The Rise of Stablecoins: An Interview with the Founders of USDC and Bridge

Author: Payment 201

Sean Neville, co-founder of Circle and co-creator of USDC, and Zach Abrams, founder of Bridge (now a member of Stripe), deconstruct the true story of stablecoins and the future of internet-native currencies.

They shared how they found product-market fit (PMF), how they survived the early chaos, and how they built a financial infrastructure capable of scaling at scale. They also looked back at the very early days of USDC—when stablecoins were completely unpopular and regulatory frameworks didn't exist. Sean recounted how his belief in "money running at internet speed" shaped a multi-billion dollar asset. Zach reviewed Bridge's transition from NFT products to stablecoin infrastructure—and the changes that occurred after joining Stripe.

Together they broke down the following problems:
– Why stablecoins are poised for explosive growth right now – What constitutes true product-market fit (and why founders almost never "feel" it)?
– The challenges of building crypto or AI products in a highly regulated environment – Why the world might need new underlying chains like Arc and Tempo – How decentralization, liquidity moats, and interoperability will shape blockchain adoption over the next decade – What does the future look like for programmable money and AI-driven financial workflows?

Whether you're a founder, a builder interested in crypto, or someone trying to understand the direction of global payments, this conversation recorded at the a16z crypto Founders Summit will give you profound insights from two industry leaders at the heart of change.

Takeaways:
I. Stablecoins are the only application in the crypto space that has truly achieved "product-market fit".

• Stablecoins are the only products in the crypto industry to date that have truly found a Product-Market Fit (PMF).

Assets and exchanges are not considered "products," but stablecoins meet real needs: liquidity, cross-border capital migration, and the demand for US dollars, etc.

• USDC's success stems from the liquidity moat of DeFi, while USDT's success stems from the liquidity moat of CEX.

It will be extremely difficult for new stablecoins to break through this barrier.

• In the future, there will be tens of thousands of "tokenized deposits + stablecoins", but only a few will truly have a global impact.

II. Why are stablecoins only now experiencing a boom? (It's not a technical issue, but rather a regulatory and distribution issue.)

• The biggest challenge has never been technology, but rather regulatory approvals, partner networks, and compliance frameworks.

Circle spent many years educating the public, and the market and policies did not mature in 2023–2024.

• Stablecoins are shedding the negative label of crypto, especially in the field of AI engineers, where "stablecoins ≠ crypto speculation".
• Stablecoin growth is still primarily driven by the crypto capital markets, but “real-world payment use cases” are emerging:

1. money transfer
2. Export settlement
3. Wallet storage (people in developing countries holding US dollars)

However, the scale is still very small (a few basis points of global payments).

III. Why are next-generation base chains (Arc, Tempo, etc.) necessary?

• Existing blockchains are not optimized for payments at all.

The issues include:

1. Wallets require pre-paid gas (high cost, poor user experience).
2. Transaction congestion during peak periods
3. gas fluctuations
4. Default is public, not private

• Payment chains must have:

2. privacy
3. Dedicated channel isolated from meme coin/DeFi transactions
4. Pay gas using the same currency (e.g., pay USDC gas with USDC).

• AI agents-driven "automated payments" require entirely new infrastructure.

It's unrealistic to expect an AI agent to manage a bunch of on-chain tokens in order to pay gas.

• Arc (Circle) and Tempo (Stripe) are independent paths, but they share the common goal of building an "internet-level payment chain".

Who succeeds is not important, as long as payment can be transformed from a "byproduct of blockchain" into a "native capability".

IV. The True Nature of PMF: Not an "Emergency," but a Never-Ending Staircase Machine

• Starting a business is not a matter of going from "no product-market fit (PMF) to having PMF" in an instant, but rather a staircase machine that is always ascending:

1. One customer ≠ PMF
2. Five clients ≠ PMF
3. One million in income ≠ PMF
4. Financing ≠ PMF

• Even publicly traded companies like MongoDB are constantly iterating themselves, abandoning old businesses and embracing new ones.

Success is a series of leaps, not a final destination.

• Founders will never feel that their company is "inevitably successful".

Only employees would feel this way.

V. Why did Stripe acquire Bridge? (One of the most important signals in the industry)

• Stripe is one of the very few companies in the industry that truly understands the "future scale of stablecoins".

Zach initially thought "no one would want to acquire us," until Stripe demonstrated the same level of conviction.

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

1. Daily operations are more complex (aligning processes, systems, and compliance).
2. Strategically, accelerate speed by 10 (bank partnerships, issuance platforms, corporate clients).

Once Stripe enters the stablecoin issuance and payment field, this will actually be a major turning point for stablecoin adoption.

VI. Stablecoin → AI Money: The Next Infrastructure Revolution

• AI will execute financial workflows, while humans will only be responsible for supervision and optimization.

Case Study:

1. Circle's compliance team was originally responsible for AML monitoring.
2. Sean's new company uses AI agents to execute workflows in their entirety.
3. Humans are responsible for censorship and decision-making.

• In the future, financial institutions will not need teams of more than a thousand people; AI will reshape organizational scale and operating methods.

text:
Host: Many of you here have probably used the products you created, Sean. When you designed USDC years ago, it was completely unclear whether it would be a good idea: zero interest, no business model, and no clear market demand. What gave you the conviction that USDC could succeed?

Sean:
Actually, we should have realized this much earlier, instead of waiting until 2017—the year I wrote the first white paper and started writing code. We founded Circle in 2013, and even then we had a strong belief—we always believed in "democratizing global finance on the internet."
We started with Bitcoin, but later realized that what we really needed was a digital representation of government fiat currency—trustworthy, yet capable of operating at internet speeds.

So we chose to put the US dollar on Ethereum first. But this concept was never "single-chain" from the beginning, but rather "multiple chains, multiple issuers," opening up a "new world where currency operates at internet speed." USDC's mission is to turn this vision into reality.

host:
So why now? Why are stablecoins experiencing a surge today? When you started doing this, almost no one understood its value.

Sean:
Because it was a very difficult problem at first.
The real challenge wasn't the technology—although the infrastructure at the time was indeed immature—but rather the regulatory system.

• Regulatory barriers must be removed.
• We need to find a suitable partner.
• Distribution channels need to be built

These factors are more critical than technological challenges.

We didn't shy away from the challenge; we knew it would eventually have to be enshrined in law, but that would take time. So we invested a lot of time educating regulators, explaining how the mechanism worked. From an economic perspective, for example, the "Chicago Plan"—which advocated separating money creation from the credit market—stablecoins essentially made this idea a reality. We often discussed these issues with regulators, but it was destined to be a long-term strategy.

Interest rates were extremely low at that time, and people like Balaji, who helped us promote USDC at Coinbase, predicted that it might take 10 years to become a real business model. Fortunately, it happened much faster than that.

host:
When I was working with you guys at Coinbase on USDC, it felt more like a scientific experiment. Nobody knew what the business model would be, or how it would be used. The industry was far less mature than it is today; DeFi was practically nonexistent. CryptoKitties might have just emerged, or it might not have even appeared yet. The entire ecosystem was incredibly immature, and the development over the next six or seven years almost entirely revolved around stablecoins. Your approach back then was completely against the grain.

Sean:
Even within Circle, there weren't many people who supported USDC. We were doing a lot of things at the time. Although we had a strong conviction in "internet finance" as a direction, we were very flexible in terms of specific paths, especially in the early days when we were struggling to obtain payment licenses in various US states and the prospects were unclear.

We experimented with several products, starting with Bitcoin and later moving to Ethereum (where USDC was launched), and remained relatively neutral on the underlying chain, only requiring it to meet a few key features.
Our core focus has always been on programmable currency layers that operate across multiple blockchains.

host:
I have to tell you a story. The day I went to your office in 2017, the market was crashing.
(Zach: Can you be more specific?)
That day was a bloodbath, but in hindsight, it was insignificant. Bitcoin plummeted from $20,000 to around $6,000. I thought you'd cancel the visit, or that there would be panic on site. But when I arrived at the office, everything was normal. You said you had an OTC trading desk, and that you could make money as long as the price fluctuated.

Sean:
By 2017, we had been through four or five years, with countless minor crises along the way. For example, in the early days, we couldn't find banking partners; only Silicon Valley Bank was willing to open an account for us—and on that very day, I attended an SVB panel, and on the same day, news broke that Mt. Gox had collapsed. The bankers' reaction was to immediately withdraw. There were many such minor crises, but if you have faith in something, you persevere, remain resilient, and if you survive long enough, you can succeed.

host:
I'd like to talk about those challenging moments. But let me first ask Zach, your path has also been full of iterations. Bridge started with NFTs and later transitioned to stablecoin infrastructure. How exactly did that happen?

Zach:
Our journey was shorter than Circle's. Circle spent four or five years exploring before finding its final direction. We, on the other hand, started our business in 2022 when NFTs exploded in popularity—wanting users to buy NFTs with their bank accounts. The process was: deduct money from the bank → convert to stablecoins → buy NFTs. It turned out to be a terrible idea. But in the process, we discovered: "Building a product with stablecoins is extremely difficult."

As time goes on, we are increasingly convinced that stablecoins will become a core payment infrastructure, and someone needs to solve the complexity of "connecting the banking world with the stablecoin world".

Even after we started acquiring clients, we constantly doubted whether we had found the perfect match (PMF). Two or three years later, we still asked ourselves, "Are we really PMF?"

Zach:
I'm curious—when did Circle feel that its stablecoin truly achieved Product-Market Fit (PMF)? Because back then, although there was a lot of usage, there wasn't a business model, so it probably didn't qualify as PMF. Now that the company is publicly listed, maybe you feel it has PMF now.

Sean:
I have a potentially provocative point of view:
So far, in the entire crypto space (though still very early in some sense), I think the only thing that has truly found “significant PMF” is stablecoins.

I don't consider "assets" or "exchanges" to be products. I know many people will disagree, but that's my opinion. However, stablecoins didn't achieve this from the start either. It did take time.

The world's largest stablecoin (Tether) has its liquidity moat derived from the crypto capital markets of centralized exchanges. USDC, on the other hand, has its liquidity moat derived from DeFi.

However, this didn't happen early on. I think it accelerated around 2020 and has continued to grow. While regulatory hurdles still exist, at least the question of "how to overcome them" is beginning to emerge. The two biggest challenges for stablecoin options going forward are:

• Liquidity moat
• Interoperability

Given the current ecosystem, it's hard to imagine a new USD stablecoin suddenly emerging that could overcome existing competitive barriers, unless there's a major shift in the industry. This may be a minority opinion, but it's certainly my current view.

Zach:
I believe there will be many, many different types of stablecoins in the future. I don't know how many will break through the moat, but most of them won't actually need to.

Sean:
I agree. I believe that in the future we will see any system capable of recording transactions—such as digital account balances in traditional financial databases—potentially become tokenized. Therefore, there will be thousands of different forms of tokenized deposits and stablecoins. However, I also believe that only a few will truly be "important"—those capable of overcoming liquidity barriers and achieving genuine economies of scale.

Beyond the crypto capital markets, there are also those pushing for payments and other use cases. We've been discussing these things for years, but they haven't yet become mainstream use cases. However—we're now very close to realizing them. I've been saying this for the past seven years (laughs), but now we really are.

Zach:
I also feel we're very close, but it's still hard to articulate exactly "how early" we are. Things seem to have stabilized a bit now; for example, there are publicly listed companies, and the industry seems to be moving from its past chaotic cycles towards a kind of linear growth. But in reality:

• Regulatory requirements are still not fully defined.
• Stablecoins account for only a tiny fraction of global payments (a few basis points).
• In the US banking system, stablecoins account for a negligible portion of deposits.
• Non-USD stablecoins are almost non-existent
• Most banks and financial institutions still completely avoid stablecoins.
• Blockchain itself has not yet been optimized for truly large-scale payments.

So we are still in the very early stages.

Sean:
I completely agree.

host:
Sean, you mentioned that you believe there will be multiple stablecoins in the future. Currently, Tether and Circle have a first-mover advantage and dominate almost the entire market. Do you think this dominant position will continue?

Sean:
Well, I don't have any specific insights into other companies' internal strategies (of course not). But I think current stablecoin trading volume is still primarily driven by the crypto capital markets. While we are indeed seeing some real cross-border payment use cases now, such as:

• Remittance payments
• Import and export scenarios
• People hold US dollars on their phones (stablecoins are the best way).

These use cases have emerged, but their scale is still relatively small. Therefore, today's market landscape is still determined by the crypto capital market. More interestingly, once stablecoins truly penetrate the core payments market, new players will emerge, possessing different distribution channels, partnerships, and capabilities. These new stablecoins will enter the new market in entirely different ways, bringing about a new landscape.

I remain optimistic. Every company has a different view on stablecoins.

• Some people are concerned about underlying assets and investment returns.
• Some people focus on product experience
• Some people "accidentally made stablecoins," and even hate the word "stablecoin."

These are the types of people I enjoy talking to the most; they call them "laugh" or "streaming dollar."

Sean:
When I was starting my new business (AI + Finance), I avoided using the term "stablecoin" for a long time because AI engineers reacted extremely negatively to "crypto." I even thought they were more averse to crypto than other developers. However, things started to change after this summer. Stablecoins gradually shed the negative image of crypto and gained independent recognition. This is quite interesting. We may not call it "stablecoin" in the future, but the term seems to have become a brand.

Zach:
I think this term is already "defined". (laughs) But you can continue to fight for it.

host:
Zach, I'd like to return to the topic of Product-Market Fit (PMF). Many entrepreneurs here must be wondering: how did you manage to get through all that? And how did you know "we finally got it right"?

Zach:
I want to say that people often describe PMF as a dividing point:

• Previously it was a "desert without PMF".
• What followed was a "paradise".

But that's not actually the case at all. For example, Bridge:

• We conceived the product.
• Build API
• API Launch

At that moment, I didn't feel PMF (Productivity, Fit, and Optimization). Then our first client came—we didn't know if they would grow, and we still didn't feel PMF. Then came 5 clients, 10 clients… new inbound clients every month, but they were all small teams in Latin America and Africa, and we didn't know how big these clients could grow. Still not PMF. We reached $1 million in revenue. I looked at the client profile: a strange and messy mix of companies. I was completely unsure if this could constitute a sustainable business. Still not PMF. We raised Series A funding. This actually scared me more—because I still didn't feel we had PMF.

Until I attended an event and heard the CEO of MongoDB share his insights:

• Their company already had $100 million in revenue when they were preparing for their IPO.
• Amazon launched a competing product, and the entire market thought they would "die."
• They watched as their original core business gradually disappeared.
• The company survived because of a small product that only generated 1 million in revenue at the time.
• It later grew into a billion-dollar business.

This made me realize:

Even listed companies are still experiencing the same "uncertainty and iteration" as entrepreneurs—only on a larger scale.

At that moment, I understood: entrepreneurship isn't "a point to reach Product-Market Fit" (PMF), but a never-ending stairmaster. You'll always be asking:

• How do we go from 1 million to 5 million?
• How do you go from 1 million users to 5 million?
• Each stage is more difficult than the last.
• Every step felt more like a matter of life and death.

It sounds a bit self-torturing, but it actually helped me immensely. It made me realize that "uncertainty" isn't a sign of failure, but rather the essence of entrepreneurship. Even today, at Stripe, Bridge still feels that pressure every day.

host:
So there's no easy path? It's all uphill?

Zach:
Yes. Others may have different experiences, but this is certainly true for me. I've worked for many large companies that later became successful:

• Square (very early on)
• Coinbase (very early on)
• Brex (very early)

When I joined these companies as an employee, I felt that these companies were "bound to succeed." So I thought: there would also be a moment when I felt that Bridge was bound to succeed.

But now that Bridge is part of Stripe, if a new person joins, they might feel that Bridge is "inevitably a success." But as the founder, I'll never feel that way. Because the founder is always thinking, "What's the next life-or-death issue that will kill us?"

host:
So how did you decide to jump off your own "staircase machine" and switch to Stripe's "staircase machine"? What made you decide to be acquired?

Zach:
First, we're not "looking to sell the company." I believe a good company isn't one that "sells itself," but rather one that "gets bought." And frankly, I was once 100% convinced our company "couldn't be acquired." This was because we had immense faith in the future of stablecoins, believing they would become enormous. And I simply couldn't imagine:

• There is another company
• Large enough and with enough resources
• They also share the same strong belief in stablecoins.
• And are willing to invest heavily in this cutting-edge field.

I don't think I'll find a company like that—I don't even think Stripe is a possibility. I initially approached Stripe purely to bring them on as a client. I tried many times to get them to sign a contract and use our product. But they kept putting it off.

But as I spent more time with John and Patrick (co-founders of Stripe), I gradually realized that their understanding of this field was remarkably aligned with ours. They believed it was a crucial component of the future payments infrastructure. They were also willing to invest substantial resources.

I also discovered that if we did this with Stripe, our chances of success would increase significantly, and we would move much faster—even faster than I expected. For example:

• The acquisition, once completed, propelled the entire industry forward significantly on the option curve.
• Our new product launch also demonstrated to the world what stablecoins can do.
• Our "open issuance platform," the standalone version of Bridge, simply cannot attract similar clients.
• But becoming part of Stripe allows you to partner with large corporations and banks.

All of this proves that adding Stripe has accelerated the process far beyond my expectations.

host:
How has your life changed since the acquisition? How has Bridge's work style and company culture differed after joining a larger company?

Zach:
They did force me to drink "cheeky pint." It was some kind of "initiation ritual." Getting back to the point, I'll summarize two phenomena:

(1) Daily life is actually more difficult, even though we operate quite independently:

• We have our own office
• My own Slack
• If a Stripe employee wants to message me privately, they have to go through a referral.
• Google Docs permissions cannot be added to each other arbitrarily.

We do indeed "operate like an independent company." But the daily work is harder than when we were independent because: in addition to continuing:

• Finding bank partners
• Building crypto infrastructure
• Build a wallet
• Product development and customer support

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

• Our CRM needs to be integrated with Stripe's CRM.
• The entry point from which the customer comes in needs to be identifiable by both teams.
• The permissions and processes of the internal system need to be aligned.
• Many operational processes must be integrated in both directions.

All of these factors make daily life more complicated. Therefore, the pressure on a daily level is just as high, or even greater.

(2) But from a macro perspective, the “acceleration” is huge. If Bridge does some things independently, it would take many years to achieve them.
Stripe now accelerates the entire business by 10x at critical nodes. For example:

That's how we launched our card products.

Enterprise-level adoption currently underway

Large banks currently cooperating

Stablecoin issuance platform (issuance platform)

These are all things that could only be achieved after joining Stripe. So, on a macro level, the acquisition put us on a faster track.

host:
So you're still on the stair machine.

Zach:
Absolutely right.

host:
Sean, you founded Circle more than a decade ago, and now you've started a new company in the AI era. How does your current entrepreneurial approach differ from what you did back then?

Sean:
Many things are different. But let's start with one thing that remains constant: When we founded Circle, we knew that finance was a highly regulated industry, therefore:

• Significant investment must be made in education regulatory departments
• It is essential to understand the international regulatory landscape.
• It's essential to know what will ultimately be written into law.

The same applies to the field of AI + Finance:

• You must consider how AI workflows will impact global finance.
• You must consider which AI safety standards will become law.
• You must deal with the political games between countries based on the underlying model (LLM).

These models are very similar to those of Circle in its early days.

But the real difference is that the company's "tactical" operational methods have undergone a huge change.

For example, at Circle, we have many risk control and compliance analysts:

• Surveillance money laundering
• Open the case
• Collect evidence
• Submit a Suspicious Behavior Report (SAR)

Now, in my new company, these processes are entirely executed by an AI agent.
Humans are only responsible for: supervising, adjusting workflows, and optimizing efficiency. So the role of people has changed, but the efficiency of the process is completely different. In terms of manpower size—Circle currently has about 1,200 people—I can't imagine that such a large team would be needed to do the same thing today.

host:
What you just mentioned reminds me of something—in the early days of the internet, people always said that the internet changed all industries and all modes of production, but the one thing that didn't change was GDP (economic data). The same is true for AI now: it clearly improves individual productivity, but it's completely invisible in recruitment data. This is especially evident in San Francisco—we clearly feel this when hiring engineers.
The demand curve for engineers is practically "rising straight to the sky".

Sean:
right.

Sean:
I do believe that you can't build a financial institution by "vibe-coding." It still requires highly experienced engineers. But the way engineers work has completely changed:

• The principal engineer's work style is different.
• The architect's working style is different.
• Different development models
• The toolchains are also different.

I also believe that university curricula will be forced to change. But universities haven't kept up with this change yet. Therefore, the situation of current university students worries me.
They are actually learning a lot of things that are "no longer relevant to current computer science".

host:
What would you recommend they learn?

Sean:
Dropping out of school to start a business.

host:
If I don't drop out, what should I study?

Sean:
Humanities, poetry. Back to: philosophy, political philosophy (polyscience), English. I'm not saying this lightly—this is truly a difficult question. And the current generation of university students will be the most directly impacted by this era.

host:
Before we conclude, I must ask you a question. You are both working on new base-layer chains:

• Circle as Arc
• Stripe makes Tempo

Why does the world need new underlying blockchains? Perhaps even two?

Zach:
I'll speak first, and then I'd really like to hear Sean's perspective. We've been building payment applications on the blockchain for over two years, and from the beginning, one thing has been very clear: existing blockchains are simply not optimized for payments. This manifests in many ways, both big and small. For example, one of the "big problems":

A large new bank (neobank) has millions of users who want to use a specific chain.
To open wallets for all users on this chain, each wallet must have gas pre-deposited before it can receive USDC. This alone would cost millions of dollars. For example:

One of our earliest clients was a government agency that needed to distribute relief funds to a large number of individuals. The first distribution involved a few thousand transactions, which is actually quite small, right? But it took us 18 hours to complete the entire distribution on-chain. These are examples of "small" problems that led to "big" problems. In addition, there are several "truly big" problems:

Privacy blockchains are public by default, but core financial institutions cannot accept that all transactions are transparent and public.

Discrete payment lanes
If a blockchain experiences a gas surge due to a liquidation storm or a surge in meme coin transactions, how could we possibly build our "core payment infrastructure" on such a blockchain?

All these issues point to the need for a blockchain designed specifically for payments.

We hope Tempo, as a standalone project, can solve this problem. But we'd also be happy if Arc does.

Sean:
Completely agree. If you add all these requirements together, for example:

• Must support
• Privacy protection is essential.
• It is necessary to avoid competing with meme coins for block space.
• When sending USDC, the gas fee should also be paid in USDC.
• AI agents should not manage multiple on-chain tokens just to pay gas fees.

We'd previously built on Base and Solana, but the AI agent had to hold the correct gas token, which was a reliability issue. So ultimately we realized: to truly unlock new AI + money use cases, we needed a chain designed specifically for this purpose. Arc and Tempo may have slightly different design philosophies, but their goals are aligned.

Zach:
The best thing about the entire industry is that a few years ago everyone was trying to solve the problem of "expanding capacity, reducing gas consumption, and increasing throughput," and this led to:

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

This is a creativity-driven evolutionary process. Now, the same creativity is happening in the payment blockchain space:

• Tempo
• Arc
• Plasma
• Other independent teams

Ultimately, one or more chains will emerge victorious, which is good for the industry.

host:
One last question: Decentralization has always been a core value of crypto. Some people worry that new payment chains will bring "centralization risks." If you could only say one sentence, how would you convince them?

Zach:
In short: if these chains are centralized, they will not succeed. No bank would want to build its payment infrastructure on "another bank's chain." Tempo and Arc succeeded only because they were truly decentralized.

Sean:
Essentially, we're saying that entrusting your money to encryption technology is more reliable than entrusting it to a company or individual. Decentralization vs. distributed systems, and how to implement them, are all open to discussion—but the principles remain unchanged. No one will use a "corporate chain." Therefore, the answer is: Crypto over corpo (crypto priority, not enterprise priority).

host:
Many thanks to Zach and Sean.