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…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. f 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. I think that will happen, but if you think concretely, if you measure new banking primacy as where does your paycheck get deposited? At least in my case, I moved to the US for college and when I was there freshman year in college, I set up a Bank of America account and my Stripe paycheck to this day is deposited in that Bank of America account. And in 10 years time, who are people getting their paychecks deposited into? I think that the market is going to, I think that these banks are still going to be really big. Same thing happened to me. I was on campus and someone gave me a free Duke t-shirt to sign up for a bank account and I still have that bank account. Is banking going to be as sticky as it was? If you have a lot more competition in the market, which is sensibly what this will engender. Well, what I think is going to happen, I think that most financial experiences are going to be rebuilt on blockchains. I think lending is going to be rebuilt on blockchains. I think obviously trading is going to be, I think saving is going to be, spending is going to be, I think a lot of these financial experiences are going to get rebuilt on blockchains and they will all compound each other to make the next generation of neobanks that are building on top of crypto wallets materially better across a bunch of different dimensions. And as a result, I think there will be a pretty material fragmentation of the market versus where it is today. And it's already relatively fragmented. A very hard day for us at Privy was SVB. A stressful set of very hard days. Zach (00:30:54): That was the first week we launched. Yeah, it was a long few days and we were asked by our backers to diversify risk a little bit more than we had. Until then it was our only bank account. And so we've been basically accounts at three different institutions. And at least the pitch for self-custody and crypto is to say the account is yours, the skin that you choose to take it through—meaning the UX of the actual sort of rails, the add-on services that you get—all of that will come through the sleeve that I guess you put the account in. But the account is yours and can be ported over and over and over again. So I think that's one of the big questions I'm interested in over the next decade: what is the split of custodial versus self-custodial accounts? yours and can be ported over and over and over again. So I think that's one of the big questions I'm interested in over the next decade: what is the split of custodial versus self-custodial accounts? So this is a very old timey analogy, but many people don't realize that Chase builds their own software, the big banks do. But if you bank with a credit union or a mid-size bank, they absolutely do not build their own banking software for the ledgering and managing the accounting, anything like that. And there's Fiserv, there's Jack Henry, there's First Data, there's a few companies like this who build the bank cores as they're known. And so the banks are actually a balance sheet and a credit strategy and a brand and various things, but in front of all this software that is provided by someone else. And so are you saying that your vision is that there's much more of that, where you can plug in the crypto equivalent of a bank? Again, this is like a total Trad Fi analogy, but you can plug in the crypto equivalent of a bank core into a neobank or maybe Uber and Lyft want to build this for their drivers or something like that. Is that basically your vision of where things go? That's I think the hope in many ways for where things should go or could go. I think it's very much an open question. It's a big part of where we feel at Privy that we have a responsibility to try to make sure that it's kind of an even playing field and there are good opportunities on both sides of the aisle. But yeah, I think that's exactly the point. I think the point would be the ledger is already public because it's on chain. The account is really cryptography, it's like private keys that people should be able to take with them and accordingly, you can move the banking core yourself as a consumer. And I think the Uber and Lyft analogy is at this point, a very tired crypto analogy. I'm pretty sure you've heard it, but the old crypto dream was what if Uber basically enabled you to have a different rating system based on where you were and a different pool of—the core network is shared, but then the actual app and delivery mechanism through which you have is something that you can build on top of much, much more easily. Yeah. Was that a woefully out of touch analogy for me showing just how— No, I've been trying to figure out how we explain self-custody because the only self-custodial asset is cash. And so it is very helpful actually to have more mental models for it. Okay, so we got one Guinness here. Go check out collect. Alright, this is just our regular NFC interface. So what payment method do you have there? I am paying with a Fuse card, which is backed by my stablecoin balance. It's a Visa card issued that is tethered to a balance on a USDC on Solana balance. Okay. So there is no bank account associated with this card. It is Visa backending to a Solana on chain balance. Exactly. Okay, let’s see if it works. Please be accepted. Sweet. You're good for it. How does the onchain transaction work? Does that happen in real time?…

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