Capitol Hill enters crunch time over the lardiac, crypto infra has been quietly growing behind the scenes, and it's been a year since the passage of the Genius Act, and in that time, a stable coin supply has jumped over 300 billion.
And steadily adopting these reals for core plumbing with Coinbase was merits of bringing USDC into derivatives margin work flows as well as sovereign funds like these move dollars exploring tokenization all the while Bitcoin is trading in tandem with a while joining us ahead of the weekend is John that you know, head of strategy at Coinbase.
John, good morning.
Happy Friday.
First I do want to start out with a lot on Capitol Hill with clarity.
So senators are scrambling to work out an ethics compromise before the recess.
So do you think institutional investors are waiting on Washington before allocating capital or have they already decided that US regulation will eventually catch up.
Remy, it's great to be here.
Sorry, I can't be with you in New York.
Um, look, of course, something as monumentally significant as a market structure bill, which we just don't do in this country very often would be significant.
So, uh, and of course it would be an accelerant, I think, particularly for the very, very large institutional investors and banks who are more conservative and want absolute finality on, on clarity, um, both the actual bill and also regulatory clarity writ large.
That being said, um, the institutional investors and participants who have been Investing in learning and growing this asset class over the last 10 years are not stopping because this one bill doesn't work.
We saw with the passage of Genius, which isn't even effective into law yet, how that unlocked a significant amount, roughly 25% growth, but stablecoins were already growing at that rate prior.
So, I don't want to downplay the importance of clarity, and we're still extremely optimistic that it will happen.
Crypto blockchain does not need a single large catalyst.
There are microcatalysts occurring every single day that indicate that adoption is just increasing.
Yeah and John we just hit the one year mark of the genius act which is hard to believe and as you mentioned we have been paying attention to stable coin supply but when it comes to community banks and stable coins as well as the infrastructure aspect of this what are we seeing right now and why.
So I think unfortunately we've seen sort of a false narrative playing out that community banks are collectively against blockchain and crypto adoption as if any community bank is losing a customer to a firm like Coinbase.
I think that's that's obviously patently ridiculous.
They're losing customers to GIBS and other large banks, largely because of convenience.
Uh, you, I was listening intently to your previous guests talk about the extraordinary increase in convenience that will drive AI adoption.
Similarly, when you look at the combination of AI and blockchain rails, you get such a better, faster, cheaper, more secure and more convenient experience for the average user.
I think community banks, at least the ones that I speak to, understand that deeply.
They understand that a technical innovation like AI or blockchain is not the enemy.
It's actually their best chance to stop the bleeding that's been occurring over the last decade or so as people realize all the advantages that modern technology and scale afford and they start to grudgingly move away from these institutions that they love.
So, I'm in very deep conversations with multiple community banks who see blockchain and AI solutions as a way to increase their business, particularly among younger users rather than us as some sort of enemy.
Yeah, and while I have you here John, I do want to get your perspective when it comes to the institutional side.
So Coinbase has just partnered with Merrick to bring USDC directly into regulated derivatives margin work flow.
So explain to the layperson who's watching right now why using a stable coin as derivatives collateral is a big milestone for traditional trading desks.
Sure, so I, I'll keep it super simple.
If you're lending someone money, if you're lending them anything and they give you collateral, you're more comfortable with that arrangement as the lender.
If you understand the collateral, you can hold it easily, you can move it around if you need to, you can sell it quickly.
Uh, we use the term fungibility.
To describe sort of all of that.
You want something that's liquid and fungible, that's better collateral for you because in the event you would need to call it or you would need to sell it to make yourself whole as the lender, you're more comfortable with that, right?
Compare that to if I, you lent me money, Remy, and I gave you something that was difficult to sell, right?
That's not, you're not as secure in that relationship.
So stablecoins, which are massive, liquid, fungible, operate 24/7, particularly the big ones like USDC.
They're wonderful collateral because they make the lender feel more secure.
If lenders feel more secure, they're comfortable lending out more.
If more money is lent out, more borrowers are getting that money and they're using it to create growth.
So that's a wonderful situation for all.
Us to be in and Marre proves that.
I'll also just point quickly you mentioned Mubadala's tokenization effort using Bass as one of the one of the chains.
That's equally important because that's showing that not only on the lending side does blockchain promote growth and promote activity.
That's showing that one of the world's most sought after investors, Mabala, is trusting a tokenization effort to make in this case, its private market strategy, which is notoriously difficult for retail investors to get access to.
It's making that accessible much more broadly than a traditional securitization would.
So we've got Marre improving the lending environment and we've got Mubadala improving the equity and pre-public equity market.
That's the promise that blockchain gives to regular people.
And John, before I let you go, we are seeing this interesting correlation emerge between the coin, the crypto major and the AI sector here.
So would you say it's just broader tax speculation or our investors pricing crypto as the native currency for an AI driven economy moving forward.
It's a great, it's a great question.
So I, I, yeah, I do, AI and crypto have a lot in common these days.
The stocks are getting beat up, but the usage is increasing, which is sort of befuddling, but, you know, time, time won't let that play out in the right way.
Um, look, I think that's a wonderful thesis and I think that's, that's the correct thesis that AI and blockchain are inextricably linked.
And I think I've said this on your show before.
If AI is scalable intelligence and blockchain is scalable truth.
Then not only should the two work together, we really want them to work together.
We don't want super intelligent gods running around with bad information or the inability to transact in efficient ways.
So I do think that is a great thesis.
I think right now the unprecedented scale of ebb and flow into AI is sort of overwhelming everything, all logic, all fundamentals, all rationale, all rationality.
So I think for now we're just seeing this unprecedented tidal wave of investment that's moving very fast in and out of AI because of these frothy evaluations.
I think just cloud everything.
But over time, I think you've just laid out the correct investment thesis relative to both asset classes.
John, we will have to leave it there for today, but a lot of food for thought as we head into the rest of the summer as well as the second half of 2026.
John appreciate your time.
Thank you so much for taking time out of your busy schedule to join us and hopefully you'll be back at the New York Stock Exchange.
I'll see you there in Abu Dhabi.
Take care, Remy.
