The Stable Currency Inside - USDC Interview with Bridge Founder

By Payment 201

 

Zach Abrams, co-founder of Circle and co-founder of USDC, and founder of Bridge (now a member of Stripe), deconstructs the true story of the stable currency and the future of the original Internet currency。

They shared how to find product market matching (PMFs), how to survive early disruptions and how to build a financial infrastructure that could expand on a large scale. They also recalled the early days of the USDC — when the stable currency was completely unappreciated and the regulatory framework was not yet in place. Sean described how his belief in “currency at Internet speed” shaped a billions of dollars of assets. For its part, Zach reviewed Bridge's transition from NFT products to a stable currency infrastructure — as well as the changes in operations that had taken place following the addition of Stripe。

Together, they dismantled the following questions:
– Why would the stabilizer come to the moment
– What's a real product market match
- THE CHALLENGE OF BUILDING ENCRYPTION OR AI PRODUCTS IN A HIGHLY REGULATED ENVIRONMENT
– Why does the world need new bottom chains like Arc and Tempo
– How centralized, mobile moats and interoperability will shape the chain of blocks for the next decade
– WHAT IS THE FUTURE OF PROGRAMMABLE MONEY AND AI DRIVING FINANCIAL WORK FLOWS

whether you are the founder, builder interested in encryption, or someone who is trying to understand the direction of global payments, this conversation, recorded at the summit of the founders of a16z crypto, will give you insight from two masters who stand at the centre of industrial change。

Takeaways:
Stable currency is the only true “product market match” application in encryption

• STABLE CURRENCY IS THE ONLY PRODUCT THAT THE ENCRYPTION INDUSTRY HAS EVER REALLY FOUND。

Assets and exchanges do not count as “products” and the stabilization currency meets real needs: liquidity, cross-border movement of funds, dollar demand, etc。

• The success of USDC comes from DeFi's mobile moat, USDT from CEX's mobile moat。

It is extremely difficult to break through this moat。

• There will be thousands of “decorative deposits plus stable coins” in the future, but only a few have truly global influence。

ii. Why is the currency of stability now erupting? (Not technical, but regulatory and distribution)

• The biggest challenge was never technology, but regulatory licensing, partnership systems and compliance frameworks。

Circle spent years regulating education until the markets and policies of 2023-2024 matured。

• The Stabilisation Currency is moving away from the negative label of Crypto, especially in the field of AI Engineers, “Stabilization Currency Encryption Speculation”。
• the growth of the stable currency continues to come mainly from encrypted capital markets, but the "real payment case" is emerging:

1. Transfers
2. Export settlement
3. Wallet value (US$ held by people in developing countries)

but the scale is still very small (a few of the global payments have been made)。

Why is a new generation of basic chains (Arc, Tempo, etc.) necessary

• The existing block chains do not at all optimize payments。

Questions included:

1. wallet needs prefilling gas
2. Trade congestion at peak times
3. gas fluctuations
4. Default Open, Private

• The payment chain must have:

1. < 300 ms final settlement
2. Privacy
3. Dedicated access to meme coin/DeFi
4. Pay in the same currency (e.g. USDC pays US)

• AI grants-driven “automated payments” require entirely new infrastructure。

It's not realistic for AI angent to manage a bunch of chains to pay for gas。

• Arc (Circle) and Tempo (Stripe) are independent paths, but the common goal is to establish “Internet-level payment chains”。

It does not matter who succeeds if the payment can be changed from a “block block chain by-product” to a “native capacity”。

IV. THE REAL PMF: IT'S NOT AN EPIPHANY, IT'S AN ENDLESS STAIRWELL

• BUSINESS START-UPS ARE NOT AN INSTANT WITHOUT PMFS, BUT A STAIRWELL THAT ALWAYS RISES:

1. A CLIENT
2. FIVE CLIENTS
3. 1 MILLION INCOME
4. FINANCE PMF

• Even listed companies such as MongoDB continue to develop themselves, abandoning old businesses and embracing new products。

Success is multiple leaps, not ends。

• The founders will never feel that the company is “necessarily successful”。

Only employees feel that way。

V. Why did Stripe buy Bridge

• Stripe is a very small number of companies in the industry that really understand “stable currency’s future size”。

Zach thought, "No one will buy us until Stripe shows the same degree of faith."。

• Bridge's experience after the takeover is "two-speed world":

1. Increased daily complexity (processes, systems, compliance alignment)
2. Strategic speed x 10 acceleration (bank cooperation, distribution platform, business clients)

Once Stripe entered the stable currency issue and payment, it was in fact a major turning point for the stable currency。

Stablecoin→AI Money: The next infrastructure revolution

• AI WILL IMPLEMENT FINANCIAL FLOWS AND HUMAN BEINGS WILL BE RESPONSIBLE ONLY FOR MONITORING AND OPTIMIZING THEM。

Case:

1. Circe, the original compliance team is responsible for AML surveillance
2. Sean's new company uses full AI execution stream
3. Humans responsible for review and decision-making

• IN THE FUTURE, FINANCIAL INSTITUTIONS WILL NOT NEED A TEAM OF MORE THAN 1,000 PEOPLE, AND AI WILL RESTRUCTURE THE SIZE AND MODE OF OPERATION OF THE ORGANIZATION。

Text:
Moderator: Many of the people present should have used your product, Sean. When you designed USDC many years ago, you didn't see at all that it would be a good idea: zero interest rates, no business model, no clear market demand. What makes you believe that USDC can do it

Sean:
In fact, this should have come to light earlier than in 2017 — when I wrote the first edition of the White Paper and started writing code. When we created Circle in 2013, there was already a strong belief — we have always believed in “democratizing global finance on the Internet”。
We started with bitcoin, but then realized that what was really needed was a digital expression of government currency — trusted but capable of operating at the speed of the Internet。

SO WE CHOSE TO PUT THE DOLLAR FIRST ON THE ETHER. BUT IT WAS NOT A “ONE-CHAIN” CONCEPT FROM THE OUTSET, BUT RATHER A “MULTI-CHAIN, MULTI-ISSUER”, WHICH OPENED A “NEW WORLD IN WHICH MONEY OPERATES AT THE SPEED OF THE INTERNET”. THE MISSION OF USDC IS TO MAKE THIS VISION A REALITY。

Moderator:
Then why now? Why is the stabilization coin breaking today? When you did it, almost no one understood its value。

Sean:
Because at first it was a very difficult question。
The difficulty is not technology — although it was true that the infrastructure was not mature, the hardest part was the regulatory system:

• Regulatory barriers must be removed
• Need to find the right partner
• Need to build distribution channels

These factors are more critical than technical challenges。

We did not escape the difficulties, and we know that it must eventually be written into law, but that will take time. So we have devoted a lot of time to educating regulators about how this mechanism works. From an economic point of view, such as the Chicago Plan, which advocates the separation of currency creation from credit markets, a stable currency actually translates this idea into reality. We often discussed these issues with regulators, but this is bound to be a long-term strategy。

At very low interest rates in that period, people like Balaji helped us predict when Coinbase pushed USDC: it might take 10 years to become a real business model. Fortunately, it's faster than that。

Moderator:
When I was doing USDC with you in Coimbase, it felt more like a scientific experiment. No one knows what the business model is and how it's going to be used. The whole industry is far from mature today, and DeFi is almost non-existent. CryptoKitties may have just emerged, or may not have appeared. The whole ecology is very naive, and the last six or seven years of development have been about the stabilization currency. Your actions were completely counterproductive。

Sean:
Even within Circle, there is little support for USDC. We did a lot of things then. While we have strong guidelines on “Internet finance” in the direction, we are flexible on specific routes, especially early on when the prospects for hard communication to obtain payment plates from the states of the United States are uncertain。

WE TRIED SEVERAL PRODUCT EXPERIMENTS, STARTING WITH BITCOIN, AND THEN MOVING TO THE ETHER WORKSHOP (WHERE USDC IS ON LINE), AND WE KEPT THE BOTTOM CHAIN RELATIVELY NEUTRAL, REQUIRING IT TO SATISFY SOME KEY CHARACTERISTICS。
At the heart of our concerns has always been the programmable monetary layers that operate across multiple chains。

Moderator:
I have to tell a story. The day I went to your office in 2017, the market was falling。
(Zach: More specific
THAT DAY WAS A BLOODY BAPTISM, BUT TODAY IT'S A SMALL ONE. BITCOIN WENT DOWN FROM $20,000 TO ABOUT $600,000. I THOUGHT YOU'D CANCEL THE INTERVIEW OR THE SCENE WOULD BE IN A PANIC. I ENDED UP IN THE OFFICE, AND YOU GUYS WERE ON THE SAME PAGE. YOU SAY YOU HAVE OTC TRADING COUNTERS, AND IF PRICES FLUCTUATE, YOU CAN MAKE MONEY。

Sean:
By 2017, we had been going through four or five years, with numerous small crises. For example, there was no bank partner in the early days, except for Silicon Valley Bank, who was willing to open an account with us — just that day, I went to a Panel in the SVB, the same day the news of the Mt. Gox crash, the banker's reaction was to leave immediately. There are many such small crises, but if you have faith in something, you stick to it and you stay resilient, and you can do it long enough。

Moderator:
I want to talk about those difficult moments. But first let me ask Zach, your path is full of overlaps. Bridge began with NFT and was later transformed into a stable currency infrastructure. How did this happen

Zach:
Our journey is shorter than the Circle. It took Circle four or five years of exploration to find the final direction. We started starting businesses in 2022 when NFT broke down -- trying to get users to buy NFTs from a bank account. The process is to switch from bank deductions to stable currency to buy NFTs. It turns out it's a bad idea. But in doing this, we find it very difficult to build a product in a stable currency

Over time, we are increasingly convinced that a stable currency will become a core payment infrastructure, and that there is a need to address the complexity of “connecting the banking world to the stable currency world”。

BUT EVEN IF WE START GETTING CUSTOMERS, WE'RE STILL WONDERING IF WE'VE FOUND PMF. AFTER TWO OR THREE YEARS, WE'LL STILL ASK, "ARE WE REALLY PMF?"

Zach:
I'm curious -- when did Circle think that the stabilizer actually got a product-market match? Because there was a lot of use at the time, but there was no business model, so it wasn't a PMF. Now the company's on the market. Maybe you think there's a PMF。

Sean:
I have a potentially provocative point:
SO FAR, THROUGHOUT THE FIELD OF ENCRYPTION (ALTHOUGH STILL VERY EARLY IN A SENSE), I BELIEVE THAT THE ONLY REAL FIND OF THE "NOTABLE PMF" IS THE STABLE CURRENCY。

I do not think “assets” or “exchanges” are products. I know a lot of people disagree, but that's my point. However, the stabilization currency did not do so in the first place. It did take time。

The world's largest currency of stability (Tether), its mobile moat, comes from the encrypted capital markets of the Centralized Exchange. And USDC's mobile moat comes from DeFi。

but it's not early. i think it's about to accelerate from 2020 and then grow. while regulatory barriers remain, at least “how to cross” is beginning to appear. the next two biggest challenges to stabilization are:

• mobile moat
• interoperability

It is difficult to imagine the sudden emergence of a new dollar-stabilized currency across the existing moat, in the present ecological sense, unless there is a major change in industry. This may be a minority view, but it is indeed my current view。

Zach:
I think that there will be a lot of, a lot of, a lot of, a lot of different types of stability in the future. I don't know how many people can break through the moat, but most of them don't really need to。

Sean:
I agree. I think we can see in the future that as long as systems that can be accounted for — for example, digital account balances in traditional financial databases — can be “dinetized”. So in the future there will be thousands of different forms of “decorative deposits” and “stabilized coins”. But I also believe that there are only a few possibilities for true “important” — those who can cross the mobile moat and create a real scale effect。

beyond encrypted capital markets, payments and other use cases are also promoted. we have been talking about these things for many years, but it is not yet a mainstream use. but — we are now very close to achieving them. i've said that for the last seven years, but it's really close。

Zach:
I think we're very close, but it's still hard to say, “How early are we?” It now appears that the situation has stabilized, for example, with listed companies, and that the industry seems to have moved from a troubled cycle in the past to some linear growth. But in practice:

• Regulatory requirements are still not fully defined
• stabilized currency is only a very small part of global payments (a few basis points)
• In the United States banking system, the “size of deposits” of stable currency is almost negligible
• Non-United States dollar stable currency hardly exists
• Most banks and financial institutions are still completely out of touch with the stabilization currency
• The block chain itself is not yet optimized for real scale payments

So we're still very early。

Sean:
Fully agreed。

Moderator:
Sean, you mentioned that you think there are a lot of stables in the future. At present, Tether and Circle have pre-emptive advantages and occupy almost the entire market. Do you think this dominant pattern will be maintained

Sean:
Well, I have no special insight into the internal strategies of other companies (of course not). But I think that the current volume of stable currency transactions still comes mainly from encrypted capital markets. Although we do now see some real cross-border payment examples, for example:

• Remittance type payments
• Import/Export scene
• People hold dollars on their phones

These examples have emerged, but they are not significant in scale. So today's market pattern is determined by encrypted capital markets. More interestingly, when a stable currency actually opens up the core payment market, new players will emerge, with different distribution channels, partnerships and capacities. These new stabilizers will enter the new market in a completely different way, bringing new patterns。

I am optimistic. Every company has a different view of the stable currency:

• Concern was expressed about lower-end assets and investment returns
• Some people are concerned about product experiences
• some people say, "unfortunately, they did stabilize the coin." they even hate the word "stablecoin."

these are my favorite category, which they call “dollars” or “streaming dollars”。

Sean:
In my new start-up (AI + finance), the term “stable currency” has been avoided for a long time, as AI engineers reacted extremely negatively to “crypto”. I even think they're more anti-crypto than any other developer. After this summer, however, the situation began to change, with the stabilization currency gradually disassociating itself from the negative impression of crypto and gaining independent recognition. That's kind of interesting. We may not call it stablecoin in the future, but it seems to have become a brand。

Zach:
I think it's "stereotyped." But you can continue fighting。

Moderator:
Zach, I want to go back to PMF. For many entrepreneurs on the scene, they must be curious: how did you get through it? And how do you know, "We did it right?"

Zach:
I WOULD LIKE TO SAY THAT PMFS ARE OFTEN DESCRIBED AS A DIVIDING POINT:

• IT WAS A DESERT WITHOUT PMF
• And then it's a paradise

But that's not true at all. Bridge:

• We conceived the product
• BUILD API
• ONLINE API

I didn't feel PMF at that moment. And then the first client -- we don't know if he's gonna get bigger or feel the PMF. And then 5 clients, 10 clients... have a new one every month, but they're small teams in Latin America and Africa, and we don't know how big these clients are. Still not like PMF. We got $1 million in revenue. I looked at the client's portrait: a strange and messy group of companies. I am completely uncertain whether this will constitute a sustainable business. Still not PMF. We financed Series A. It only scares me more -- because I still don't think we have PMF。

Until I went to an event to listen to the CEO of MongoDB:

• Their company had $100 million in revenue when it was ready to be listed
• Amazon pushed the competition, and the whole market thought they'd die
• They watched their original core business disappear
• The company survived because of a small product that had a $1 million income
• It grew into a billion-dollar business

It made me realize:

Even listed companies are still experiencing the same “uncertainty and integrity” as entrepreneurs — but on a larger scale。

At that moment, I understood that entrepreneurship was not a point of reaching the PMF, but an endless stairmaster. You always ask:

• How do we get from $1 million to $5 million
• From 1 million users to 5 million
• Each stage is more difficult than the previous one
• Every step feels more life-and-death

Sounds a little self-absorbed, but it actually helps me a lot. Because it made me realize that the sense of uncertainty is not a sign of failure, but the essence of entrepreneurship. Even today, Bridge is inside Stripe, and I still feel that pressure every day。

Moderator:
So there's no easy path? All the way uphill

Zach:
Right. Maybe others have different experiences, but I do. I've been in a lot of big, successful companies before:

• Square
• Coinbase
• Brex

When I joined these companies as an employee, I felt that they “must succeed”. So I thought that there would be a moment when I felt that Bridge was bound to succeed。

But now Bridge is part of Stripe, and if a new person joins, they may feel that Bridge is “necessarily successful”. But as a founder, I will never feel that way. Because the founders have been thinking, "What's the next life or death that's gonna kill us?"

Moderator:
So how did you decide to jump from your stairwell to Stripe's stairwell? What made you decide to be bought

Zach:
First of all, we are not “selling companies”. I think the good company is not “selling itself”, but “buyed by others”. Moreover, frankly, I once believed 100 per cent that our company “cannot be acquired”. Because we have great faith in the future of the currency, we feel that it will be huge. And I can't even imagine:

• There's another company
• It's big enough to have resources
• There's also a strong belief in the currency
• And willing to invest heavily in this frontier

I don't think it's possible to find such a company -- even Stripe. I've just started looking for Stripe to be a client. I tried to get them to sign contracts and use our products. But they've been delaying。

But as I became more and more involved with John and Patrick, I became aware that: Their understanding of this area is strikingly consistent with ours. They see this as an important component of future payment infrastructure. They are also willing to invest enough resources。

At the same time, I found out that if we do this with Stripe, our chances of success will increase dramatically and move faster. Even faster than I expected. Examples:

• once the acquisition is complete, the whole industry is taking a big step forward on the adoption curve
• And our new product shows the world what a stable currency can do
• We launched Open issue platform, an independent corporate version of Bridge could never attract similar customers
• But becoming a part of Stripe will make it possible to work with big corporations and banks

This proves that joining Stripe is much more accelerated than I expected。

Moderator:
What has changed your life since the merger? What's the difference between Bridge's style of work, corporate culture and joining big companies

Zach:
they did force me to drink "cheeky pint." it's kind of a ceremonial act. back to the point, i summarised two phenomena:

(1) The day-to-day is actually harder
Although we are operating quite independently:

• We have our own office
• My own Slack
• If Stripe's employees want to trust me, they have to be introduced
• Google file privileges are not easily added to each other

We do “work like independent companies”. But day-to-day is more difficult than the period of independence, as:

• Get the bank partners
• construction of crypto infrastructure
• Build Wallet
• Production, client support

We have a lot of work to do with Stripe, for example:

• Our CRM needs access to Stripe's CRM
• Which entrance does the client come from
• The internal system needs to have the authority and process aligned
• Many business processes must be integrated in two directions

This makes daily life more complex. So, on a daily level, the pressure is as great as it is even greater。

(2) At macro level, however, the acceleration is huge
It would take years for Bridge to do something independently。
Now Stripe will be at the key node: speed up the whole business 10 times. For example:

that's how our card products are introduced

promulgating enterprise level

Large banks working together

stabilization platform

It's all part of Stripe. So at the macro level, the acquisitions put us on a faster track。

Moderator:
So you're still on the stairwell。

Zach:
Exactly。

Moderator:
Sean, you created Circe more than a decade ago, and now you're a new company in the AI era. What's the difference between the way you start a business and the way you did it

Sean:
Many places are different. But let's start with a “no change”: when we created Circe, we knew that finance was a highly regulated industry, so:

• We have to invest heavily in education
• The international regulatory landscape must be understood
• We have to know what's going to be written into the law

THE SAME IS TRUE FOR THE AI+ FINANCE SECTOR:

• YOU HAVE TO CONSIDER HOW AI'S WORK FLOWS AFFECT GLOBAL FINANCE
• YOU HAVE TO THINK ABOUT WHICH AI SECURITY STANDARDS WILL BECOME LAW
• YOU HAVE TO DEAL WITH THE POLITICAL GAME OF NATIONS ON THE LLM

These models are similar to the early days of Circe entrepreneurship。

But the real difference is that the way companies operate at the “tactical level” has changed dramatically。

For example, in Circle we have many wind control and compliance analysts:

• Monitoring money-laundering
• Case opened
• Collection of evidence
• SUBMISSION OF SUSPICIOUS ACTS REPORTS (SAR)

And now, in my new company, these processes are fully executed by AI angent
Human beings are responsible only for monitoring, adjusting and optimizing efficiency, so human roles change, but process efficiency is completely different. I can't imagine the size of a team that still needs to do the same thing today, if it's the size of a human being — it's about 1,200 now。

Moderator:
ONE THING THAT YOU JUST MENTIONED IS THAT IN THE EARLY DAYS OF THE INTERNET, PEOPLE SAY THAT THE INTERNET CHANGED ALL THE INDUSTRIES, ALL THE PRODUCTION METHODS, BUT THE ONLY THING THAT DIDN'T CHANGE WAS GDP. AND NOW AI IS: IT CLEARLY ENHANCES PERSONAL PRODUCTIVITY, BUT IT IS COMPLETELY INVISIBLE IN RECRUITMENT DATA. THIS IS PARTICULARLY EVIDENT IN SAN FRANCISCO, WHERE WE OBVIOUSLY FELT THAT:
Engineers' demand curves are literally " straight up to the sky."。

Sean:
Right。

Sean:
i do think that you can't build a financial institution by writing code. this still requires highly experienced engineers. but the way the engineer works is completely different:

• there's a different way of working for the principal inner
• architect works differently
• Development mode is different
• The tool chain is different

I also think that the university curriculum will be forced to change. But now the university has not kept up with this change. So I'm worried about students at the university:
They're actually learning a lot of content that is no longer relevant for the current computer science。

Moderator:
So what do you suggest they learn

Sean:
Drop out of business。

Moderator:
What if we don't drop out? What should I learn

Sean:
humanities, poetry. back to philosophy, political philosophy (poly sci), english. i'm not just saying -- it's really a hard question. this generation of students who are now at university will be most directly exposed to the impact of this era。

Moderator:
i must ask you a question before i conclude. you two are doing a new bottom chain:

• Circle do Arc
• Stripe do Tempo

Why does the world need a new bottom chain? Even two

Zach:
I'll start with Sean's opinion. It has been more than two years since we built the payment application on the block chain, and it has been clear from the outset that the existing block chain is not at all optimal for payment. This is manifested in many “large and small” places. For example:

a large new bank (neobank) has millions of users who want to use a particular chain。
If a wallet is to be made available to all users in this chain, each wallet must be pre-filled in gas to receive USDC. That alone would cost millions of dollars. And for example:

One of our first clients was a government agency, which had to pay assistance to a large number of individuals. It's a few thousand deals for the first time. But it took us 18 hours to complete the chain. These are the “big” problems that emerge from the “small” problems. There are also a few “real big questions”:

Privacy
The block chain is implicitly open, and core financial institutions cannot accept transparency in all transactions。

disconnected trade channels
how can we place a "core payment infrastructure" on a chain that is skyrocketed by a clearing storm or a meme coin trade explosion

All these issues point to the need for a chain of payments。

We hope that Tempo will address this issue as a stand-alone project. But if Arc does, we're happy。

Sean:
Fully agreed. If you add all these needs together, like:

• Must support <300 ms final settlement
• You have to protect your privacy
• we have to avoid taking blocks with meme coin
• When sending USDC, Gas should pay with USDC
• AI angent shouldn't manage multiple chains to pay the gas

We built it on Base and Solana before, but AI angent had to hold the right gas token, which is a question of reliability. So finally we realized that to truly unlock the new AI + money example, we need a chain designed for that purpose. Arc and Tempo may have different design centres, but they have the same objectives。

Zach:
the best thing about the whole industry is that a few years ago, we all wanted to solve the problem of “scaling up, lowering the gas, boosting the swallowing”

• VARIOUS L2
• Solana
• Aptos
• Sui
• Other new chains

It's an evolutionary process driven by creativity. The same creativity now occurs in the payment chain:

• Tempo
• Arc
• Plasma
• And other independent teams

One or more chains eventually prevail, which is good for the industry。

Moderator:
The last question: Decentrization has been the core value of encryption. Concern was expressed that the new payment chain would lead to a “centreized risk”. How do you convince them if you just say one word

Zach:
One sentence: if these chains are central, they will not succeed. No bank would be willing to base its payment infrastructure on the “chain of another bank”. Tempo, Arc succeeds and must be truly decentralised。

Sean:
In essence, we say that handing over the security of money to encryption is more reliable than giving it to a company or someone. To centralize vs. distribution and landing can be discussed -- but principles cannot change. No one uses a "corpo cain". So the answer is: Crypto over Corpo。

Moderator:
Thank you very much, Zach and Sean。