In this insightful episode of the Crypto Trailblazers series hosted by theCUBE, Mike Cagney of Figure Markets sits down with analysts from theCUBE Research to discuss groundbreaking advancements in blockchain technology and their implications for the finance sector. This video is part of the NYSE Wired digital event, aimed at bridging the gap between Silicon Valley and Wall Street by integrating technology and finance.
Cagney, an eminent figure in fintech, shares expertise on the transformative role of blockchain in financial markets during this interview. Conducted by seasoned analysts at theCUBE, the discussion delves into Figure’s innovative contributions, including their blockchain-native loan origination and securitization process. He outlines how Figure leverages blockchain to achieve cost reductions, enhanced security and improved liquidity in financial transactions.
Key takeaways from the interview highlight insights on the evolution of the Web3 ecosystem, such as the emergence of stablecoins as pivotal to transaction processes and the rise of decentralized finance (DeFi). Oltsik states these developments signify a shift towards democratizing finance, wherein truth and transparency are foundational. The conversation concludes with a look at Figure’s pioneering efforts in creating a new financial marketplace utilizing blockchain technology.
#CryptoTrailblazers #FigureMarkets #BlockchainInnovation #Web3 #NYEWired #BlockchainFinance #DecentralizedFinance #Fintech #Stablecoins
Find more SiliconANGLE news and analysis https://siliconangle.com/.
Follow theCUBE's wall-to-wall event coverage https://siliconangle.com/events/
Learn about the latest theCUBE events https://www.thecube.net/
00:00 - Intro
00:05 - Emerging Innovations in Financial Technology and Market Dynamics
02:45 - Key Elements in Financial Ecosystem Dynamics
06:20 - Blockchain: Truth and Transformation
09:39 - Shaping the Future: Innovations in Financial Markets and Stablecoin Integration
13:15 - Enabling the Future: Navigating Disruptions in Banking and Lending
16:51 - Exploring Opportunities and Building Confidence in the Blockchain Ecosystem
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Henri Stern, Privy
In this insightful episode of the Crypto Trailblazers series hosted by theCUBE, Mike Cagney of Figure Markets sits down with analysts from theCUBE Research to discuss groundbreaking advancements in blockchain technology and their implications for the finance sector. This video is part of the NYSE Wired digital event, aimed at bridging the gap between Silicon Valley and Wall Street by integrating technology and finance.
Cagney, an eminent figure in fintech, shares expertise on the transformative role of blockchain in financial markets during this interview. Conducted by seasoned analysts at theCUBE, the discussion delves into Figure’s innovative contributions, including their blockchain-native loan origination and securitization process. He outlines how Figure leverages blockchain to achieve cost reductions, enhanced security and improved liquidity in financial transactions.
Key takeaways from the interview highlight insights on the evolution of the Web3 ecosystem, such as the emergence of stablecoins as pivotal to transaction processes and the rise of decentralized finance (DeFi). Oltsik states these developments signify a shift towards democratizing finance, wherein truth and transparency are foundational. The conversation concludes with a look at Figure’s pioneering efforts in creating a new financial marketplace utilizing blockchain technology.
#CryptoTrailblazers #FigureMarkets #BlockchainInnovation #Web3 #NYEWired #BlockchainFinance #DecentralizedFinance #Fintech #Stablecoins
Find more SiliconANGLE news and analysis https://siliconangle.com/.
Follow theCUBE's wall-to-wall event coverage https://siliconangle.com/events/
Learn about the latest theCUBE events https://www.thecube.net/
00:00 - Intro
00:05 - Emerging Innovations in Financial Technology and Market Dynamics
02:45 - Key Elements in Financial Ecosystem Dynamics
06:20 - Blockchain: Truth and Transformation
09:39 - Shaping the Future: Innovations in Financial Markets and Stablecoin Integration
13:15 - Enabling the Future: Navigating Disruptions in Banking and Lending
16:51 - Exploring Opportunities and Building Confidence in the Blockchain Ecosystem
>> Hello, I'm John Furrier with theCUBE. We are here at theCUBE Studio in New York City at the New York Stock Exchange. This is our East Coast access point. Of course, we have our Palo Alto Studio connecting Silicon Valley and Wall Street, tech and money coming together. Henri Stern is here, CEO and co-founder of Privy. Kind of an AI blockchain... I'm sorry. Blockchain crypto infrastructure. I'm so hung up on AI. We'll get into the AI .
Henri Stern
>> That'll come next.
John Furrier
>> Henri, welcome to the Crypto Trailblazers where we feature the leaders. Congratulations on your recent connection with Stripe. Just closed in July. Congratulations.
Henri Stern
>> Thank you very much. I'm happy to be here.
John Furrier
>> I mean, you've been doing some pretty killer work. We'll get into it, but Stripe has been very aggressive on pushing the envelope on DeFi stable coins. Makes sense. They've been running all the payments for the internet-
Henri Stern
>> They have to reinvent-...
John Furrier
>> for years....
Henri Stern
>> payment rails. It's great.
John Furrier
>> So first question for you. Talk about the evolution and how you got to the point where Stripe leans in, you were partnering with them. Talk about the evolution. What brought you in together with Stripe? That transaction's pretty significant. It's a signal to the blockchain or decentralized infrastructure opportunity for developers, for money. There's a whole change over, rewiring of the financial system.
Henri Stern
>> Yeah. Maybe I'll take a step back and explain what Privy does and how we got here. So Privy builds embedded wallet infrastructure. What that means concretely is we let any developer use a simple API so they can spin up digital asset accounts in app, and let users basically securely manage, transact with, and generally access any on-chain ecosystem from DeFi for investments, for credit, for anything else, to simple transfers of stable coins for payments. You have to remember that I think before embedded wallets, getting any access to crypto meant downloading a third-party product, saving an mnemonic, not losing it, being afraid of getting hacked with your keys. It was very complicated and required a ton of activation energy on the end of the user. And for the developer building a product, you had to move your user off platform, which was very costly in terms of conversion, in terms of general product stickiness. And so there were really two worlds, crypto products and non-crypto products. What I think we saw was an opportunity of, if we can abstract some of the complexity of private key management away, if we can make it that any developer can build global bank accounts directly into their app, whether crypto is central to the app thesis, or whether it's just another feature set, then we can widely expand the types of products that can tap crypto rails and stable coin rails to give users basically access to instant global money. So that is what Privy does. We serve about 100 million accounts today across more than 1,500 developers. We move close to about $10 billion a month. Or at least our wallet infrastructure helps users move close to $10 billion a month. And basically as we were working on this, we saw a huge opportunity to move a lot faster by partnering with Stripe. In this case becoming a team within Stripe, running our product within it, to marry the fiat infrastructure that Stripe has built with this global account system that we have built in order to create new experiences for people building on these rails.
John Furrier
>> That's a great description. I'm glad you did that. I mean, you've got the crypto and non-crypto coming together. Stripe had the non-crypto nailed down. I like how you use the word wallet infrastructure. Because the way you talk about it, it's not a wallet. And again, the problem is totally true. I mean, everyone that's been in crypto, or even people coming in with new migration, their biggest fear is, okay, what if I lose my key, self-custody that's secure, I'm going to go to Coinbase. Oh, that's centralized. It's just a myriad of... The FUD is off the charts. So whether it's real or perceived, the perception is it's hard as hell.
Henri Stern
>> It's very complicated. Yeah.
John Furrier
>> So you bridged that. But you've mentioned wallet infrastructure because one of the things we've been seeing, and I want to get your thoughts on this, is that the decentralized or blockchain infrastructure, whatever you want to call it, is having a similar characteristics and scale as we saw with cloud. A little different way. But the developer market made cloud computing. So if you go distributed computing meets decentralized, it's a software system architecture. And having a wallet infrastructure is interesting because that becomes an element, a system element of the infrastructure. So what is a wallet infrastructure? Explain the definition. What does that actually mean?
Henri Stern
>> So broadly at its core, wallets are about secure key management. We want to enable users so any transaction on stable coin rails, on crypto rails starts, with a signature whereby a user, a business, an AI agent signifies that they want to take an action by signing something with a private key that they hold. So at its very core, wallets are key management infrastructure. This is applied cryptography where we want to enable a given owner of a wallet to securely manage their keys without having to think about the complexities like thereof. And this is the difference between traditional wallets and these embedded wallets that we built. But on top of this basically you need connections to the chain. So this is chain indexing, being able to read state from chain. So I just sent you $2 virtually. You being able to say, oh, I just received those assets. Can I get notified as a developer via webhook or something like that. So it's chain indexing, it's transaction submission, submitting the actual transaction on the correct chain. And then it's libraries to make access to the entire on-chain ecosystems, DeFi, and everything else much simpler. So that's how wallet infrastructure breaks down. And I think your analogy to the cloud is really good, by the way, because in a sense Stripe started with payments. But I think the ambition is to build really AWS for money. And we see wallets as an absolutely core building block like EC2 or S3, to how you actually build a full stack for managing money globally as a developer.
John Furrier
>> Yeah. And I think this is important because if you're going to be like the IaaS layer, infrastructure as a service, or in that analogy, you have to nail those building blocks. Like EC2 is the money maker for AWS. Everyone knows that. S3, you got to store stuff, queuing, . And those were the basic building blocks. Now they have higher level services. So okay, now we go into your world, wallet infrastructure, infrastructure, you get that abstracted away. And ultimately the developers now come in. This is where I think you're hitting the home run, is you're connecting the app world with infrastructure, I won't say nuance, maybe kind of like pain and suffering. And also the personas are different. I mean, someone's not going to nerd out on knowing which chain and the clearing of the software that it needs to handle under the hood. So most of , hey, I want to build an app. So I love how you're bridging that app piece. The question I have for you is, okay, if I'm on an app that can do all this, I like that. And I have Apple Pay, I love Apple Pay. I love Stripe and API. Connect that to my system. No problem paying that fee. But if you have an app and I'm a user, is the wallet tied to the app, or goes to my wallet? Or is this a native wallet for the app to manage the transaction? So is it a user feature, or is it an app feature? Can you break that down?
Henri Stern
>> It's a great question. And I would argue that it's actually much more of a spectrum than it is binary. And so in a sense, can imagine a world, and this is the world we're imagining, in which every app has a built-in global bank account. And so every app has a wallet in that regard. But also those wallets are tied to users. And so the goal for us is to make it completely seamless so that a user may have different accounts across the different apps that they use. We work, for example, with a neo bank called Majority. Majority enables on crypto rails, really fast payments between the US, Mexico, and Colombia. We work with a global payroll company called Toku. They enable any company to pay contractors abroad in stable coins so that, for example, a Nigerian contractor can receive dollars rather than naira and save in dollars. We work with a restaurant loyalty program called Blackbird that enables you to sign in at restaurants and earn loyalty points on digital asset rails. But the point is each of these has a separate account, but for you as the user, it should be seamless that all of these are your accounts and you can manage your assets across them in the same way that you manage your assets across a checking, a savings, and other accounts that you have.
John Furrier
>> So it means just hooking into the brain of... The wallet's like a bank brain and almost like a switch.
Henri Stern
>> I would argue that crypto is building an open banking stack. That's exactly what's happening, which is we're taking what historically has been a very verticalized set of infrastructure, and we are creating layers so any developer can tap into different segments to build value for their customers.
John Furrier
>> Yeah. You said before we came on camera open stack, it's an open stack for financial infrastructure.
Henri Stern
>> Exactly.
John Furrier
>> And I love the programmable money that's been kicked around for many, many years. We're kind of finally here. Talk about the impact of stable coins. Because I think there's going to be a tsunami of real-world assets on chain pretty quickly. We could debate the timeline on that because a couple shoes have to drop. This is one of them. Nailing the programmability for the developer, and then connecting to the plumbing. To me, those are the two things. What does that stack look like? Where are we in the progress? And real world assets could be anything. It could be this interview, it could be the rainforest. I mean we don't even know what it could be. I mean real world assets is anything that could be tokenized.
Henri Stern
>> Ultimately, and this is where I think for example, we're sitting in the New York Stock Exchange, ICE led an investment in Polymarket recently as a global market. So the definition of what a market is changes. But I think the really interesting thing that happens with real world assets is you now have access to a global pool of liquidity. Historically, if I wanted to buy Apple stock, I'm French, maybe France has good market makers that allow me to do so. But a lot of people anywhere in the world can't buy American stock. And so this is opening up basically access to these rails for everybody. So it starts probably with things like commodities and stocks, and things that historically have been tradable financial assets. But it'll move from there to things like you were saying, content or other things beyond it. I think where we're at in market development is the rails are finally here. Like we're seeing real volumes. Felix Pago is a company that's moving multiple percentage points of remittances in the US-Mexico corridor a year on their app, and it's via WhatsApp. So you can now basically send money to your family via WhatsApp, rather than having to go into a brick and mortar store and do the exchange with cash right there. And so I think we're seeing the deployment of this technology now. It's broadly opening up a much more competitive stack for financial services via remittances, via treasury management. And right now a lot of the focus is on early stable coin usage. So what can we do with a natively digital dollar? But I think from there it'll move to RWAs in the way you're saying.
John Furrier
>> Yeah, and I mentioned on the opening, I kind of flubbed and said AI infrastructure, which we've been covering. I want to get into the AI side of this because what you're basically saying is the distribution, well, the access and distribution of the transaction is not a monolith or a single entity. You now can unleash other mechanisms. It could be WhatsApp's a great example, WhatsApp's not in the payment rails business, but the developer can use that as a pipe between two parties.
Henri Stern
>> Exactly.
John Furrier
>> That's independent. Distribution used to be tied to the monolithic system.
Henri Stern
>> But this is the open stack. You can compose your stack now with the pieces that lead to the best customer experience in order to give people global money rails.
John Furrier
>> And AI coming in will make that more efficient. So what's your take on, as the infrastructure, the software abstractions, the primitives get stronger and more stable, and the building block level that you're working on, developers get ease of use, they can embed wallets and infrastructure capabilities for rails, payment and settlement. The plumbing gets kind of instrumented. That hits. That next level's going to be software agents and/or efficiencies. Either whether it's plumbing a WhatsApp route or Telegram or Reddit thread. I mean private transactions. I mean a lot of weird stuff's going to come down the pike.
Henri Stern
>> I think you're completely right. Maybe a story there is when you were working in crypto, call it between 2022 post-FTX and today, the idea of pitching crypto/AI is very scary because it feels like two-
John Furrier
>> Hyped up markets....
Henri Stern
>> extremely hyped up markets that you're cobbling together. But it feels kind of inevitable. If cards were unlocked by the internet, agents may unlock stable coin usage today. The stable coin market, to put in perspective, like two metrics to track is basically assets locked in. What is the amount of stable coin issued, that's a little over $300 billion today. And what is the amount of stable coin volume, that's a little over five trillion annually. A lot of this is trading today rather than payments. I think that'll change. But I think that number will get dwarfed by agentic payments over time. And so what we're going to see as agents come in is just a flurry of activity of machines making machine to machine payments. And this is a very good substrate for that to happen.
John Furrier
>> And I totally agree on the AI hype, and the agent hype is way off the charts. It's beyond recognition. But I think it's real. And I'll tell you why I'm there and I want to get your reaction to that. If you look at Nvidia, look at Jensen Huang's keynotes for the past three years. His whole premise was physical AI, meaning digital and physical converge. That's his entire thesis. And tokens and all this stuff he's doing is the networking is kind of the operating system. Networks are distributed systems, de-centralized distributed nodes and chains are distributed. So he's got some distribution where he actually says networking is the OS between super computing chips, aka, now the Blackwells and the systems. Also all the activity is either in omniverse and digital twins. So you're seeing the innovation on AI, the meat on the bone is simulation, synthetic data. So the real world and digital converging. I think here it's the same thing. Finance is real world digital, digital assets on chain, that's physical, digital. So the two physical, digital, I see an intersection. And if agents software, put the hype aside, it's just natural to go, oh, software's going to be key, agents and AI like stuff won't supersede the crypto infrastructure, it will be part of it.
Henri Stern
>> I completely agree. I think we'll see marriage, maybe I'll add two things to what you said. First commerce is fundamentally human in a sense, like part of physical real world interactions that obviously exist on the internet is being able to buy, sell, transact. And so I think basically step one is getting your agent to help you think through things and plan things, but obviously taking it to its logical conclusion, commerce should be opened up to that rail, and so I think it's going to be a part of that mix. The second point I think you're right is, historically, crypto has been kind of an island itself. It was a separate rail apart from traditional financial markets. And I think what we're seeing today is a marriage of the two where this open stack can be layered in to traditional markets, can be layered into other parts of the technology sort of space. And so I think we'll increasingly see crypto both as a culture onto itself but as also part and parcel of the digital rails that we use without people having to think about it. And this is obviously where we think embedded wallets have a huge role to play.
John Furrier
>> Yeah, I love that. Hang on. I want to ask you about the products in the financial stack. Or if you have an open stack for financial systems, stacks are open, things happen, an ecosystem developed. If you look at AWS, they never competed with their ecosystem, but they had their own versions of database. But Stripe is one of the major ecosystem players of AWS. They grew on that. My premise is that there'll be a massive ecosystem on top of what's enabled by the financial infrastructure. So the mainstream institutions, you have to think in two theaters, infrastructure enablement. How do I fit because they have a lot of money. And then their financial products. And then if they have financial products, they're going to turn into app integrated. So financial products will merge with applications in the decentralized way. So give me your thoughts on that. Because if I'm like JPMorgan or I'm Franklin Templeton or Fidelity, I'm thinking I better hire some PMs on this. But who do they hire?
Henri Stern
>> I mean you're seeing it. I was looking at job postings, and I saw digital assets PM at these traditional financial institutions. One example I love is I think Uber has built a very interesting economy onto itself today. I meet drivers that I talk to when I'm riding in an Uber, and they have financing for their cars via Uber as a platform. So Uber has moved beyond what it started off as, which was like a ride sharing marketplace, into being a financial unit that helps people get leasing for vehicles or credit for their purchases. Imagine any platform in the world can tap those rails without having to build the entire rest of the infrastructure. This is, I think, to your point about finance will merge into the apps itself because this is an open banking stack, you can tap into the different rails that you want, and offer parts of the system without needing to build the scale initially to do it. Uber can only do this because Uber is Uber. But now an upstart can actually build, for example, a way in which, through the app, somebody can get a lease or a loan in order to take some action, and they are tapping into liquidity pool that exists outside the app. So I think we're going to see a lot of emergent behaviors and emergent properties from this stack. And I think you're completely right, it's incumbent into financial institutions, we work with a lot of fintechs today, to both think about this from a how do we adapt our infrastructure to stay competitive, but also what are the features that we can give our customers access to that are going to make their lives a lot better?
John Furrier
>> So Henri, break this down for me because there's two things going on there. One point about the scale advantage. Uber, clearly they can't do that unless they have that scale. The institutions here have scale. So does that block out access? Because one benefit of crypto is the democratization. On the other hand, you have this other open scale of crypto infrastructure. How does an upstart compete when there's the Uber's scale like on the financial side?
Henri Stern
>> I think it does the exact opposite, which is to say I think it massively opens up access to competition.
John Furrier
>> Explain.
Henri Stern
>> What we're seeing with the customers that we serve, for example, we have on the one side, very large fintechs who are saying, we already move billions of dollars a year, or we hold assets for users that we enable to do things with. And using this technology, we can unlock new functionality. We can unlock better rates for our users. We can unlock more efficient market making. We can unlock instant global payments that work nights and weekends. Crazy that we're not able to do that yet. And they are seeing real benefits that will help them because of their scale. It has a direct impact on their bottom line, and how good their products are. Conversely, we're seeing five person team startups being able to build products that are competitive with the mastodons of the world, even though they have small teams and they're just getting started. One of our customers is an amazing product in DeFi called Hyperliquid. Hyperliquid is, to my knowledge, a 15 person team. They started three years ago. They earned about a trillion dollars in volume, trading volume as a perps exchange to date. They move anywhere from 10 to $15 billion a day in volume. And they're heavily competing against a number of established players and providing an alternate rail for people. So this is what the market is enabling, the emergence of, call it, crypto super apps on the one side built from scratch. And what would've taken a decade has now taken a few months. And real value to existing players who can provide better services for their customers.
John Furrier
>> I want to get your thoughts. First of all, great commentary. I would throw in something that might be an analogy. The proprietary mini computers had scale, the open web changed everything. So anyone can put a website out and get that scale instantly. So that's what you're saying. You're saying the openness and scale of the infrastructure.
Henri Stern
>> But I think your point, your comparison to the cloud is really good. Which is to say, let's go back to 2006. AWS starts. You have a lot of players out there who have built defensibility by actually having their own data infrastructure, running their own servers. Now you get the ability for a number of startups, and you see it in the wave of companies that arose at that time, who can actually build without needing to build out their own server farms or run their own machines. Insane opening up of the market and enablement of the internet ecology that we have today. This is Airbnb, this is Uber. These are all these apps that come out.
John Furrier
>> They would not exist without Amazon.
Henri Stern
>> They could not. But conversely, you see it for traditional businesses who maybe were like, oh, we're going to be on prem for a long time. Ultimately moving to the cloud enables them to ship faster, enables them to have better cost structures. So I think it is both. And this is why, in a sense, I see this as whatever the opposite of zero sum is, it's a very positive-sum movement where this just opens up new markets and opportunities.
John Furrier
>> That's awesome. I totally agree with you. And I think this is why I love this market right now because it feels like nerdy geeky infrastructure on one end, and then just massive money-making opportunities with just good products. So you got kind of the best of both worlds.
Henri Stern
>> I completely agree. And this is where at least we're really excited about our work as part of Stripe. Which is Stripe has spent their entire lifetime making complex things simple. Getting payments on the internet sounds very simple, but it was not. And I think the reality is we still have a lot of work to do on the crypto-infrastructure side to make this absolutely seamless for users. And this is where we think this is a really good marriage actually.
John Furrier
>> Yeah, and we've got a lot of trading going on down there. You can hear us. We're above the option floor. It's getting pretty active .
Henri Stern
>> I love it. I love it.
John Furrier
>> Outcry still. They'll tokenize this soon. So I love the Polymarket comment. We'll end on that. And talk about your vision going forward. Now, part of Stripe, which is not sitting on their hands. They're leaning in, they're making some big moves. Always loved that company from day one. Just a simple, as you said, simple value proposition, one-click API connect, and you've got rails. What's your focus now in terms of your vision as you look at the world we're navigating into?
Henri Stern
>> There's probably two prongs. We are dead focused on real-world utility. Ultimately we want to take up this infrastructure to make Stripe users' lives easier. And in this case to power Privy users, Bridge users. This is another company in the space that Stripe acquired, their lives easier by building more powerful products. So dead focused on real world utility through these rails. And really it means two things. One, how can we add these rails to build an even better experience for Stripe users? How can we enable basically global money movement, open up new markets, enable instant payments at a cheaper price? And then on the second front is how do we basically build the tooling so people can run away with it and have these emergent properties that you're talking about. So I think the vision is a world in which every app has a built-in bank account, and that bank account is interconnected with the entirety of the world's other fiat rails.
John Furrier
>> It's legit next level app-to-money system connection, which-
Henri Stern
>> That's the hope....
John Furrier
>> just like bridging apps. And apps for everything now. They're bigger apps too. A bank is an app. Henri, thanks for coming on the Crypto Trailblazers.
Henri Stern
>> Thank you so much for having me.
John Furrier
>> Henri's here with Privy. Again, Crypto Trailblazers. Building the system where it's going to require developers and the infrastructure that has to have scale, stability, and credibility, and of course confidence. And as that continues to thunder away, you're going to see a tsunami of entrepreneurs, new apps connected in with the money system. Of course, we're doing our job to connect you with the best here at Crypto Trailblazers. I'm John Furrier, the host. Thanks for watching.
>> Hello, I'm John Furrier with theCUBE. We are here at theCUBE Studio in New York City at the New York Stock Exchange. This is our East Coast access point. Of course, we have our Palo Alto Studio connecting Silicon Valley and Wall Street, tech and money coming together. Henri Stern is here, CEO and co-founder of Privy. Kind of an AI blockchain... I'm sorry. Blockchain crypto infrastructure. I'm so hung up on AI. We'll get into the AI .
Henri Stern
>> That'll come next.
John Furrier
>> Henri, welcome to the Crypto Trailblazers where we feature the leaders. Congratulations on your recent connection with Stripe. Just closed in July. Congratulations.
Henri Stern
>> Thank you very much. I'm happy to be here.
John Furrier
>> I mean, you've been doing some pretty killer work. We'll get into it, but Stripe has been very aggressive on pushing the envelope on DeFi stable coins. Makes sense. They've been running all the payments for the internet-
Henri Stern
>> They have to reinvent-...
John Furrier
>> for years....
Henri Stern
>> payment rails. It's great.
John Furrier
>> So first question for you. Talk about the evolution and how you got to the point where Stripe leans in, you were partnering with them. Talk about the evolution. What brought you in together with Stripe? That transaction's pretty significant. It's a signal to the blockchain or decentralized infrastructure opportunity for developers, for money. There's a whole change over, rewiring of the financial system.
Henri Stern
>> Yeah. Maybe I'll take a step back and explain what Privy does and how we got here. So Privy builds embedded wallet infrastructure. What that means concretely is we let any developer use a simple API so they can spin up digital asset accounts in app, and let users basically securely manage, transact with, and generally access any on-chain ecosystem from DeFi for investments, for credit, for anything else, to simple transfers of stable coins for payments. You have to remember that I think before embedded wallets, getting any access to crypto meant downloading a third-party product, saving an mnemonic, not losing it, being afraid of getting hacked with your keys. It was very complicated and required a ton of activation energy on the end of the user. And for the developer building a product, you had to move your user off platform, which was very costly in terms of conversion, in terms of general product stickiness. And so there were really two worlds, crypto products and non-crypto products. What I think we saw was an opportunity of, if we can abstract some of the complexity of private key management away, if we can make it that any developer can build global bank accounts directly into their app, whether crypto is central to the app thesis, or whether it's just another feature set, then we can widely expand the types of products that can tap crypto rails and stable coin rails to give users basically access to instant global money. So that is what Privy does. We serve about 100 million accounts today across more than 1,500 developers. We move close to about $10 billion a month. Or at least our wallet infrastructure helps users move close to $10 billion a month. And basically as we were working on this, we saw a huge opportunity to move a lot faster by partnering with Stripe. In this case becoming a team within Stripe, running our product within it, to marry the fiat infrastructure that Stripe has built with this global account system that we have built in order to create new experiences for people building on these rails.
John Furrier
>> That's a great description. I'm glad you did that. I mean, you've got the crypto and non-crypto coming together. Stripe had the non-crypto nailed down. I like how you use the word wallet infrastructure. Because the way you talk about it, it's not a wallet. And again, the problem is totally true. I mean, everyone that's been in crypto, or even people coming in with new migration, their biggest fear is, okay, what if I lose my key, self-custody that's secure, I'm going to go to Coinbase. Oh, that's centralized. It's just a myriad of... The FUD is off the charts. So whether it's real or perceived, the perception is it's hard as hell.
Henri Stern
>> It's very complicated. Yeah.
John Furrier
>> So you bridged that. But you've mentioned wallet infrastructure because one of the things we've been seeing, and I want to get your thoughts on this, is that the decentralized or blockchain infrastructure, whatever you want to call it, is having a similar characteristics and scale as we saw with cloud. A little different way. But the developer market made cloud computing. So if you go distributed computing meets decentralized, it's a software system architecture. And having a wallet infrastructure is interesting because that becomes an element, a system element of the infrastructure. So what is a wallet infrastructure? Explain the definition. What does that actually mean?
Henri Stern
>> So broadly at its core, wallets are about secure key management. We want to enable users so any transaction on stable coin rails, on crypto rails starts, with a signature whereby a user, a business, an AI agent signifies that they want to take an action by signing something with a private key that they hold. So at its very core, wallets are key management infrastructure. This is applied cryptography where we want to enable a given owner of a wallet to securely manage their keys without having to think about the complexities like thereof. And this is the difference between traditional wallets and these embedded wallets that we built. But on top of this basically you need connections to the chain. So this is chain indexing, being able to read state from chain. So I just sent you $2 virtually. You being able to say, oh, I just received those assets. Can I get notified as a developer via webhook or something like that. So it's chain indexing, it's transaction submission, submitting the actual transaction on the correct chain. And then it's libraries to make access to the entire on-chain ecosystems, DeFi, and everything else much simpler. So that's how wallet infrastructure breaks down. And I think your analogy to the cloud is really good, by the way, because in a sense Stripe started with payments. But I think the ambition is to build really AWS for money. And we see wallets as an absolutely core building block like EC2 or S3, to how you actually build a full stack for managing money globally as a developer.
John Furrier
>> Yeah. And I think this is important because if you're going to be like the IaaS layer, infrastructure as a service, or in that analogy, you have to nail those building blocks. Like EC2 is the money maker for AWS. Everyone knows that. S3, you got to store stuff, queuing, . And those were the basic building blocks. Now they have higher level services. So okay, now we go into your world, wallet infrastructure, infrastructure, you get that abstracted away. And ultimately the developers now come in. This is where I think you're hitting the home run, is you're connecting the app world with infrastructure, I won't say nuance, maybe kind of like pain and suffering. And also the personas are different. I mean, someone's not going to nerd out on knowing which chain and the clearing of the software that it needs to handle under the hood. So most of , hey, I want to build an app. So I love how you're bridging that app piece. The question I have for you is, okay, if I'm on an app that can do all this, I like that. And I have Apple Pay, I love Apple Pay. I love Stripe and API. Connect that to my system. No problem paying that fee. But if you have an app and I'm a user, is the wallet tied to the app, or goes to my wallet? Or is this a native wallet for the app to manage the transaction? So is it a user feature, or is it an app feature? Can you break that down?
Henri Stern
>> It's a great question. And I would argue that it's actually much more of a spectrum than it is binary. And so in a sense, can imagine a world, and this is the world we're imagining, in which every app has a built-in global bank account. And so every app has a wallet in that regard. But also those wallets are tied to users. And so the goal for us is to make it completely seamless so that a user may have different accounts across the different apps that they use. We work, for example, with a neo bank called Majority. Majority enables on crypto rails, really fast payments between the US, Mexico, and Colombia. We work with a global payroll company called Toku. They enable any company to pay contractors abroad in stable coins so that, for example, a Nigerian contractor can receive dollars rather than naira and save in dollars. We work with a restaurant loyalty program called Blackbird that enables you to sign in at restaurants and earn loyalty points on digital asset rails. But the point is each of these has a separate account, but for you as the user, it should be seamless that all of these are your accounts and you can manage your assets across them in the same way that you manage your assets across a checking, a savings, and other accounts that you have.
John Furrier
>> So it means just hooking into the brain of... The wallet's like a bank brain and almost like a switch.
Henri Stern
>> I would argue that crypto is building an open banking stack. That's exactly what's happening, which is we're taking what historically has been a very verticalized set of infrastructure, and we are creating layers so any developer can tap into different segments to build value for their customers.
John Furrier
>> Yeah. You said before we came on camera open stack, it's an open stack for financial infrastructure.
Henri Stern
>> Exactly.
John Furrier
>> And I love the programmable money that's been kicked around for many, many years. We're kind of finally here. Talk about the impact of stable coins. Because I think there's going to be a tsunami of real-world assets on chain pretty quickly. We could debate the timeline on that because a couple shoes have to drop. This is one of them. Nailing the programmability for the developer, and then connecting to the plumbing. To me, those are the two things. What does that stack look like? Where are we in the progress? And real world assets could be anything. It could be this interview, it could be the rainforest. I mean we don't even know what it could be. I mean real world assets is anything that could be tokenized.
Henri Stern
>> Ultimately, and this is where I think for example, we're sitting in the New York Stock Exchange, ICE led an investment in Polymarket recently as a global market. So the definition of what a market is changes. But I think the really interesting thing that happens with real world assets is you now have access to a global pool of liquidity. Historically, if I wanted to buy Apple stock, I'm French, maybe France has good market makers that allow me to do so. But a lot of people anywhere in the world can't buy American stock. And so this is opening up basically access to these rails for everybody. So it starts probably with things like commodities and stocks, and things that historically have been tradable financial assets. But it'll move from there to things like you were saying, content or other things beyond it. I think where we're at in market development is the rails are finally here. Like we're seeing real volumes. Felix Pago is a company that's moving multiple percentage points of remittances in the US-Mexico corridor a year on their app, and it's via WhatsApp. So you can now basically send money to your family via WhatsApp, rather than having to go into a brick and mortar store and do the exchange with cash right there. And so I think we're seeing the deployment of this technology now. It's broadly opening up a much more competitive stack for financial services via remittances, via treasury management. And right now a lot of the focus is on early stable coin usage. So what can we do with a natively digital dollar? But I think from there it'll move to RWAs in the way you're saying.
John Furrier
>> Yeah, and I mentioned on the opening, I kind of flubbed and said AI infrastructure, which we've been covering. I want to get into the AI side of this because what you're basically saying is the distribution, well, the access and distribution of the transaction is not a monolith or a single entity. You now can unleash other mechanisms. It could be WhatsApp's a great example, WhatsApp's not in the payment rails business, but the developer can use that as a pipe between two parties.
Henri Stern
>> Exactly.
John Furrier
>> That's independent. Distribution used to be tied to the monolithic system.
Henri Stern
>> But this is the open stack. You can compose your stack now with the pieces that lead to the best customer experience in order to give people global money rails.
John Furrier
>> And AI coming in will make that more efficient. So what's your take on, as the infrastructure, the software abstractions, the primitives get stronger and more stable, and the building block level that you're working on, developers get ease of use, they can embed wallets and infrastructure capabilities for rails, payment and settlement. The plumbing gets kind of instrumented. That hits. That next level's going to be software agents and/or efficiencies. Either whether it's plumbing a WhatsApp route or Telegram or Reddit thread. I mean private transactions. I mean a lot of weird stuff's going to come down the pike.
Henri Stern
>> I think you're completely right. Maybe a story there is when you were working in crypto, call it between 2022 post-FTX and today, the idea of pitching crypto/AI is very scary because it feels like two-
John Furrier
>> Hyped up markets....
Henri Stern
>> extremely hyped up markets that you're cobbling together. But it feels kind of inevitable. If cards were unlocked by the internet, agents may unlock stable coin usage today. The stable coin market, to put in perspective, like two metrics to track is basically assets locked in. What is the amount of stable coin issued, that's a little over $300 billion today. And what is the amount of stable coin volume, that's a little over five trillion annually. A lot of this is trading today rather than payments. I think that'll change. But I think that number will get dwarfed by agentic payments over time. And so what we're going to see as agents come in is just a flurry of activity of machines making machine to machine payments. And this is a very good substrate for that to happen.
John Furrier
>> And I totally agree on the AI hype, and the agent hype is way off the charts. It's beyond recognition. But I think it's real. And I'll tell you why I'm there and I want to get your reaction to that. If you look at Nvidia, look at Jensen Huang's keynotes for the past three years. His whole premise was physical AI, meaning digital and physical converge. That's his entire thesis. And tokens and all this stuff he's doing is the networking is kind of the operating system. Networks are distributed systems, de-centralized distributed nodes and chains are distributed. So he's got some distribution where he actually says networking is the OS between super computing chips, aka, now the Blackwells and the systems. Also all the activity is either in omniverse and digital twins. So you're seeing the innovation on AI, the meat on the bone is simulation, synthetic data. So the real world and digital converging. I think here it's the same thing. Finance is real world digital, digital assets on chain, that's physical, digital. So the two physical, digital, I see an intersection. And if agents software, put the hype aside, it's just natural to go, oh, software's going to be key, agents and AI like stuff won't supersede the crypto infrastructure, it will be part of it.
Henri Stern
>> I completely agree. I think we'll see marriage, maybe I'll add two things to what you said. First commerce is fundamentally human in a sense, like part of physical real world interactions that obviously exist on the internet is being able to buy, sell, transact. And so I think basically step one is getting your agent to help you think through things and plan things, but obviously taking it to its logical conclusion, commerce should be opened up to that rail, and so I think it's going to be a part of that mix. The second point I think you're right is, historically, crypto has been kind of an island itself. It was a separate rail apart from traditional financial markets. And I think what we're seeing today is a marriage of the two where this open stack can be layered in to traditional markets, can be layered into other parts of the technology sort of space. And so I think we'll increasingly see crypto both as a culture onto itself but as also part and parcel of the digital rails that we use without people having to think about it. And this is obviously where we think embedded wallets have a huge role to play.
John Furrier
>> Yeah, I love that. Hang on. I want to ask you about the products in the financial stack. Or if you have an open stack for financial systems, stacks are open, things happen, an ecosystem developed. If you look at AWS, they never competed with their ecosystem, but they had their own versions of database. But Stripe is one of the major ecosystem players of AWS. They grew on that. My premise is that there'll be a massive ecosystem on top of what's enabled by the financial infrastructure. So the mainstream institutions, you have to think in two theaters, infrastructure enablement. How do I fit because they have a lot of money. And then their financial products. And then if they have financial products, they're going to turn into app integrated. So financial products will merge with applications in the decentralized way. So give me your thoughts on that. Because if I'm like JPMorgan or I'm Franklin Templeton or Fidelity, I'm thinking I better hire some PMs on this. But who do they hire?
Henri Stern
>> I mean you're seeing it. I was looking at job postings, and I saw digital assets PM at these traditional financial institutions. One example I love is I think Uber has built a very interesting economy onto itself today. I meet drivers that I talk to when I'm riding in an Uber, and they have financing for their cars via Uber as a platform. So Uber has moved beyond what it started off as, which was like a ride sharing marketplace, into being a financial unit that helps people get leasing for vehicles or credit for their purchases. Imagine any platform in the world can tap those rails without having to build the entire rest of the infrastructure. This is, I think, to your point about finance will merge into the apps itself because this is an open banking stack, you can tap into the different rails that you want, and offer parts of the system without needing to build the scale initially to do it. Uber can only do this because Uber is Uber. But now an upstart can actually build, for example, a way in which, through the app, somebody can get a lease or a loan in order to take some action, and they are tapping into liquidity pool that exists outside the app. So I think we're going to see a lot of emergent behaviors and emergent properties from this stack. And I think you're completely right, it's incumbent into financial institutions, we work with a lot of fintechs today, to both think about this from a how do we adapt our infrastructure to stay competitive, but also what are the features that we can give our customers access to that are going to make their lives a lot better?
John Furrier
>> So Henri, break this down for me because there's two things going on there. One point about the scale advantage. Uber, clearly they can't do that unless they have that scale. The institutions here have scale. So does that block out access? Because one benefit of crypto is the democratization. On the other hand, you have this other open scale of crypto infrastructure. How does an upstart compete when there's the Uber's scale like on the financial side?
Henri Stern
>> I think it does the exact opposite, which is to say I think it massively opens up access to competition.
John Furrier
>> Explain.
Henri Stern
>> What we're seeing with the customers that we serve, for example, we have on the one side, very large fintechs who are saying, we already move billions of dollars a year, or we hold assets for users that we enable to do things with. And using this technology, we can unlock new functionality. We can unlock better rates for our users. We can unlock more efficient market making. We can unlock instant global payments that work nights and weekends. Crazy that we're not able to do that yet. And they are seeing real benefits that will help them because of their scale. It has a direct impact on their bottom line, and how good their products are. Conversely, we're seeing five person team startups being able to build products that are competitive with the mastodons of the world, even though they have small teams and they're just getting started. One of our customers is an amazing product in DeFi called Hyperliquid. Hyperliquid is, to my knowledge, a 15 person team. They started three years ago. They earned about a trillion dollars in volume, trading volume as a perps exchange to date. They move anywhere from 10 to $15 billion a day in volume. And they're heavily competing against a number of established players and providing an alternate rail for people. So this is what the market is enabling, the emergence of, call it, crypto super apps on the one side built from scratch. And what would've taken a decade has now taken a few months. And real value to existing players who can provide better services for their customers.
John Furrier
>> I want to get your thoughts. First of all, great commentary. I would throw in something that might be an analogy. The proprietary mini computers had scale, the open web changed everything. So anyone can put a website out and get that scale instantly. So that's what you're saying. You're saying the openness and scale of the infrastructure.
Henri Stern
>> But I think your point, your comparison to the cloud is really good. Which is to say, let's go back to 2006. AWS starts. You have a lot of players out there who have built defensibility by actually having their own data infrastructure, running their own servers. Now you get the ability for a number of startups, and you see it in the wave of companies that arose at that time, who can actually build without needing to build out their own server farms or run their own machines. Insane opening up of the market and enablement of the internet ecology that we have today. This is Airbnb, this is Uber. These are all these apps that come out.
John Furrier
>> They would not exist without Amazon.
Henri Stern
>> They could not. But conversely, you see it for traditional businesses who maybe were like, oh, we're going to be on prem for a long time. Ultimately moving to the cloud enables them to ship faster, enables them to have better cost structures. So I think it is both. And this is why, in a sense, I see this as whatever the opposite of zero sum is, it's a very positive-sum movement where this just opens up new markets and opportunities.
John Furrier
>> That's awesome. I totally agree with you. And I think this is why I love this market right now because it feels like nerdy geeky infrastructure on one end, and then just massive money-making opportunities with just good products. So you got kind of the best of both worlds.
Henri Stern
>> I completely agree. And this is where at least we're really excited about our work as part of Stripe. Which is Stripe has spent their entire lifetime making complex things simple. Getting payments on the internet sounds very simple, but it was not. And I think the reality is we still have a lot of work to do on the crypto-infrastructure side to make this absolutely seamless for users. And this is where we think this is a really good marriage actually.
John Furrier
>> Yeah, and we've got a lot of trading going on down there. You can hear us. We're above the option floor. It's getting pretty active .
Henri Stern
>> I love it. I love it.
John Furrier
>> Outcry still. They'll tokenize this soon. So I love the Polymarket comment. We'll end on that. And talk about your vision going forward. Now, part of Stripe, which is not sitting on their hands. They're leaning in, they're making some big moves. Always loved that company from day one. Just a simple, as you said, simple value proposition, one-click API connect, and you've got rails. What's your focus now in terms of your vision as you look at the world we're navigating into?
Henri Stern
>> There's probably two prongs. We are dead focused on real-world utility. Ultimately we want to take up this infrastructure to make Stripe users' lives easier. And in this case to power Privy users, Bridge users. This is another company in the space that Stripe acquired, their lives easier by building more powerful products. So dead focused on real world utility through these rails. And really it means two things. One, how can we add these rails to build an even better experience for Stripe users? How can we enable basically global money movement, open up new markets, enable instant payments at a cheaper price? And then on the second front is how do we basically build the tooling so people can run away with it and have these emergent properties that you're talking about. So I think the vision is a world in which every app has a built-in bank account, and that bank account is interconnected with the entirety of the world's other fiat rails.
John Furrier
>> It's legit next level app-to-money system connection, which-
Henri Stern
>> That's the hope....
John Furrier
>> just like bridging apps. And apps for everything now. They're bigger apps too. A bank is an app. Henri, thanks for coming on the Crypto Trailblazers.
Henri Stern
>> Thank you so much for having me.
John Furrier
>> Henri's here with Privy. Again, Crypto Trailblazers. Building the system where it's going to require developers and the infrastructure that has to have scale, stability, and credibility, and of course confidence. And as that continues to thunder away, you're going to see a tsunami of entrepreneurs, new apps connected in with the money system. Of course, we're doing our job to connect you with the best here at Crypto Trailblazers. I'm John Furrier, the host. Thanks for watching.
John Furrier