Tether's $500B Valuation & Plasma Mainnet - 6MV & Paxos

Transcript

Going through the traditional process is extremely challenging. The amount of documents and process to like create a fund is extremely laborious. >> A lot of the world thinks that crypto is just a scam. We're not going to achieve all the like great things that Carl was talking about earlier. >> Bugazi, tech debt, social layer divide, Dow structures. >> Are are they spearheading these conversations and it just kind of came to this naturally or do you think there's >> Welcome back to the world. This is your home to learn from the biggest guests, the brightest minds at the tip of innovation. Our goal is to help spread the collective knowledge of everyone in our community. We are breaking crypto out of its echo chamber and taking it to the real world. What's going on, guys?

Welcome to episode number two of Stabled Up. We have Carl from Sixman Ventures. We've got Bao from Paxos. They they actually used to work together, so it should be some good vibes and team chemistry here today. Rob, good to see you in Korea. Uh Carl, welcome to the show for the first time. We we've had your partner Mike on once or twice, but good to have you B. Good to see you again. Um guys, this is Stabled Up presented by Fracks, one of the leading stable coins in the space since 2020 2019. DeFi champions pushing hard into the regulatory environment with their genius act uh compliant stable coins and their yield bearing stable coin. We got a lot to talk about today, guys. So, Carl, why don't you

open us up quick intro about yourself, Sixman Bow, it's good to have you back and then we will get right into it. Terrific. I've been a general partner at Six-man for three years. My background is in product and engineering. That's really where I uh tend to spend a lot of time when I work with companies. Um Sixman Ventures at a high level is an early stage venture fund where we invest in cryptonative founders at the earliest stages preed through series A. >> Beautiful. Thank you, Carl. Welcome to the show. Uh Bow, it's your first uh first time back. >> I think I think I keep saying Bow. I think it's B.

>> Yeah, you did. I thought it was Bow and then you said Okay. I we'll throw that one. It's a tricky one. I think it's cuz he's in Asia. He's in Asia so he's like thinking bowels all the time. You know what I mean? I think that's what's going on right >> I was going to forgive you cuz you're in Korea right now. It's probably middle of the night. >> There's not much sleep in Korea. Bo, welcome back. First time since the USDH saga. I you know vote went one way or the other, but I'm curious how you how you've been since the vote. give us some takeaways and just, you know, some reflections on on really the process and and and how things have been the last few weeks.

>> Totally. Well, first of all, took a few days to recover after that. Uh that was that was a week of no sleep for sure. Uh but it it was a lot of fun and um uh so coming out of it, you know, I think the reaction from the community regardless how the vote went, we had so much outreach in the days following the vote from all the teams we talked to and they're like, "Hey, we still really want to work with you guys." um which has been an awesome reaction right and I I think we really achieved what we wanted out of that um kind of whole proposal would have been great to win don't get me wrong but it was like a an accelerated oneweek timeline just to get to know so many different um community members and teams building in Hyperl that we were already connected with some

that we connected with for the first time and so um just all coming out of that the warm reception from the Hyperlid community even even though we didn't win and saying hey please come still build with us we still want to do things and so we have some team members in Korea this week um and we're kind of like continuing on our plans to kind of um decide on like the right set of partners to start building with in Hyperlid and so um you know we're still continuing on um you know we're still excited to keep building in the space and so um you know appreciate the warm welcome from the Hyperlid community regardless of the outcome of the vote um and we're excited to keep >> yeah I saw Native Markets just deployed USDH today um onto Hyperlid so congrats to

and the competition has just started. So, it's was great to see all the different providers come out and express their support just to have Arthur Hayes dump on us after calling it for 128x. What's new with that guy? I mean, that's just like clockwork. All right, boys. Let's not bury the lead. Tether at $500 billion valuation seeking 20 bill. Bullish or bearish? Carl, go. >> I think it's bullish. I think at the end of the day, people have thought about money as a legacy financial system and thought about valuation metrics on that framework. But really, these are technology companies. The hard part of these businesses is not the reserve management. There's actually with the Genius Act increasingly clear guidelines on how to manage that capital. It's about technology and distribution. And

so with that, I think they're extremely well positioned to continue to eat market share. I mean the valuation's high but at the end of the day I think they are the leading uh you know stable coin out there in terms of adoption and growth and I think with the addition of um Bohines to their team it's just continuing to deepen that regulatory um situation. I think the last thing I'd be thinking about is not just technology but also AI. I think it's still wide open as to are AI agents going to pay on chain which chain are they going to pay on and which stable coin are they going to use? And I think that's a key area where whoever wins that space is is going to grow massively. So I think it's it's obviously very expensive. Uh you know we don't participate in rounds like

that, but I understand why people are so excited about Tether. >> I think that's a really interesting point about AI because that's not something that was intuitive when this announcement came out. Um that is a conversation topic here in Korea. Hib was on stage today. He was talking about how we've essentially had uh the formation of stable coin dominated economic zones. And so we have uh an onchain stable coin. It's primarily circle uh with USDC. And then we have off-chain and centralized exchange stable coins which are primarily USDT denominated markets with uh with Binance and and with originally it was Bitfinex.

Um but now you have those per denominating those asset classes. And so if you have AI agents on chain, they're primarily uh going to be consolidated into a single stable coin because that's where liquidity goes. So um I'm curious actually from the first point that you made, Carl, because I want to pass this to Bo and get his perspective on it. Um we had Wyatt on just a few minutes ago. He was talking about how look you know uh Mike Dudas Carl your partner put out a tweet said this is you know effectively 2x Goldman Sachs at this valuation. Meanwhile, Goldman Sachs has three plus trillion in assets under management. Tether's got something like 167 billion. Maybe it's a little bit more than that, but it's not three

trillion. So, Bo, you make uh you know, Carl, you made the point about this being a technology company. Bo, do you think that's the right way to think about you know, stable coin issuers? You being a stable coin issuer with Paxos. You know, is it a technology company? Is it a finance company? It's somewhere in the middle. But generally when you're thinking about the growth uh pattern, how how do you think uh and the valuation heristic here? How how do you think is the right way to think about uh these issuing companies? >> Yeah. I I mean I absolutely think these uh these types of companies are technology companies, right? Um and I think the the point that's really interesting to me is like yes, like it's 2x the valuation of Goldman Sachs. How many employees does Goldman Sachs have >> versus how many employees does Tether

have? like the like the operational leverage that Tether has gotten from both technology and network effects that they built up is incredible and I think it's just a reminder of the operational leverage and scale that kind of crypto or like call it technology enabled financial companies can get to um and I think it's incredibly bullish right and I think this has always been like kind of the hypothesis of everything we've done with like Paxos and Paxos Labs of like hey like we think this is going to be a massive industry but also the idea of bringing code and automation and techn technology to money is I think uh such a massive opportunity that I think some people in crypto understand it but I don't think the world at large has really internalized that and I saw some of the headlines yesterday I was like

you know at this valuation uh tether would be the you know largest privately valued company next to open AI and everyone gets the potential of open AI but I don't think until that number people really understood the the scale and the kind of leverage people can get with um applying technology to money as a as a as a um sector. >> Yeah. I mean, I think there's people on on the street who don't who haven't even heard of Tether, like legitimately people that are working in in, you know, traditional banking or investment making that that have not heard of Tether. This is going to be on their desk as of last night, this morning. Uh a shock. You know, I think the one thing that people are thinking about is well, if they're going to raise this much money, 20 bill

at a $500 billion valuation, the question is, are they worried about the interest rate uh trend being uh, you know, going down, that being a large part of their business model, interest income, and then how do they think about actually creating new business lines uh with this raised capital or with their current stack? You know, they own farms in Latin America, they own equity and Bitcoin mining companies, they own Bitcoin Gold. um you know, how do you guys think about Tether expanding their business lines to uh basically protect against the decline in revenue from dropping interest rates? Would like to hear from you both on this. Maybe Bo, you can start off.

>> Yeah, I mean, look, I can't speak as much to their ambitions on farming in Argentina. I'm not an expert there. Uh seems interesting, seems cool. Um my the thing I've always thought about with you know kind of like these early movers on stable coins particularly Tether right um because Tether keeps almost all of the yield that's generated by USDT u people are like effectively paying to use Tether and they're trading kind of the uh amazing network effects and liquidity and availability and on and off ramps of Tether in exchange for saying I'll forego my yield. My thinking is and like my like hypothesis has been like eventually in the long term um the economics or margins of stable coin

issuers look a lot more like asset management businesses right where you're looking at 20 30 40 50 bips on assets under management and then you know you're like monetizing around that. The question that, you know, I've been asking myself is, well, are Tether's network effects so strong that they're going to be able to fight that fee compression for longer than other companies, right? But tied to that kind of AI point, if you do have an AI agent that's transacting with stable coins, they're going to programmatically find the best deal and find the best economics, right? And if there is another stable coin that enables them to achieve their stated goal or outcome, but it actually has better economics on it for them, AI is more likely to

dynamically switch that than a human, right? Human consumer behavior is much harder to change and often not like rational uh versus with an AI agent that's doing this, you can literally program it to say, I want to achieve this outcome with the best economics possible. And it will go scan and actually like go iterate through that. And I think that actually might drive some of the speed compression for um um issuers, but I think issuers need to be playing for the long game. And and I believe that eventually like margins compressed to like an asset management business model versus like you keep everything. >> Carl would love to get your take on this and and I just want to throw in there, you know, th this is a prime probably very path dependent. um you know once those liquidity network effects become entrenched uh oh I to I think you're

totally right about the programmatic effect of AI and the the adaptability and the ability to switch and pivot but ultimately you know once these things take hold um they these liquidity network effects do they they tend to compound um Carl how are you thinking about this >> yeah I imagine that I mean there's it's I guess in thinking about the question it's like where don't they expand like money is used in every part of our lives. Everything from uh you know e-commerce uh you know physical retail um checkout, global financing, prime brokerage. So I I think there's essentially unlimited upside that Tether can achieve. Um I think the most interesting business model here is democratizing financial services that

previously were not available to like the 99% of the population. If you look at you know how even how today people are saving and spending in tether in emerging markets you imagine new financing products that can be that can go with that to now enable the thing like getting loans that we can do today in the United States that's not available for most of the world. So basically all the financial services we get today democratizing them and being the conduit and trusted brand name that people utilize. The last part on the business model that's really interesting is on the blockchain side. So, we're investors in in Plasma and what I see is the beauty about having a blockchain or partnering with a blockchain is now you don't just get money based on the interest. You get money based on gas

fees for every single transaction. It's like imagine if you're able to to be tether and build out an ecosystem through plasma or any other network that they choose to partner with and from that be able to get a portion of every single transaction that takes place on chain. That's where this becomes a revenue monster as you know especially considering that interest rates are going to come down over time. >> Uh Andrew on mute there. >> Sorry guys, just to double click on the plasma point. Today's Wednesday the 24th. Tomorrow is Plasma's mainet. This is live today. We'll be releases a full episode tomorrow. Plasma mainet. What does this mean for Tether? Obviously coming out as the category leader in the stable coin chain wars. Uh I think you

know one could say very highly competitive market. You've got you know stripes tempo. You've got circles arc. You've got plasma and stable on the tether side. What does plasma's mainet mean for tether's valuation for tether's uh entrenching its its USDT asset across the world globally? And um you know yeah let's just start there and then I'm curious to get your take on their plasma 1 announcement as well. Yeah. So I look at it as it now gives people a safe and secure place to transfer Tether with an elevated user experience compared to what you can get today on any other blockchain network. Um that's because it's designed with stable coins in mind.

And so in terms of becoming the and this relates to plasma one the um basically the consumer bank for the world is the way I think about it. Unlike banks today that are bound by regulatory restrictions and different geographies and other considerations, stable coins can are global by nature. And so there's no bounds to how quickly these uh stable coin issuers and networks more broadly can touch and they can scale at exponential rates faster than I need to in order to enter a new country I need to get a bunch of licenses etc. You know, stable coins are ubiquitous and universal. So I think there's just unlimited growth rate here. Plasma is very well positioned and already partnering with Tether to be um one of the places where the world comes to save and spend and do more.

>> Yeah, just disclosure, our fund invested in Plasma as well, met Paul quite a while ago and had been super close to them. It's trading pre-markets right now at about 8 to9 billion fully diluted valuation which is a big win I'm sure for sixman as well as for our fund which we're rolling out the branding for and whatnot very very soon. It's good idea ventures. It is a prop capital fund, probably around seven figs invested principle, maybe just over a mill. We've had some big winners so far. We got a long way to go. Uh Robbie and I are starting our career the last two years.

Uh Bo, just quick quick quick from you take on plasma take on the stable chain or stable coins chain uh kind of wars what this means for Tether. >> Yeah. So I I think the most interesting thing is Plasma one. Uh and the re the reason is the thing that I've believed since I got into the space uh and really like the reason why I joined Paxos in the first place was I've always believed that the broad adoption of crypto stable coins blockchain rails is going to come through existing kind of like fintech interfaces right um and the reason I believe this was I worked at Cash App and Square before I came to Pax House and one of the things I saw was it is so hard to actually like do customer acquisition in a consumer consumer

fintech setting. Um, and and what we were doing at Cash App was we were actually going around the world and investing or acquiring kind of like the P2P apps in different regions. And what we were finding was if you were a second mover like Cash App was actually kind of like an anomaly that it was a second mover in the market that was actually able to catch um kind of catch enough market share. Um, and we found that's very hard to do. And so taking that experience beyond what I've been thinking about is like well I think the plasma approach is very interesting. I think plasma one looks like an awesome app. I would love to use it. the question becomes like do they end up developing kind of the muscle to go run like consumer fintech like customer acquisition right I think it's a very

different muscle very different motion than uh crypto user acquisition right and so um the question I have in my mind is it is it the plasma ones of the world which are these kind of um built from the ground up like stable coin or blockchain aligned fintech apps or is it the you know the cash apps of the world the uh the Gcashes, the you know PTMs of the world that actually get around to implementing these services and they already have the distribution right and you know we know like Ant and Alibaba are looking at this like so that's kind of the race that I'm seeing and I'm curious to see how it plays out. Um, I I I love the idea of a app that's built from the ground up like around stable

coin rails, but again, like maybe I'm like scarred from my past experience. Getting distribution and consumer fintech is very hard. And so like my bet is slightly towards the like existing fintexs getting getting together to like actually do some of this stuff. And and for what it's worth, that's kind of like what we're focused on at Paxos Labs is like we think yes, stable coin access for existing kind of like fintech platforms is important, but there's also kind of things that come beyond that, right? And this is kind of what Carl was getting at. It's like well you just do stable coins and then maybe you do payments but then there's all these things around lending, borrowing, all the financial services that can be built around stable coins. Um and and I think that's going to like every fintech app is in the world is going to get there.

It's just a matter of when is how I think about it. >> Carl, anything to add there? >> No, I think he's spot on. The only thing I'd add is I think Tether has distribution. I I don't know Cash App numbers versus Tether, but I'd assume that more people know and have heard of and use Tether globally than Cash App. So I think when you start to pair the distribution that they've already achieved with the technology blockchain and to your point like the financing layer that can be added on top um it's a pretty powerful combination. The last thing I'd add is, you know, banks today when they're valued, they don't really have ecosystems or at least not robust ecosystems. But blockchains by definition, to um Bose's point, are challenging to build. But if you can build them, you have you reap enormous rewards. And so you're taking the

benefits of of banks and money ownership and movement with the ability to build an ecosystem where now anybody can also build value ad services and platforms on top. I I think it's a pretty exciting combination. Introducing Extended exclusively on Stark, a nextgen persp. You get the best experience on chain today. Deposit in the community vault for attractive returns, XMD compatible, and engage in unified margin spot trading, lending, and per trading. All right, gents. Rolling into the next topic. We've got stable coins to be used as collateral in the US derivative markets. Uh so it's kind of a vague headline here, but curious for your

initial reactions. What does this mean for stable coin adoption? Maybe what does this even mean? Like what is the current collateral in US derivatives markets? How do these things settle? Um and what does the addition of stable coins eventually mean? Maybe we can start with just understanding how US derivatives markets work first. Uh if either you guys would like to take take a quick stab at that. >> I don't have a background in traditional finances. Here's here's what I would hypothesize and or unless Bo you want to start if you have a back. >> Okay, >> go go go for it. I'm happy. My hypothesis is anyone that's lived through actually when I joined Paxos.

The reason is I listened to Chad on a podcast and he talked about the 2008 financial crisis and at the time nobody knew where their assets were and I actually lived this through the SVB collapse where I I manage all of our assets and we had wires in different places and I'm moving wires and literally don't know where the money is. And I think stable coins have a very uh they're it's very clearly understood where who had what money and when. And with that that's where this starts to become powerful is when you have these markets and if there is any sort of um you know collapse or extreme volatility and people are uh you know losing their financial positions. We now have the ability to trace the money and I can understand did this confirmation and

transaction go through or not. And just that peace of mind and speed of settlement can actually help limit the downside in these financial catastrophic scenarios. So I think that's where it can be powerful. Um I think in the early days it's you know going to take time to get adoption. People are used to wires but it's more seamless to use uh when we fund companies. We need to do callback numbers for wires and it's such a pain. uh versus I I think this is going to simplify back office operations for all these companies that use um you know futures and you know now they can use stable coins and have lower operational requirements and it can actually help speed up uh settlement. So I'm I'm pretty optimistic but I don't expect and you know huge outcome immediately. I also don't know this market well and so

as a typical VC I can opine on anything without having as deep of uh you know depth here but I'm always quick to say when I don't have depth in an area versus when I do. I I'll I'll I'll I'll say a few things with the same disclaimer. This is not my area of expertise or or area of depth, but I I think the on the surface the potential benefits are clear, right? Faster settlement times, lower transaction cost, uh 247 to Carl's point, transparency. Um I think all that's really interesting. I think there's another piece that's really interesting around all the actions that are actually taken, right? Kind of margin calls, like doing all the kind of actions that need to happen when you're running an exchange or like a trading operation. the ability to automate that with a modern tech stack, right? I think

that is like really exciting to me. Um because uh again like that's the thing I always come back to with stable coins. It's like it's like modern tech stack on money. That is amazing. Like a lot of the banking system is built on a very like legacy tech stack. Um and it's all built in silos. So we're talking about a transparent interconnected tech stack that enables money to move. Now, with that said, one of the things, you know, I've been kind of like noodling on over the last 24 hours is like the idea of stable coin accepted as collateral for futures trading sounds amazing. And what I was playing out was like, let's say like tomorrow they like go through this comment period and they're like, amazing. This is great.

We're going to do it. What does that actually mean to go do it? Right? There's a whole laundry list of things and I'm sure Carl can like spot like kind of like help me out out here, but it's like, okay, well, some of these venues need institutional grade wallets to manage these st like like where are they actually holding these stable coins, right? Um, they need wallets. Uh, they actually need the ability to like call smart contracts. They need to be able to reconcile stable coin balances versus fiat balances, do the reporting that's required by the CFTC for of them. So, there's like this whole implementation path that I can see like being like years of work. I don't know, maybe a year of work at least. Um, and so I think like the headlines very exciting, but when I like stop to think about it, it's like, oh man, like

actually like all of the venues that participate in this market would need to like level up their infrastructure to actually support this um and all of their operations. >> Yeah, we haven't really had a new financial system since we became digitized. Even the fintech area was putting lipstick uh a fintech era, excuse me, was putting lipstick on a pig. This is the first time to B's point we're able to rebuild from the ground up this financial layer on blockchain rails and with that becomes a lot comes a lot of automation a lot of transparency and it's very exciting. >> I think uh the 247 nature Rob as well and I know you guys something is where that the entire like traditional financial sector is heading towards feels like this is like a little a little hint as to like hey guys like

we're starting to think about how do we get this thing to be working all the time. I I'm curious where who do you guys think this push is coming from? Like obviously us in this room like we've probably been thinking, oh the traditional financial system has been legacy for too long. We want to change that. But who who do you think is, you know, at the CFTC, you know, are are they spearheading these conversations and it just kind of came to this naturally or do you think there's there's entities out there that are sort of they they had this in mind and they're pushing for it? Um, so my take is that we've shifted into an administration that uh where being pro- innovation is rewarded and applauded. Uh, and so I, you know, I think even uh, you know, SEC chair Paul

Atkins kind of did a speech in a couple weeks ago in in Paris and and you know, he spent a lot of time talking about kind of like this being crypto's moment and all the things that the SEC wants to do to um, ensure we're creating kind of a pro-novation environment. you know, I think like a similar uh kind of like sentiment coming out of the CFTC. Um, and so I think we've shifted towards like an environment where administration are rewarding people for being pro- innovation versus kind of like pro- enforcement. Um, and it creates like a whole different set of like um uh incentives, but also like I think there are a lot of people at these agencies that are pro- innovation um but weren't really being given the the you know the space to kind of push some of these new ideas um in previous years. And so I

think we're in a dramatically different place from like a political environment perspective as far as like crypto goes. Um and so I I think a lot of people um are pushing forward ideas that maybe were you know on the shelf for a few years or just now feel comfortable doing. >> There's another innovation here like a regulatory innovation which is the potential exploration of uh combining the CFTC and the SEC under Atkins. And you know, Carl, I think you mentioned earlier in this segment that there's really no need for a lot of the protections that were put in place under the legacy system if we are to upgrade. So, how how do you think about making this regulatory shift? Is this continuing in in a positive note to to make this uh merger between these two agencies?

>> Um, I don't have a strong point of view. I think it's interesting that we do have this question of is, you know, going back to orange groves in 1929, is this a security or a commodity? it seems like an outdated set of infrastructure and rubrics that we're using. So like generally it seems like a positive development um streamlining streamlining the regulatory process creating clarity or right now there's limited clarity. Um I'm sure if they were combined the market structure bill would be easier to uh push through than it is today. Um so it generally seems positive but I'm sure there's some unintended consequences that may arise.

>> Yeah. Yeah. Yeah. I mean, um, I think from the from the lens of of having Gary Gendler be the and his administration be the cause of so much fugazi tech debt, social layer divide, Dow structures, uh, lack of of efficiency in the industry, it really feels like like slowly but surely between the new administration and as well as the the the newer set of of uh, entrepreneurs coming into the space, better talent, we're just kind of slowly unbundling a lot of these uh like it feels like it's just like a bunch of rubber bands. We're just taking off one by one until we get back to like the core which I think is just building really really better technology helping you know the financial system go into

this new era of internetbased finance 247 uh you know verifiability all the properties that we enjoy about crypto and blockchain that we're now used to bringing that digital asset infrastructure to uh the the real world and frankly I think maybe we can blame our blame the social layer a bit inside of the way that we thought about it But frankly, I think that we were kind of forced to think about adoption in a in in a way that was coming from a a feeling of needing to be protected and not wanting to, you know, take legal liability. And so, you know, I think it's a really positive development to see uh, you know, as Bo mentioned, just this shift towards in innovation and broadly seeing the industry untangle itself slowly but surely here.

>> Bo, Bo, do you think Gendler was just that bad or do you think this administration is just that good? Uh I don't I don't know if I'd make like a definitive statement there. I would just say it's different, right? I would say it's different and I think like the current scenario or current situation is definitely much more pro- innovation. >> One thing I will say though is I I think no regulation isn't the answer either. But I also think there's like a little bit of a burden on us as an industry to better like self-regulate to a certain extent and and hold ourselves to a higher standard because um that is also a limiter to growth. If a lot of the world thinks that crypto is just a scam, we're not going to achieve all the things that like great things that Carl was talking about earlier about how the

whole world has access to these financial products. >> Yeah. Um guys, kind of come into a wrap here in the next five 10 minutes. When we're thinking about this, you know, broad stable coin landscape right now, we're operating within, you know, around I think around like just call it like 200 billion or so, maybe 300 billion, sorry. I think it's probably a closer estimate. It's probably around 270 total right now. I I think it's pretty clear that we're on a road to a trillion dollars of stable coin supply here, if not multiple trillions. Um, you know, I'm curious what you guys believe that path looks like from the regulatory perspective, from uh integrations into traditional finance perspective. like is there going to be something that is a

big, you know, a big potential win or milestone that we hit that just unlocks so much more stable coin supply or, you know, in a similar way that we saw DeFi infrastructure like Ave and and Morpho and Compound and Uniswap and these names kind of now become much bigger as a result of these treasury companies and these treasury companies start to bring in capital onchain institutions will is it just the same driving forces that are going to drive DeFi to, you know, a trillion dollars of total PVL uh you know is that same force going to be driving stable coins to trillions in supply or what do you guys believe the driving forces of that uh increase in total supply will be uh over the next year or two

>> and maybe uh Carl you can start us off >> that's a that's a 50-page doc that I could that I could write on so I'll try to give you the 30 seconds to one minute version um I think the obvious things are the emergence uh or the continued growth of consumer banking globally uh where you know using stable coin native banking I think that's just an obvious one that's going to continue to grow um it's also going to help increase crypto mind share more broadly and you know one of the things I found is once money goes onto the blockchain it very rarely goes off and so once the you world's citizens start to put their money into tether and into other you know stable coins and products it's very unlikely to leave right so I think that's going to be a huge growth lever that's going to have

compounding returns um the one and I think like banks in general can really you know increase by tens or hundreds of billions of dollars almost overnight some of these settlement flows if they actually start to adopt stable coin rails. Um I think they're going to be slower than people think even in this optimistic regulatory environment. But I think that is a major growth lever. The one that's probably the biggest dark horse that I feel like people don't talk about enough is private credit. We've seen a lot of teams and now even uh funds forming around private credit on chain. And if you're trying to raise capital, it could be anything from, you know, any sort of debt instrument that you need. Going through the traditional process is extremely challenging. Even in the terms of like fund formation on

the venture side, the amount of documents and process to like create a fund is extremely laborious and you have to hire outside firms to help you manage that process. But be able to put these things transparently on chain is actually a radical growth lever. Especially for mid and smaller sized companies that need access to debt but are locked out of the current financial system today. Almost every day of every single week now I'm getting an opportunity to put private credit on chain or some technology platform that's streamlining this whole process. And to me that is an incredibly exciting area that's actually going to help business and capitalism more broadly. And nobody's talking about private credit.

So I was I've been spending a lot of time there. There's some really terrific builders in the space. Um along that is like the whole vaulting process. So things like Upshift and Midas and others where they're basically allowing capital formation on chain for funds for businesses to grow. Um so that's one that's going to grow very quickly. >> Um I I agree with Carl on a lot of those. Um, one of the things I was thinking about on this topic, um, was, you know, we've talked about there's, you know, whatever, $200 billion of stable coin, um, uh, market cap today. Um, I was recently reading about kind of like some of these very large brokerages just in the US, like kind of like the Charles Schwabs of the world. Um, who alone hold, um, you know, tens if not hundreds of billions of dollars of cash

on platform. And so one of the things is like, well, what would it take to get those types of customers to like flip everything to stable coins? Because that is like overnight just like eclipses the entire stable coin market cap today. And there's obviously regulatory things. Um there's also kind of like kind of a mundane uh topic that most people don't know about, but it's like uh how um accounting is done around what's considered cash and cash equivalents. like what can these regulated companies or these public companies actually hold either on behalf of customers or on their own balance sheet? Um and getting stable coins to be treated as cash and cash equivalents. Um I think is a huge unlock to getting like massive amounts of inflows into stable coins. And so um that's what I'm like I think like

obviously the global banking and all that stuff I think is going to be really interesting and it's like what I'm personally most interested in. But really, when you're looking at like what are going to be like the big number swings, it's going to be like some of these massive brokerages coming in and say like, "Hey, I'm turning all my cash on on platform into a stable place, right?" And like that's like one stroke, you know, obviously doesn't happen overnight, but theoretically a single platform could add hundred billion dollars of crypto market cap um if they decided to to take that step. And so that's really exciting to me. And I think that's going to like get us to a trillion faster. >> Some could say trillions. Trillions, Carl. Trillions. Plasma mainet tomorrow, baby. We've been waiting for this for a while.

>> Let's go. >> Let's go. Guys, it's been a pleasure. Uh, thank you for your time. It's It's over. It's past midnight now in Korea. It's officially Thursday as you you'll see on on the feed when it goes live. It's says Thursday night. I think it's a good time to wrap. Let Rob sleep. Bo Carl, thank you for your time. It's been a great session. >> Thanks for having me. >> Thanks for having us on, guys. Thanks for coming, guys. Yeah. See you next time.