What Happens When Your AI Agent Gets a Wallet?

Transcript

If you believe that stable coins are going to grow significantly, then I think tokenized assets will follow suit. A lot of the demand is going to come for tokenized assets is going to be an extension of stablecoin native fintex. As an engineer and a developer building in the space, I think about just one thing and it's liquidity. One of the reasons why I'm building on stable coins, it's actually not for the instant settlement and it's not for the microtransactions. It's the integrations with DeFi. It's the integrations with the yield source and all of that. In the next few years, we're going to see a significant amount of retail people who are actively building out strategies and executing them using AI. The skeptic in me would say, "Really, retail traders?" Yeah, that sounds like a way to lose money. Is there a real fundamental place for retail to play using these tools? Or

is it just pretending like you're trading, but at the end of the day, it's gambling and speculation? If I have a $200 a month clawed subscription plan, how much more than $200 can I make per month? That's like what people are trying to figure out. The people that I think are making the most money with AI are people that are teaching you and selling you how to make the most money with AI. You know, I think on the one hand there's opportunities for FX, there's opportunities for crossber money movement, but the reality is is that uh I think a lot of the the FX flows are going to be a form of banks who receive settlement in the form of stable coins and and I think they are going to have more liquidity due to interbank FX rates and just just the scale they have. I

actually think sort of an extension of this banking as a service idea where you can now get better yield could also be a really big opportunity for local currency stable coins. Welcome to tokenized the show focused on stable coins and the institutional adoption of tokenized real world assets. My name is Kai Sheffield. I'm the head of crypto at Visa. I'm your host for today. Uh Simon is out of office, but we're joined by a fantastic stand-in co-host, uh my friend Noah Lavine, partner at A16Z Crypto. Good to have you here, Noah. How you doing? >> Doing great. Excited to be back on the show.

>> Uh it's great. Last time though was on the show, you know, he was, you know, on the Visa crypto team and so amazing to have him now, you know, as you an incredible investor at A16Z. You know, if anyone is raising money in stable coins, you should be talking to Noah. And then in addition, we've got some amazing guests. Uh joining us is G Money, crypto OG, NFT enthusiast, vibe coder, vibe trader. Uh G Money, welcome to the show. How are you doing? >> I'm good. Thank you for having me on. >> And our last guest is Michael Blau, CTO at Royal. Uh, great to have you here, Michael. How are you doing?

>> Great. How are you? And I guess, by the way, this is a little bit of a reunion because I also used to be a a partner investor at A6Z Crypto. So, uh, big family here. >> The A16Z crypto mafia. You can't you can't escape it. One quick bit before we get into the content. I need 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 represent. Nothing we say should be taken as tax, financial, investment, or legal advice. Do your own research. All right, for the first story, we've got to talk about X42. You know, it was a a big week for Agentic Payments. We had AWS, you know, they have this Amazon Bedrock agent core platform, uh, which partnered with

Coinbase and Stripe. uh you had Salana Foundation, you know, partner with Google Cloud, you know, all enabling stable coin payments for AI agents. Uh Noah, you've been at the center of a lot of this, you know, on the the VC side. You know, you wrote a post a while ago about headless merchants. Can you help just like set the scene of, you know, what's happening in the X42 Aentic stablecoin payments ecosystem and, you know, how should our our audience you think about what's going on? >> Yeah. No, for sure. I think like as a starting point just to kind of overlay the thesis you know I think when a lot of people talk about agentic commerce they think about going to chat GPT you know buying groceries or buying sneakers uh putting you know putting a card down

and and that's sort of the entire experience I think you know from our perspective we see a much bigger opportunity as it pertains to you know how is the next class of developers who maybe have never wrote a line of code in their life but are coming to this through something like cloud code or you know codeex with OpenAI and they're going to want to get access to a bunch of different developer tools and because they're, you know, maybe building a project on a weekend and it's not something that they're going to want to use for a long period of time, they want to buy things on a per usage basis. And often times their agents are going to ultimately be the, you know, the the actor that's buying in this case. And so we believe that there's going to be a whole new class of of kind of what we're

calling headless merchants where it is, you know, presented as a endpoint rather than a website with a sales team and uh you know, long-term contract agreements. Um and so I think, you know, what we're seeing in the X42 um ecosystem is just a whole new class of uh of endpoints and developer tools that, you know, people are using. And I think what's really interesting about um you know these announcements is I think originally our thesis was the majority of the new merchants that were coming in were going to be sort of these longtail um you know smaller you know startups frankly and I think it's very encouraging to see uh bigger companies you know such as Google um such as you know AWS and and and other party you know other players who are um you know recognize the opportunity and are are are coming to

the space >> and then Michael you're you're building one of these you know headless you know merchants in in in some way. Can you talk a bit about you know drip stack kind of what was the journey you know towards where you are today and like what does it look like to build one of these endpoints? >> Sure. So I'll give you the the quick story because it didn't begin with drip stack actually. Um it began with I am a you know passionate crypto engineer myself and so I love to play with all these new tools and I saw that a lot of these wallets that were launching um like aentic wallets they were uh proxying and wrapping a lot of these APIs so that people that had these wallets can start to like use it and and feel the magic. And I realized like I

just a lot of what they were selling was just data or prices. And so I actually started by building a reservation um tool, right? And so you can allow your agent to book a reservation at a restaurant in New York. And I called it I called it agent res. And that was my sort of beginning to experiment with uh what it would look like to to build a headless merchant without having to use resi directly or or open table or whatever. And that's that's how it started. And that was just a personal side quest. And at Royal, what we do is we like our sort of mission statement as a company is to explore programmable money for creators. And so I think I've always been a very big Substack newsletter reader myself. And I felt like it just makes a lot of sense that

most of the best content is behind pay walls um already on Substack. And so how cool would it be to build a tool to let these writers sell their content that is typically behind a payw wall directly to to agents? And so that's where sort of the grand vision of Dripstack began and and we've only been building it for about like three or four weeks actually. So it's pretty new. >> Yeah. And then it feels like there are these like new endpoints that are popping up you know every week that are doing really interesting and innovative things but then there's the question of okay what's where's the demand side?

Like so the supply side is being built out but who are the buyers? Who's going to actually go and do these micro payments you know to be able to purchase uh G money? How do you see that ecosystem? And like as you've gone down the vibe coding rabbit hole, like what problem do you see X42 and MPPP tempo solving? Like do do you believe in this like we're going to get this open agentic, you know, commerce ecosystem where you're paying microp payments all the time or like how does it actually you help you as an end customer? >> Yeah, I I definitely think so because I think when you look at like the structure of commerce uh currently, right? Like I think it's a there's a lot of fees, right? And it's also very

cumbersome. Like if I want to, you know, today, you know, at the dawn of AI agents, if I want my AI agent to buy something, I literally have to give it like access to my credit card or like maybe make another sub credit card on my account and give it access to it, you know, like it can't create its own bank account. And so it's like it's funny because like I've been doing stuff on uh legacy rails and I've been doing some stuff on crypto rails and it's like the crypto rail stuff, you know, it's getting easier and easier to set up, right? Like there's no necessarily like KYC to set up trading on a per on a per exchange, right? And and stuff like that. And I just think also, right, like you know, uh Michael said, uh Substack, you know, it's like I have to sign up

with a credit card, right? And it's like obviously one there's credit card processing fees and you know a bunch of fees that go in there. So that you know even though for every dollar that I pay you know how much of that actually goes to the creator it's probably like I don't know 80 cents 85 cents I think with Substack um after all the fees are said and done but like you know I think that if anything like the these X42 payments will increase margins and like you know especially for low margin business like that matters right where you know an extra you know one 2% like it definitely like helps right and so that's why I think it's I think it's it's all conversion urging towards that.

And then I think also it's like I think we're we're moving away from a like like a pay per seat model, right? And in like an all an all you can eat package and to like you know eat what you consume, right? So, it's like I think we're starting to see a lot of it with um the Frontier LLMs where there are, you know, the $20 the $200 month packages, but then also there's the API stuff where you're like, "All right, well, I only, you know, if I'm utilizing $100 worth of credits, like I will pay for it, right? Some whatever that cost is plus some margin on top of that and I'm okay with that and I'm not necessarily like paying for more than I can use and and whatnot." And I think, you know, because because we've been seeing this more and

more and because of the loads on capacity, I think like as consumers, we're probably going to get more accustomed and more used to saying, "Hey, I'm just going to pay for what I consume." Because probably I think the most important bills that we have um coming up for like personal use is consumption of inference and intelligence through these AI models. And if you're if you're used to paying per token on that front, then you're like, "Well, why should I pay per token if I want to consume your content, right? If I just want to read one article from your substack, I'll pay you for that. Like, I don't need to pay for a full subscription." So, I think it it, you know, it's like one of those things.

I think like the same thing happened during COVID where QR codes were around for a really long time before COVID, but they really took off once CO came around cuz people were trying to do contactless ordering and all that, right? And I think it this is kind of like one of those similar paradigms where um we're used to paying for consumption now for AI. And so like that's just going to spill over into everything else where it's like all right well you know why should I pay you $1,000 a year? I'll pay you for every piece of content I consume from you.

>> Yeah. It's it's a really interesting behavior change to me because even even within AI, it feels like 6 months ago, maybe nine months ago, most people were just on subscriptions and they were paying either $20 a month, maybe $100 a month, maybe $200 a month. And that that was just like that was the subscription to get the best AI. Now as this explosion of agents uh in the form of whether it's openclaw or hermes or cloud code or codeex they now like the use of the agents and how much value they can create just does not fit under a subscription like anyone who's like really really token backs like there is no subscription to get you know the demand that you want and so we're now becoming accustomed to this pay as you go model that I'm like topping up

credits every few days it's my biggest expense personally it's just buying credits it's on OpenAI and on Enthropic. And so it's a great point that like once you get that behavior change where people are used to like topping something up and then drawing it down rather than subscriptions like how does that bleed over into other segments, you know, whether it's creators, whether it's, you know, other types of developer tools. But Michael, go ahead. You were you were jumping in. >> Yeah. Well, I was I'll I got two things to say. One sort of to comment on what you just said and something else, which is who's who's the demand side today? I think the tr the truth is and I I'll say it I'll be the one to say it is like these wallets are still pretty hard to use. Okay, even with even with agents

and people are doing a really good job of making the UX great, but most of it is like our nerd circle this corner of the internet on X, right? That being said, there are there is a category of person that is going to be very very willing to jump through the hoops of that friction, right? And it's going to be the people who know that on the other side of that friction is just something that is an incredible use case. And I think that incredible use case as Kai you said we're going to talk about eventually is trading and investing, right? Like traders and investors have proven to be a audience that is very willing to push through friction to get access to more efficient tools to trade, make money and invest, right? And so I

think that category of user may be a very good um initial source of demand. So that's like that's to answer your first question. And then the second thing about the the token uh maxing kind of stuff. What's really interesting about that is the pay as you go model existed already, right? It was pay-per-view. It was the old version of iTunes where you would like pay 99 cents for a song, right? It I mean even the app store still works like this today, right? Like it's still 99 cents an app. But even though it's 99 cents a song, there's still a lot of overhead for the user to make that purchase. Like there's a lot of like mental friction that people don't want to do, which I think is one of the reasons why subscriptions as a business model took off in the first place. And what's so amazing is AI

as a unrelated to payments whatsoever. AI AI as a tool for the world is abstracting that away completely, right? And so all of a sudden now that AI is able to abstract away your purchasing decisions when you're token maxing like you're not really thinking about the price per token. It's all abstracted away from you. But it really is price per token. That's what's allowing us to almost go back to this model. It's this new interface, right? That lets us go back to pay-per-view or or pay-per-views. Yeah, I think Michael makes a really great point and, you know, kind of touching on some of the the work and the writing that Simon's done. you know, he talks about this idea of the intention economy where now you have whether it's developers or or or consumers or businesses, they're going

in with a request or a demand that they want some some sort of outcome and they're probably agnostic to how that outcome gets done. And I think if you think about AI and where it's going, you know, the two most important inputs for AI is compute and data. And so I actually think the creator economy is like a really interesting uh segment of that because you know today data is largely limited to whatever is available on the internet. And yet as you guys know like there's a ton of information and asymmetric intelligence that is available from people who just have creative thoughts and and are thinking um you know have ideas or have exposure from experience. And so I actually think tipping is going to be a a new thing that comes back um in in much larger in the you know sort of agentic economy um

today. Hey, I mean, if you go on Twitch and you watch a streamer, you like you, you know, tipping is a very common thing to do. I think as time goes on and I go to my agent and I say, "Look, I need this, you know, I need to do some sort of output and it requires very uh niche or or specific information." I think there's a world where you have agents that are going to go and tip different, you know, whether it's people or other agents for specific content because they know that if they there's no economic incentive for them to provide that information, that information will no longer exist. So I I think the way in which you increase data is actually by getting more granular and and and novel forms of data. And I think creators and and and creator can be a very broad you

know broadly defined term right it could be experts in certain areas. It could be you know traditional creators as we think of them. I think that's going to be a really big opportunity. >> Yeah. But I I think for all of this, you kind of you need the infrastructure to be built out to where every user has a wallet inside the platform that they're using. And then I think the question is kind of what what should that wallet look like? How should that wallet work? And you know, Goney, you're you're talking about kind of the kind of natural like crypto native of anyone who's like been in crypto being able to use those wallets and how the experiences are getting better. Yeah, I'm over here a bit on the other side saying that, you know, even as a crypto guy, I would still rather give my agent

a card. And I feel like there more controls that you can have, you know, on a card, not having to worry about on-ramping. I've got to buy stable coins. I can't buy stable coins with a credit card cuz, you know, a lot of you issuers, you know, don't want you to use credit to buy stable coins. Being able to just give your card to an agent with the right controls in place, I think is a really powerful consumer experience that brings in a segment of the population that is into AI but never went down the crypto rabbit hole and they don't necessarily want to have to stand up a wallet. But on the other side, I feel like there's just this magic of stable coins for settlement of if you're going to have this agentic economy and you're going to pay as you go, you know, to be able to, you know,

buy inference or, you know, buy any of these like new developer tools, it like pains me to the core to say, oh, settlement's going to happen 3 days later, not on the weekends, not on a bank holiday. It's like you've got to be able to get the money to those merchants faster. And so that's why like we're working so hard at Visa to say we think that there's this this hybrid model that is cards on the front, stable coins in the back and being able to make those work really well together is like we've got to find a way to give wallets to all these agent users and some portion of them we think a big portion would rather just put their card in and not have to deal with with stables. U yeah I don't know G money how you see this kind of

playing out you know over time and then also like the the motivations of why do you give your agent a wallet you know is it to save money and buy shoes or is it to actually go and make money and so how do you see the consumer behavior drivers towards more of these users eventually getting wallets? >> Um so I think it starts to and I know Michael touched on this I think it probably starts with trying to figure out how to make money. I think one of the interesting things like and I've seen this over the last like year and this is my journey in particular is like first when I started like being able to actually make stuff like with vibe coding I started doing like some personal productivity stuff I started doing some health tracking like something you know sorting my files my

emails like stuff to make my life a little bit easier and more productive and now I feel like I'm trying to focus on all right now how do I use these tools to actually make money and bring in money and I think that that's where like a lot of people are right now. And to to what Michael was saying is the reason why I think traders and investors are willing to go through a lot of friction uh initially is because they're like all right well if I can you know if I invest $1 and I can make you know some multiple of that. So more than a dollar then this is worth my time right and there's always like some number uh that that's different for everybody. And so like that's kind of where I've been like focusing a lot of my time over the last

like I'd say like four months is like okay cool I now know how to like make myself more productive but now like how do I bring in money right and how do I make money cuz I think that that's one of I think that's one of the things like it's interesting I was listening to allin podcast over the weekend and that's one of the things they were talking about too is like we've obviously seen an explosion in compute a lot of capex spent on intelligence But like what has that meant for earnings in the S&P? Has there been like operating margin expansion? Has there been an increase in revenues? We haven't seen that yet. You know, it might be another 24 to 36 months before we actually do see that. But like that to me is like the key point that people are

trying to figure out is like if I if I have a $200 a month clawed subscription plan, can I make how much more than $200 can I make per month? Right? And I think that that's like what people are trying to figure out. um you know and I and and I think the interesting thing is um as I spent more time um focusing on this is that like you know we have four different people on this call we would all utilize the same exact plan and the same exact model in entirely different ways to make money even though they might be similar they they'll be like entirely different right because we all have like our unique experience the things that we like to do and whatnot so I think we're going to see an explosion of that and I think that to me that's kind of what I really been waiting for

to see more at scale. I I've seen it here and there. Um I'd say the major I'm super curious what you guys have seen cuz I'd say over the last couple months the people that I think are making the most money with AI are people that are teaching you and selling you how to make the most money with AI. And like that's been probably the most profitable thing to do up until now. But it's like what like how do I you know we were talking about this before the call is like I'm now an algorithmic trader, right? Like I have like an algo that trades and like you know like we'll we'll see like the back test went good. I went live last week. I went like I was comfortable with it. Like I have no trading experience. I have no um developer experience, right?

Just my trading experience and like that's pretty cool you know like I you know like even 6 months ago I wasn't able to do that on my own. So uh I think we're going to be seeing explosion of this stuff. >> Yeah. So it's a good transition to the next story of you know Moonpay acquired Dawn uh which Dawn is an applied research lab focused on artificial intelligence and financial markets. So they have the Dawn CLI which is an AI native technology tool for trading. And so it enables anyone to build and deploy a trading strategy you know inside you know cloud code or or their agent. And I I think if you just take that framework of like how do people use AI to make money and does that usage drive adoption of new tools and new types of commerce.

We've talked a bit about like there are new people building businesses these like one-person companies uh that are going to be using a bunch of tools to do that. But then the other is this idea of like vibe trading and vibe investing, which is something like I don't know about you guys, but like yeah, I have a bunch of friends that are going really deep on how can you build a thesis and then execute that thesis into a portfolio literally having the AI say exactly what you could trade, which seems like it's like a new behavior in capital markets. No, how how are you seeing like this concept of vibe trading, investing, like what what that looks like?

>> Yeah, for sure. I mean I think it's a it sort of represents the next generation of wealth management. You know, I think that nowadays, um, you know, AI has gotten to the point where you can develop an entire thesis and strategy and then have it go and execute it. And then more importantly, as time goes on and more news and more information comes in, have it constantly evolve. Um, and so I think there's this convergence between the infrastructure that is supporting um, you know, what is agentic trading look like with also the models themselves getting better and being more productive and being able to actually execute on those strategies.

And so, you know, I think that in the next few years, we're going to see a significant amount of uh new types of investment, not only investment vehicles, but also just like retail people who are who are actively building out strategies and executing them uh using AI. >> Yeah. And Michael, these are like the customers that you're going after right now. And so I I feel like the the skeptic the skeptic in me would say like really retail traders, they're going to try and you just ask chat GPT what to trade? Like yeah, that sounds like a way to to lose money. like I is there a real like fundamental, you know, analysis opportunity that you're seeing people say, I'm going to build a long-term thesis. I'm going to get access to the right data and information to test that

thesis. Like, how much is there like a a real place for retail to play using these tools? Or is it just, you know, it's it's pretending like you're trading, but at the end of the day, it's this is gambling and speculation like everyone in crypto, you know, is is used to. Let's I think let's rewind for a second. Let's forget about agents for a minute. So when you're a retail trader or forget about research when you're a trader, you need three things really. You need a place to execute your trade. All right? You need the live feed of data so you know whether or not you're getting a good price. And then you need let's say the thesis, the opinion, what to buy, how to choose. Like I don't most

people don't know. And the reality is is that I have friends that don't use agents whatsoever, but what they will do is they will go to Chad GBT and they will say, "What stock should I buy?" And Matt Lavine, a very famous financial blogger, writes a lot about this. And what's so funny is what ends up happening is when you ask Chat GBT that like it doesn't have necessarily any sophisticated knowledge other than like all the stuff that it's learned from the internet on Reddit and Wall Street Bets. And so what ends up happening is you have a lot of these people going to chat GBT. They say, "What stock should I buy?" Matt Lavine says talks about this where chat will actually recommend everybody the same stock and then they'll go buy it and then it becomes

self-fulfilling, right? It's like everyone's getting recommended the same thing from chat because chat's just looking at what people are talking about on Reddit and then it's and everyone's buying it and then people are making money and all of a sudden, wow, this is like this amazing new agentic trading source, right? Um, of course though, I mean that's great because it's self-fulfilling, but that's not a a very serious way for somebody to trade, right? And so the more serious analysis, the people that are are are, you know, let's say at the big banks that are doing equity research or the new rise of the independent substack writers or newsletters that do deep deep deep financial anal analysis on their own, all of that stuff is behind payw walls.

And so one of the first questions that people ask me, I mean I I am a trader myself, but I have friends that want to get into it is they're always like, "Where do I start? How do I know what to buy?" Like I I don't even know what to do. They know they know how to download a trading app. They know how to get the real-time prices, but they have no idea where to start. And so part of what what we're focusing on here at least for Dripstack is we are focusing on these financial writers and the ability to synthesize across them because it's giving these people a better source than just going to chat and just saying like what's everyone talking about on Reddit with the caveat being there is a valid reason to do that. Like there's a lot of financial markets that are

self-fulfilling and so I completely understand that as like a totally viable strategy. At the same time, if you want to get more serious and sophisticated, you're you're going to need access to to these financial writers and specifically, you're going to want to synthesize across them because they are there are a lot of them. And so, even then, it's like, which one do I subscribe to? Who do I talk to? It's hard. It's too many decisions. G G, what is what does this mean for crypto trading? I feel like I can argue two different sides. I could argue that this is somewhat bad for crypto trading given that the like hot ball of speculative money is now going into equities and commodities and using agents to create like sophisticated strategies to invest

in space data centers and all sorts of like emerging tech. I could also argue that it's good for crypto trading because crypto, you know, exchanges like you said have lower barrier to entry. you could set up an automated strategy on hyperlquid and like it's harder to do that on some of the existing exchanges. Do you think that this like trend in vibe investing is going to drive more growth in volume of of people trading crypto again or is it really it's it's the crypto traders who are using these tools to trade traditional markets you know in other types of of assets? What what are you seeing? Um, I definitely think it's going to lead to an increase in crypto trading, but not necessarily in tokens and, you know, in equity,

stock, RWAS, PERS, whatever. Um, I I I've already found myself, even though, uh, structurally, you know, the first stuff I built out was for equities, um, just because I know there's a lot of liquidity there. I know exactly how that market works, but like I'm becoming more and more interested in trading stuff, you know, on crypto rails like through per and and stuff like that. Um, obviously the market's still not nearly as mature because it it just kind of got started within the last 12 months, but I I definitely think you're you're probably going to see that like I mean I think you already see that with equities and that you know now people are trading stocks in Asia, you know, um Korea just opened up to like US investors recently

and and all this stuff. And you see people that are are trading uh overnight in Asia that you know like I think before uh years ago when I used to trade I mean you needed to have like a pretty big institutional account in order to be set up to trade anywhere in Asia and I focus a lot on just US equities some some European but like I think it's becoming more and more global but I think that stuff is going to come on chain I think you just see you know ICE um NY all these all these exchanges you know trying to offer 24-hour trading uh 24/7.

I don't know if that's like the best idea because I do think that one of the things I liked uh when I was trading was being able to kind of, you know, close down on Friday afternoon and, you know, not have to worry about stuff until Sunday. Um and, you know, be at your desk and whatnot. So, I I think that like that's kind of needed for no burnout. But yeah, I mean I think we're we're going to we're going towards I for me like I think like the overall macro trend is we're going towards trading slashgambling on everything in a 247 environment, you know, and I think crypto set up specifically for that. Yeah. So Noah, do you see like when we think about

tokenized RWAs and while the technology of a blockchain can be more efficient than traditional ledgers, like what is the demand side driver of why would you purchase a tokenized version of a stock versus traditional version of the stock? Like is is AI going to be kind of part of that? and that there are just there new types of agentic asset management that work on tokenized stocks that don't work on traditional stocks like how do you see those those intersections coming together for sure. So I think there's an AI component but even taking a broader step back you know I think from from my point of view the growth of tokenized assets is going to largely come by as a byproduct or a second order effect of

the growth of stable coins. I think we're seeing that there is a whole new class of fintexs that are are providing access to dollars globally where people are getting paid in local currency. They're converting to a stable coin or or collecting directly into these fintech products and then they're using it to save value. Maybe they get a stable coin link card so that they can go and pay. And I think the next natural question that you ask is, you know, well, how can I use those funds to invest? And the easiest way to access um an investment product if you're holding a stable coin would be through something that sits on the same ledger. So I think that that is where a lot of the demand is going to come for tokenized assets is going to be an extension of of stablecoin um you know stablecoin native

fintex. However I think if you take the same argument and say well look you know if if every single um you know if if every agent has a wallet I think you get the same outcome where if every agent has a wallet then maybe it becomes more efficient and easier to to purchase tokenized assets than it would be to purchase a traditional asset as you would uh through a broker. So I I think there's a sim a similar impact between the two and and if you believe that stable coins are going to grow significantly then I think tokenized assets will will follow suit. >> Yeah. So we're going to move on to the next story in in a minute but but before we do I I can't help myself of what about NFTTS like Goney. Yeah. Michael, you you were I feel like we've been in

the NFT world, you know, for many years and like I'm still a believer that there's value in these digital JPEGs uh as the world has has moved on. Like I is there something around AI that makes NFTs interesting again? Yeah. At least as a technology like do you see any ways that that these come kind of back together? I I'll my views of this is pretty simple, which is that I never really thought about NFTTS as actually art or JPEGs. I mean, I've I've played around a lot in that space myself, and I completely get that, but it is still by far the best digital infrastructure for storing digital provenence and records

of of scarce ownership. Like, there are so many things about an NFT that are better than an ERC20. Um, I know this is not an NFT podcast, but like we could we could go into that. And so I feel like >> not many left. Not many NFT podcasts left man. >> Yeah, I I know. And so so if if if you're if you're an agent and you have a wallet and you're going to hold assets, some of those assets are going to be stable coins and some of those assets are going to be NFTTS. And that is just 100% going to happen in my in my head. I don't necessarily think that that has anything to do with the more, you know, JPEG art style NFT world, but like NFTs as infrastructure for a scarce digital asset is like absolutely going to be a part of this. Yeah. I mean, um, to build

on that, like I think NFTs are alive and well. I mean, how many hundreds of millions of dollars in volume has been done on Pokemon cards in the last month, right? Like those are NFTs whether people whether people agree with it or not or realize it. Like those are literally what NFTs are and a lot of that volume is being done on chain. So I think like at some point, you know, there there's going to be a resurgence of the NFT market. I think outside of stable coins, NFTts are probably the closest to consumer adoption crypto has ever come, you know, where people outside of the space are like, "Holy [ __ ] oh my god, this is really cool."

And so like, you know, I I I think it's going to come back at some point. I also think um I know uh there's one AI agent that purchased a crypto punk, but I think at some point in the future, you're going to see more and more, you know, for the same reason that humans kind of, you know, buy nice cars, watches, homes, cigars, all these things to kind of um flex and show status. Um there has to be a totally digital way for AI agents to also probably do the same. um even if it's not among themselves probably to show status to humans cuz they know that uh humans value it and you know what better way than like I you can't do it by like purchasing a car and then have it sit in the real world right like it's it has to

be a purely digital asset so I think we're going to see more and more of that uh and at some point it's going to be like something that clicks and then like you know I I think there's going to be a massive rush uh towards stuff like that >> yeah that that concept of the PFP or the profile pick, which was, you know, huge for a while with Cryptoun Punks and Board Apes. Like, most people don't need that many avatars or profile pictures themselves. Now, you see people that are like spinning up fleets of agents and, you know, it seems like a pretty common practice that they're giving agents names uh and identities and they're giving profile pictures. So, I found myself like, you know, creating PFPs for agents that I have on on Telegram. And I'm like, this actually makes more sense

than like, you know, having PFPs for for humans. So, uh it'll it'll be fun to see. But before we get into the last story, let's hear from the sponsors that made tokenize possible. >> This episode, if it isn't already obvious, is sponsored by our friends at Visa, the leader in digital payments. Visa's tokenized asset platform or VTAP uses smart contracts and cryptography to help banks bring fiat currencies onchain. Whether it's launching a stable coin or deposit tokens or something else, VAP allows financial institutions to issue fiatbacked tokens, improving financial efficiency and enabling

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With Fireblocks, you get complete control to build your own stable coin orchestration layer, create payment accounts, manage liquidity and access on and off ramps in over 60 currencies. Makes it easier for you to build and scale and expand your business globally. Learn more at fireblocks.com. All right, for our last story, Circle raises $222 million for ARC with A16Z, you know, crypto is the lead investor along with Black Rockck, Apollo, you know ICE uh internal exchange, uh, Standard Charter, uh, and Arc Investments. This is possibly or I I believe one of the first publicly listed

companies to launch a token separate from the company and raise money for it. So there there's like some really interesting kind of novel things that are happening here. Uh Noah A6Z crypto led the round. Can you talk more about you know your view on on ARC? Uh how you see the the potential there and this the structure? >> Yeah, for sure. So I mean I think just taking a step back like our general point of view is that stable coins have become one of if not the largest um you know products with with product market fit in crypto. Um you know stable coins are over $270 billion of supply.

Obviously Genius Act which got passed last summer provides regulatory clarity for stable coin issuance. Um you know we're seeing it being used in all kinds of different use cases whether it's uh crossber money movement B2B settlement. um you know it's it's it's clearly hit an inflection point and is has grown significantly and you know I think you know at least my point of view is that a lot of the next generation of crypto adoption is going to come a lot more from institutional adoption rather than just retail traders and I think you know in Kai you know this very well um you know through many conversations with banks and asset managers and fintexs you know there's I think a specific set of features that they you know demand or require in order to go on chain you

know, things like, you know, they don't want to pay gas in a volatile um, you know, crypto token. They'd rather pay in in in stable coins, something that's more reliable. They want, you know, high throughput, low fees. They want things like privacy. And so, you know, I think it's it's likely that with, you know, a lot of new institutions coming in, some of these more payment specific or institutional specific blockchains are likely to see a lot of growth. And so, you know, I think part of it is a, you know, a factor of the vision that they have and and what they're building towards, but also I think it's very much a bet on Circle themselves. You know, USDC is is one of the leading um regulated digital dollars globally. Um, you know, Jeremy and the entire team is great. I think that, you know, we think

they have an amazing vision for the company and um, you know, have been very thoughtful throughout the, you know, entirety of of building the business and, you know, so I I think a lot of it has to do with the the team and and how much we believe in them, but then also the where the direction of travel of where stable coins are going. >> Yeah. And congrats to the the the circle team. I I think to me one of the most interesting parts of ARC has been their focus on non USD stable coins uh and onchain FX which it's interesting that like it seems like circle made an explicit decision to say we're going to have USDC and Euro C and that's it like Circle is is not at least today you I'm not aware of you know any other nonUSD stable coin that that Circle has

created. So the question is are we going to live in a world that has every dollar come on chain and if circle's not going to be going and creating every dollar can arc become this ecosystem where USDC can be paired against you know other non-dollar stable coins and have this like instant you know onchain effect so I know Michael how do you guys think about non-doll stable coins like is there a role for them like do you view this as like we wake up 5 years from now and it's still 99.9% you know dollars and it's just everyone is using dollar stable coins or you know are there these use cases where you need a non-dollar and having chains like ARC you know

enabling some of the onchain FX you will will play a role I think about this from really two perspectives you know one is the broader macro question of like strength of the dollar and how that looks over the next 20 50 years and so like today it's the winner we have no idea what's going to happen you know what what the new currency of you know the inter intermediate currency for the transactions and liquidity will be in the world and so that might happen but honestly as a as an engineer and a developer building in the space I think about just one thing and it's and it's liquidity and so I'm building on stable coins and one of the reasons why I'm building on stable coins is it's actually not for the instant settlement

and it's not for the microtransactions because although we get all that for for free right it's actually the it's it's the integrations right the integrations with DeFi, it's the integrations with the yield source and all of that. And so if there's a world where there is another stable coin, maybe it's Euro C or something else that actually has a lot of liquidity and support across DeFi and and my users, I will be more than happy to to to integrate it. But right now, I'm just going where where the most liquidity is. And so that's and that's just more of like a technical, you know, go to market and and uh product roadmap type thing more than anything else. to to build on that. I think um I think kind of what we've seen um in most markets and especially like in

crypto and in stables is that um you know it's almost like a winner take all, right? And even within the stable coin market itself of US stables, right? It's just a few key players that that do like a ton of the volume and I think that that is going to continue for the most part for the foreseeable future. Um, I'm going to I'm going to butcher the thesis, but I remember reading something um a couple months ago uh early on in the administration um that was kind of like talking about how you know a lot of what you know Bessant and a lot of his uh uh cohorts have been working on is kind of like how do you how do you cement US dollar um >> like just dominance of the dollar across the world?

>> Dominance is the word. Dominance is the word, right? And like a lot of it right for the last like 40 50 years has been driven by the petro dollar and oil right because a lot of it settles uh in USD and you know kind of what they've been what the administration has taken is a lot of really proactive steps of how do you do that now for crypto because there's obviously a lot of crypto flows going in there you know a lot of demand for US treasuries is now coming for crypto I think uh crypto companies uh these US stable coins are I think at this point now the largest buyer of US treasury Y. So, you know, I I think the the to give this administration a lot of credit is I think they understood that really early and I think now a lot of

governments around the world are also starting to understand that. But, you know, exactly to what Michael was saying is like if I'm a developer creator in Africa, um I don't necessarily want my local currency because that might not have enough liquidity, but I know USD has a lot of liquidity and then I can pay almost all my expenses with that, right? So, it's almost, you know, liquidity begets more liquidity. And, you know, I think we'd have to see, you know, what what currency leads to long-term dominance is probably well out of definitely well out of crypto's control and is more of a thing of geopolitics. Um, that will play over the course of, you know, decades and centuries.

>> Yeah. No. What's what's your take on the the the reaction of there's still the question of like what do you do if you're government or central bank and you don't necessarily want to lose your monetary sovereignty. you don't want dollars, you know, taking over like what what are the options that they have? >> Yeah. Yeah. So, I I guess I'll answer that question by also kind of answering the previous question and and I'm going to say something that's like kind of crazy or controversial, but I actually think one of the the biggest use cases for local currency stable coins could actually be store value. And and the reason I say that is I was talking to uh you know I was in Miami for consensus last week and I I was talking to a founder who has a pretty big stable coin NEO bank in in multiple countries in

Latin America and they have uh local currency stable coins on their platform and and I was asking you know why like why what's the demand? Why do people want this? And he was saying that like the thing you have to understand is there are certain markets where the inflation is 5 6 7%. But the yield that you get on underlying treasuries is like 15%. And so by becoming the issuer of the stable coin, they can actually, you know, take local currency, invest that in treasuries, get a very significant amount of yield, and then pass the majority of that to their customers. And so, you know, I think when people think about holding local currency stable coins, they're worried that like this is going to devalue significantly. I'm going to lose a lot of money. But if you're able to actually capture the treasury yield and pass it on and as

long as the the spread between the yield you're providing and the uh inflation is is high, you could actually end up with a more stable or better product than holding US dollars themselves. So you know I think on the one hand there's opportunities for FX there's opportunities for crossber money movement but the reality is is that uh I think a lot of the the FX flows are going to be a form of banks who receive settlement in the form of stable coins and and I think they are going to have more liquidity due to interbank FX rates and just just the scale they have. I actually think sort of an extension of this banking as a service idea where you can now get better yield could also be a really big opportunity for local currency stable coins.

Yeah, super interesting. And and just democratizing access to treasury yield is like a really interesting concept that in a lot of emerging markets, I would imagine most day-to-day consumers are not holding treasuries. They're just holding currency if stable coins are basically tokenized treasuries. But then you have, you know, what does that mean for bank deposits and deposit flight in that market? Like there's there's a lot of fascinating things. So, a couple stories we didn't have time for. I want to run through quickly. Elliptic raises 120 million series D led by One Peak at a $670 million valuation. Congrats to to that team. A Bloomborg report says that Canton uh developer digital assets planning to raise $300 million at a $2 billion valuation. Uh Black Rockck JP

Morgan launch tokenized money market funds. Uh this is an interesting one. Coinbase becomes Hyperlid's official USDC treasury deployer as USDH sunsets. Uh and then turnkey, you know, raises you 12 a.5 million and round backed by Circle Ventures and Sequoia Capital. Uh congrats to Turnkey team. Uh big fans of of Bryce uh and and the folks there. Well, thank you so much for listening. Uh Michael, where can people find more about you? >> Yeah, so you could follow me on on X. So my handle is blowyoumind, my last name, your mind. And if you want to check out what we're working on with uh Aentic Payments and Aentic Commerce, it's uh dripstack.xyz. XYZ and try Drip is the is the X handle to to check it out and

learn more. >> And what about you Jeep? >> Uh you can find me on Goney NFT on all all social media platforms. >> And you Noah, >> uh Nvie 19 on X. >> And you can find me at Kai Sheffield on X and Visa.com/crypto. Uh if you haven't already, please subscribe to T tokenized on Apple, Spotify, or wherever you listen to your podcasts. If you enjoyed this this and you want more, leave us a review. really helps us. Uh, thank you all for listening and bye for now.