rail, we want to add this extra capability. >> Um which is these crypto rails. >> Which is the the crypto rails, which is, you know, faster, cheaper settlement, which is always on, you don't have to wait nights and weekends, which is a global rail from day one.

>> And cross-border, yeah. >> Exactly. And so all of these things I we think like will just create better outcomes for customers, including customers who don't know that there's any crypto involved. Right. Um so that's sort of prong one. And then I think prong two is in doing this, we're building out a lot of infrastructure. You know, today this is Privy, this is Bridge. Um and we want to make sure that we give uh access to uh customers, to platforms, direct access into that infrastructure itself. I think this kind of mirrors how Stripe has worked, you know, historically, which is uh you can sign up as a merchant, but you can also sign up as a marketplace. There is the product, and then there is the underlying platform that you get to access, and we're trying to do the same thing with crypto and stablecoins in a

sense. Um to answer your question, which I've now promptly forgotten, uh the I I I'm back. >> I mean, are are are are the is the goal just to have them hold these coins in these accounts or or you know, like how are we going to get them to actually use stablecoins? >> Yeah, I I think the goal I mean, you know, you saw this or I saw this like uh levels I owe to wheat, yeah, which was like, "Man, I'm receiving so much money on on Stripe, and every time I have to wait, you know, T plus two for it to settle, um and I can't just use it even though I'm also paying a bunch of merchants on Stripe. Like, why the hell can't I just get it to be like cheaper?

I don't want to pay fees. I want to make sure that I'm uh holding this money and able to spend it much faster." And so, this is both a mix of like global demand from customers who don't necessarily have access to the same uh underlying infrastructure to hold assets, to invest assets, to do all of these things. And um it's a result of very direct demand from like actual Stripe merchants who want to be able to do more directly as part of the Stripe platform. And so, uh the short of it is exactly this. Yes, you should be able to basically receive any stablecoin or uh digital currency either as fiat or in crypto, you should be able to directly operate with it in any form factor, you should be able to send it onwards, you should be able to spend it down, um and we want to make

sure that this is uh as integrated as possible because we think it's really powerful to do that. And I think today you have, you know, users in like 50 countries using Treasury, which would have been unthinkable without stablecoin rails. >> Yeah. I'm curious like for for a lot of this, it seems like it's a way of augmenting an existing financial system, and in a way we're trying to abstract away um you know, maybe the crypto, if that makes sense, in the sense that like as a customer of Stripe, you may not need to know that this is stablecoins under the hood, like you said. I'm I'm curious about like you know, I personally feel that stable coins are like 100x better money, right?

Like they enable so much as soon as that's on on chain and you have it, you know, a USDC for instance, you can do so much more with it than you can a traditional US dollar in a bank account. Like are we sort of like when we abstract away the stable coins, are we losing some of that magic and not letting customers know about kind of some of the exciting properties that stable coins have? And then maybe just to tie into that, you know, how do you think about kind of >> the additional risk as well of like something being on chain or something, you know, you the earn product with Morpheus like that adds some smart contract risk. Obviously, it's very minimal, but you know, how how do we kind of like show people the magic and educate them on the magic too and the and the

trade-offs? >> I think this is the entire ball game and in a sense, I basically yes to both sides and and and to the contradiction inherent thereof. And this is where, you know, Chris's point in the last conversation talking about more or less federation. He was making an analogy with, you know, the central Israel is getting picked up in the formation of United States, federal power, state power. I think this messiness of figuring this out and the fact that we have competing models for it is extremely positive. So last week, for example, we launched across, you know, the Stripe ecosystem MoneyGram which put out MGUSD. So this is a an issued stable coin that MoneyGram users can use in Europe, the US, the UK to hold better money in a

sense or at least this new form factor for money as part of this. Likewise deal launched a way for every contractor on deal to receive assets payment in stable format in various places in the world, hold that money as part of a deal wallet and earn on top of that money. >> All powered by Privy, right? >> Privy bridge itself is a family affair in this regard. And and I think the point is we want and at the same time some users want to do a stable coin sandwich. They don't want to expose any of the stable coins to the end user. And I think basically it's really good that we have these various attempts at figuring out what is the right Lindy nest basically to this rail because you're right. I think if you're

asking users to use defy you know, if the last two months have shown anything is that there's a I think responsibility to disclose some of this is how your money is being put to work. These are the rails that are happening. And so um I don't have a clear answer for you other than to say we as a provider want to make sure that customers, developers are aware of exactly how the stack works, that they understand how to put it together, and that they are armed with everything they need to show their users the appropriate amount of infrastructure peeking out. So the user can pull on that thread and learn more over time. And I think hiding everything in some sense uh will at times blunt the power of what you can

do with a technology. But I also think it's really important to ship the value, not to ship the infra. And I think crypto's mistake has historically always been to say, "But look, this is how it works." And no one gives a They care about what you can do for them. Yeah. It comes all the way. Um yeah, you mentioned you know, previous customers here are developers mostly, right? And you know, one of the things you shipped and I'm not even sure if I mentioned this to you, but I your team got me access to the digital asset accounts that you guys shipped and announced this at sessions as well. And they're very cool.

I think they basically wrap all the abstractions I would ever want wrapped out so I could build very quickly. I guess like do you still feel like tooling is the bottleneck here around people, you know, starting to really use use stable coins? Like we just didn't have enough tooling or or do you think there's something else here that's that's blocking this kind of adoption or a Cambrian explosion of stable coin applications? Like Yeah, I'm curious your take there. I I think it's it's it's it's I think it's threefold. I think first tooling has come such a long way and yet there are still, you know, bottlenecks. I think there's still a lot of questions around, for example, off-ramping and some of the rails. I would consider those to be tooling, but you know, they connect basically fiat and crypto together. Card issuing, things like that. There's still a lot of I'm talking

financial infrastructure here, but infrastructure that is missing. One. Two, I was in Amsterdam last week for Money 20/20 and regulatory clarity. I I I hate to beat the old the old horse, but the horse is not dead. >> No, yeah. >> And and there's still very much a need for deeper clarity including, you know, in Europe and the UK, in the US and that remains like a big part of it. And then I think the third is probably better integration and more attention paid to the nitty-gritty. Okay, now you can, you know, theoretically move money from a wire into stablecoins, hold these stablecoins, earn on these stablecoins, spend with them from a card. Great, but you know, what happens when you have to

file your taxes? What happens with accounting and making sure that the fiat and crypto rails marry together really, really well. So, this is one of the things that I find to be very interesting as part of working on Stripe, which is how do you marry basically these rails so that they can work at scale for massive businesses. And I think this is, you know, previously increasingly serving not just developers, but also fintechs, marketplaces, financial institutions, you know, Stripe's working with Meta to disburse creator uh >> Pay earnings, yep. >> in in the Philippines and in Colombia. And, you know, these businesses want to know, okay, it's it's nice that I can theoretically do this, but like work it through to the end of the year for me cuz I'm >> Yeah, cuz I have to balance >> intrinsic value in the technology unless it makes my life easier.

>> Totally. Yeah, and and I think right now maybe the the difficulty for businesses, I mean, you know, as a business at Global, we use stables very often and it helps for settlement, it helps for clarity of payment, but yeah, when it comes to the accounting layer or when it comes to just ramping on and off, like, you know, there there are challenges that we're happy to figure out as a very crypto native business, but maybe kind of more traditional businesses have challenges with. >> And I still think the gap in perception between where is crypto today is still very wide. And so, you know, we are so close to the metal in what's being built that we take it for granted that the infrastructure challenges have been have been served.

But that information is not evenly distributed. And so that sense I think, you know, as a space celebrating efforts to bring these things to the mainstream, to simplify the messaging, to show off, you know, charismatic use cases >> Yep. >> for this technology remains so important because we still very often talk to, you know, traditional businesses, financial institutions, and their view of crypto sits somewhere between 2014 and 2017. >> Right. And yeah, I mean, I think, you know, if you talk to the average person and use the word crypto, that has a lot of it attachments that may not not necessarily want to come when you're talking about actually financial rails under the hood. Um Yeah, I I mean, maybe kind of my last question is is, you know, what are what are you excited to see built as part of

solving some of these problems and and bringing consumers USDC or other stables, you know, maybe through Privy, through, you know, other other wallet solutions. I mean, just what what do you want to see next? >> I I I, you know, I look at sort of three KPIs. This is not a direct answer to your question, but I think, um what is the geographic reach? How many sort of both individuals and businesses can we say have been sort of, you know, to to be a little sappy, like touched by this technology? Like they're able to do things now that they could not have done before thanks to this or they're able to do things better, more cheaply than before. And so I think that's like something I'm really looking at in the back half of the year. One. Um and so

this is, you know, number of, call it, uh funded wallets or or volume or so on. The second is, you know, uh how crypto native is Stripe, which I'm I'm very interested in, obviously, for for for subjective reasons, but like what volume of traffic goes through these rails as as opposed to traditional rails, and how do we marry the two together really, really well? And then I think the third is continued iteration on new experiences that leverage crypto, that leverage, you know, crypto and stablecoins for very concrete outcomes for the user, but that do peek the rails under the hood a little bit, so the person can sort of, you know, pull on it. I think finding these new [clears throat] languages to talk about the value, and so this is where, you know, the deal announcement I think was

hold, earn, spend. And these are three useful verbs. And then you know, maybe on the on the 10-year horizon, this is an active debate, but I'm I came into the space for self-sovereignty, and I I still think that these rails and building out these rails lays the groundwork for creating a system that is that brings users in control of their assets and and their um holdings in a much deeper way over time. >> Amazing. Well, join me, everybody, in thanking Henry. >> [applause]