WEBVTT

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Let's go over to coin base and talk about the Circle Consortium which is now

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being dissolved as Coinbase has garnered a

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or purchased a stake within Circle itself.

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Circle earlier this year uh actually sold some

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its stake to fidelity and Black Rocks coin based

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joins those two firms. Uh

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was his main.

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Well, I think Circle is really growing and they want coin base for the Ride Circle,

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of course, runs the US DC uh network.

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They're adding about six more blockchains for that crypto asset,

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which is quickly becoming one of the most important stable coins out there.

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Zach, I throw

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this one over to you.

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This is kind of cool to look back and

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think about like how the Circle Consortium worked.

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It did its job for a few years now.

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They're professionalizing a little bit more,

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putting it all under one hood and then coin base continues to

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have a stake in the company by purchasing a stake in Circle.

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Yes, I will correct you, sir.

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It was the center consortium, not the Circle Consortium.

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So the center consortium is the thing that's being nuked, I think.

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Um I, yeah, this is interesting.

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I mean, obviously the addition of additional blockchains stands out, right?

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Having native US DC on various layer one networks

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is pretty catalytic for a lot of these networks,

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right?

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You want to have that stable unit of account that you can use to zap around money

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uh natively on these chains rather than having to rely on a bunch of sort of like,

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you know, uh duct tape bridge situations.

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So um that I think is super notable,

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but I think also that there's clearly some interesting,

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I think behind the scenes here as to why

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um coin base wanted to, you know, get in on this a bit more actively, right?

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I think if you looked at the low to no

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interest rate environment that a lot of stuff took place in

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uh you know, in the last 34 years,

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suddenly these reserves are probably thrown off a good chunk

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of change sitting in some uh bank account somewhere,

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um you know, generating interest, generating returns, right?

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So I can imagine why Coinbase would want

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to be closer to that because it might represent

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um a decent uh business line, right circle.

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These are dollar backed uh stable coins, they're sitting in reserve somewhere,

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they're tokenized and then they're, you know,

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zoomed around the internet and then if you want to cash them out,

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you get that dollar back, right.

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So,

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um I think the business sort of the economics

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of being a stable coin issuer have certainly changed.

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Given the high interest rates uh that we see.

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So it's interesting that I would,

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I would imagine that that may have been sort of a catalyzing factor in

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this changed to the approach.

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Um And that's certainly interesting to,

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to see coin base be a bit more uh active in pursuing it.

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But yeah,

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I think probably the new Blockchain stuff will

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have the longest term ramification in terms of,

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again, maybe jump starting some of those ecosystems a bit further.

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Um But yeah, interesting business story as well here, I'd say

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Jen, what do you think?

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Well, I read this and this is complete speculation, but I read this and thought,

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you know,

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coin base has been working very closely with their lawyers very closely with

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their legal advisors on the suit that's brought against them by the SEC.

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There's a stable coin bill um that's,

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that's being debated on

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and I just, I feel like this is, you know, them looking at the industry,

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looking at the growth of the industry, the consortium was created in, I think 2018,

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I think that this is them

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seeing kind of where regulation is going and making their

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making us DC look like other stable coins that

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they think are going to make it. And maybe one of those is, is

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a

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US D paypal stable coin. It just feels like they are restructuring.

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They've looked at the end,

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they've seen how it's developing.

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They've heard what regulators are saying when it comes to stable coins and they

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are being flexible so that they can carry on uh with the product and,

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and again, bring it to more Blockchain.

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So that's, that's my speculation while reading this,

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I think this is a regulatory response that has been carefully thought through.

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Well, any last words on this one?

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Yeah, I'm just wondering about the funding side of these things.

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So Coinbase has a pretty good books in terms of like revenues,

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cash flows and debt on hand.

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Uh They did recently recently announce that they're

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raising about 100 and $50 million in debt,

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I think as of like August 8, that about 50 million of that secured.

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And I'm wondering if that was something to do with this.

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But there's, of course, right now, that's only speculated,

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we don't really know how they purchase this or how

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large is the stake uh within this whole um,

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new purchase was.

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So that'd be something I'd be curious about knowing coin base.

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Of course,

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just a huge company at this point and they

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have stakes in so many different business lines,

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very professionalized company.

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Uh But I'd be curious about the money side of things, Zach

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and the,

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they just keep on checking on.

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I have to say it every time we talk about coin base, despite this lawsuit,

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they keep moving forward and doing what I think

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is like really great things for the industry.

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So they are leading the charge.

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It's gonna be less confusing when writing up stable coin stories

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because you always kind of had to mention like center.

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But it was sort of like, it wasn't really key to the story. So it is nice.

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It'll be nice, like simplistic because, you know,

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center was circle and coin base and now it's like, let's get rid of that.

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We're just,

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yeah, just, just straight up circle. Now, that's great.