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…t in Europe will probably be different, very different in five years versus today. Oh, interesting. So you were saying we haven't seen MiCA enforcement yet and that will inform people's views of MiCA. Yes, exactly. The way that USDC is complying with the requirements are very different than the way local European issuers are complying with the requirements. The interesting delta, for us at least, was we saw European customers trying a lot more things under MiCA because at least they knew ostensibly where the lines were, which wasn't true before GENIUS. And now we're seeing that with GENIUS where people are willing to engage. So I would argue that compared to what existed before, which was no clarity and no willingness to engage, something is better than nothing. It's been very good for the European crypto. Totally. Yeah. You described Tether as a Zero100 hedge fund. I hadn't heard that before, but it feels to me that paying out 0% of the yield is not the long-term equilibrium when it comes to stablecoins. And so what happens to Tether? So I went to Kenya on holiday a year ago. Oh, it's very widespread in emerging markets today. And there was a poster that had a crypto app on it and there were two logos on it. It was Bitcoin, it was Tether. Yeah, I mean I think Tether is going to be wildly successful. I mean it already has been. It's arguably one— They seems to be doing okay for themselves. One of the most successful fintechs in the last three decades or something. But I think there will be and continue to be, I think there is this enormous network effect behind their business. That being said, I think that pretty soon in the next year, any consumer who wants access to the risk-free rate is going to have access to it.And I think that is going to create a sucking sound from some USDT, but I also think that it's going to take the market and expand it materially. What I hope happens is that USDT grows, but instead of it's at like 60-70% of the market, it becomes like 10% of the market. The alternative point is simply also, let's figure out the alternative. The reality is you can hold Tether or you can use 25%, you can lose 25% of your net worth every year by doing nothing. John (00:23:17): But no, I agree it's better. I'm just wondering what's the long-term competitive equilibrium like in five years, do you think Tether pays yield? No. Really? No. Just because that is their view, their worldview? I don't think they have to in order to stay dominant. The areas where Tether is most successful, which is in trading, there’s no need to pay yields back and the network effects there are really material. That being said, I think that the trading use case was 100% of the market two years ago, was 80% of the market today, and will be 5% of the market in some number of years. there are really material. That being said, I think that the trading use case was 100% of the market two years ago, was 80% of the market today, and will be 5% of the market in some number of years. We're talking about the international adoption of stablecoins. The way I've been explaining it to people is I feel like it's pretty common that you have very network effect-y products that are adopted first internationally and then come into the US. And so WhatsApp used to only be used internationally, and then it was used by Americans who were kind of cosmopolitan and had international friends or “I travel abroad a lot,” whatever. It's like if you have WeChat because you know people in China. And so for a while it was that, and now it's more mainstream in the United States and it's not totally broadly used, but it's pretty commonly used. That feels to me like the story of how stablecoins get adopted in the United States, where you start to see some of these network effects being used. Is that the case or will we just see other ways they're adopted? I think we are at least seeing a complete sigmoid in terms of where the adoption's happening. So you have these absolute whales, like apps and companies that have, call it 20,000 users, but the users are moving millions of dollars in assets through trading and investing and using stablecoins heavily in the US and elsewhere. And then on the other side you've got all— So the whales are the businesses or the customers? The traders. So you have very large US traders doing all this stuff. Exactly. And then on the other side, you've got much smaller consumers abroad and a much wider network that you're talking about. But I suspect you kind of see this, it's going to be a two-pronged strategy where it comes in through both ends. I think that's true, but I mean, I think right now we see the dynamic that you're mentioning, certainly playing out. And a great example of this is the Polymarkets of the world, like global markets built on top of stablecoins, they're now coming into the US. Those same markets are going to be stablecoin oriented and so people are going to be able to deposit from their bank accounts, but it's all going to land in stablecoins because you want one global market. And we're seeing the same thing with fintechs where you have folks who are expanding internationally, eventually you just want one dollar balance. You're not going to want many different dollar balances and I think that's definitely the case. I think that as we look at startups that are starting today, even if you were just serving the US market, it makes sense for you to build on stablecoins, for it's cheaper, it's much faster to go to market. But you also know that eventually you probably will want to go international and this is the foundation that enables you to do that. Everyone wants to be futureproof and stablecoins are the only way to do that. so know that eventually you probably will want to go international and this is the foundation that enables you to do that. Everyone wants to be futureproof and stablecoins are the only way to do that. Yes. Well, it's cool. As a European, at least as a French person, it always felt tough to see French startups because the market's too small and there's too many European differences. Selling to France doesn't mean you can sell it to Spain or Germany. And the US has never had that problem because the market is so big and it's kind of cool to see that at a fintech level, which is always kind of landlocked, playing out globally. Where there's just a much bigger opportunity if you can build a global business from day one. The other amazing dynamic is that the fintech ecosystem just overall has been very concentrated globally. In the US, we don't appreciate how many banks there are and how many of them are willing to support all these different crazy fintech ideas and how many of them have APIs and lending products or card products or what have you. But in some countries you go into a country, there's one bank and that bank has no interest in enabling you to build a fintech. And as a result, the consumers in that market see no advancement in their financial experiences. And so stablecoins represent the first opportunity for large swaths of the world. People in the US do not have a good mental model for how different the banking ecosystem in every other country is, because the US is so generous, it's like 5,000 banks or whatever the number is currently in the US. Whereas every other banking market has between three and eight banks and it's very concentrated and generally pretty steady. When we were talking to a bunch of founders in all these different markets, some of them would tell us, “Oh, we're getting our bank license in whatever country.” And in my mind I'm just like, “That's the equivalent of getting an MTL or something, whatever.” And in their mind they're like, “No, this is a huge deal” and now I have a much deeper appreciation. Who will build the successful neobank in the US? And was it going to be a single super app? Or is it actually going to get fragmented as there'll be more of them because it's— Okay. It sounds like you have a thesis here. Well, I think it's actually much more likely, to your point, that this is open sourcing the fintech stack. The reality is you actually get to pick and choose the layers at which you want to play. You can offer credit to your consumers or you can offer balances to your consumer. You can offer payments to your consumer, but you don't have to bundle all of them if you don't want to. So I think we'll see two things. We'll see. I would argue that today the closest things are, I guess, call it Robinhood and Cash App, are the closest things I see to a European style in the bank working in the US. I think gravity has shifted thanks to the sort of stuff that crypto has enabled and stablecoins have enabled. And I basically wonder if it's going to be singular platforms or if it's just going to become a part of the fabric of many more platforms.…

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