This Week in Fintech
This Week in Fintech Podcast is where the decision makers shaping the future of finance come to talk candidly about what’s working, what’s breaking, and what’s coming next in fintech. Hosted by Nik Milanović, founder of This Week in Fintech and General Partner at The Fintech Fund, the show goes beyond headlines to unpack the real stories behind product decisions, regulation, and market shifts with leading founders, C-suite execs, and ecosystem veterans. This is your front-row seat to the people and ideas moving money into the future.
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This Week in Fintech
Circle's Arc: The Economic Operating System for the Internet
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Host Justin Friedman sits down with Rachel Mayer, VP of Product at Circle and one of the masterminds behind Arc, to unveil Circle’s new layer one blockchain. Drawing on Rachel’s experience trading emerging-markets currencies on Wall Street, they start with the inefficiencies still embedded in traditional cross-border money movement.
Rachel explains how Arc is designed as an “economic operating system” for on-chain finance, with stablecoins used for gas, opt-in privacy, and interoperability built into the network from the start. The conversation explores why privacy and auditability need to coexist, how a permissioned validator set including major banks and payments companies changes the model for public blockchain infrastructure, and whether instant settlement should always mean irreversible settlement.
They also dig into Circle’s broader strategy for bringing foreign exchange on-chain, including the Circle Payments Network, which enables cost-effective and compliant global payments, StableFX on Arc, which aims to reduce counterparty risk for institutions by settling select stablecoin currency pairs on-chain, and Circle’s support for a growing ecosystem of non-USD stablecoins. Rachel makes the case that local currencies will remain relevant, and explains why deeper on-chain liquidity could eventually reshape cross-border payments and institutional FX.
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About Crossing the Chasm
Crossing the Chasm is a special series with Rain focused on what it actually takes for stablecoins to become the default for everyday payments. Instead of rehashing benefits or highlighting pilots, the series breaks down the real work behind winning on Main Street, from upgrading payment rails and navigating regulation to embedding stablecoins into products people already use. Through conversations with builders and operators, we explore how tokenized money moves from early adoption to practical, widespread use across businesses and consumers.
Subscribe for more conversations on what it actually takes to bring tokenized money into the real world.
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Welcome And Rachel’s Unusual Path
Justin FriedmanWelcome to Crossing the Chasm, a series from this week in FinTech where we look at the technologies moving payments beyond traditional rails. I'm your host, Justin Friedman. Today's guest brings an unusual background for an entrepreneur-turned product leader. Rachel Mayer was raised in Caracas, Venezuela. At age 17, she abandoned a recording contract and a career in pop music to study math and computer science at MIT and then Cornell. After finishing her education, she landed on a foreign exchange desk at JP Morgan, eventually running the FX e-commerce platform for emerging market currencies with focus on Latin America. Rachel brings an insider's view of what it actually takes to move money across borders, a complicated chain of correspondent banks, prefunded accounts, messaging platforms, and settlement cycles that have barely changed in decades. In 2015, Rachel left Wall Street to co-found a startup called Trigger Finance, which was acquired by Circle barely two years later. She's now been at Circle for nearly a decade, long enough to watch its flagship USDC grow from an experiment into the world's second most widely held stable coin, hovering between $70 to $80 billion in float today. We will learn about Rachel's current work building the ARC network. Circle describes ARC as a shared platform where stable coins, tokenized assets, economic applications, and global markets can operate on common, composable infrastructure. Rachel, welcome to Crossing the Chasm.
Rachel MayerThank you, Justin. Pleasure to be here.
Justin FriedmanYou started out trading currencies at JP Morgan before pivoting to build your own business. What did you learn on Wall Street that convinced you something was broken in foreign exchange?
Rachel MayerYeah. So as you noted in my intro, I was born and raised in Venezuela. So I wanted to go to Wall Street to really see how the gigantic failures of the biggest economies can actually collapse and really learn how the world works. The world works, they revolve around interest rates, they revolve around banks and liquidity and connectivity and news and cycles. And so I, you know, started my career at JP Morgan as a Latin American effects
What Wall Street Revealed About FX
Rachel Mayertrader. And it really gave me a front row seat at how like the world, the economy, and markets run all day long. You know, non-farm payrolls, the events, the Fed, how potentially like the FIFA World Cup would affect the Brazilian Ray. We had to watch it. And so it was a really fascinating seat to trade really billions of dollars a day. The effects market is the largest market in the world. I think it turns over between seven and eight trillion dollars a day. So it is highly liquid, highly efficient market when compared with commodities or bonds or equities, but it still has vast amounts of inefficiencies. Those inefficiencies, you know, range from the settlement window. So even though you can trade 24-7, and that's pretty rare for like traditional financial markets, banks settle with each other T plus two, sometimes T plus three. That introduces risk into the system. As you noted in your intro, there's a float, and that's a cost to the system. Money is still sitting at like JP Morgan, USA, waiting to transfer to Scotia Bank in Mexico in two days. There's no reason why we need to do that. Moreover, the prices that I would give to my clients, my clients were the biggest hedge funds, Google's the corporates, pension funds were tight. But to trickle down into the system to my dad in Colombia exchanging Colombian pesos, there's just so many middlemen in between. And more middlemen means more fees, more inefficiency, less value to the end consumer. So yeah.
Justin FriedmanI think about how we're a generation into the internet age, and still so many things we do in financial services look a lot like they did in the 20th century before we had the ability to send digits, you know, across the internet in a microsecond. And why can't money travel as quickly?
Rachel MayerTotally. Yeah, I mean, that's the whole thesis behind Circles Vision and stable coins, why we we built USDC to begin with. Uh is the the vision that the internet needs a new form of money and it no longer should be in the power of these old rails and systems and correspondent banking network. Um, so yeah.
Justin FriedmanSo thanks, thanks for that introduction. I want to uh get a little more into your background and and what motivates you. Product development is a discipline that's quite different from trading. So, how did you learn to build things?
Rachel MayerIt's a great question. Um, part of the reasons why
Building Trigger And Learning Product
Rachel MayerI left the bank was you don't build anything. Like you're quoting, you're providing rates, and you you give the market liquidity and efficiency, but you're not creating jobs, you're not creating like net new value or a product that people love. Um, and you know, I've I've all I've always felt that itch. Like even you, I'm sure you didn't have to start the podcast, but you had to stack, you you want to scratch an itch. And it's building something that someone is gonna love and use and you know, provide, get value of every day. Um, so when I when I left JP Morgan, I realized just a simple use case that like my Bloomberg terminal as a trader gave me so much value, yet it's like a $50,000 subscription. And mind you, this is like 2013, 2014. So the world has changed a lot since then. But I wanted to, I wanted to let retail traders and active traders to trade on rules and notifications autonomously and conditionally. And that's what like Bloomberg let you do. You could set up all these rules, all these alerts on like really unique data sources and set automatic trades on it. I wanted to bring that to everyday retail traders. And Robinhood was just emerging. Um, you know, we had like four cryptocurrencies at the time. So we started Trigger, which was rules-based investing. You could set if this and that statements on the market. Like if Trump was tweeting about a stock back then, it would still, you know, collapse uh Ford stock and whatnot. That's still true. Um, but you didn't have agents, you barely had mobile. So we created these like mobile rules that you could trade on the market, including crypto. Um, and I just loved it. I loved being, you know, serving tens of thousands of retail users, building, you know, things that they wanted, that they needed, uh, and hearing their feedback much more. And I just knew that my career had changed forever. That product and building technology was where my heart was headed.
Justin FriedmanAnd you were just 28 years old when Circle acquired Trigger Finance in 2017. And you've been there ever since. So that's practically a lifetime in this industry. After that short but successful stint as an entrepreneur and a CEO, what's kept you on the inside at Circle all this time?
Rachel Mayer100%. Uh, I mean, Jeremy had reached out about wanting to build out uh more consumer products back then in USDC. And it's a generational company. Um, as you noted, you know, crypto, we measure ourselves in dog years. This is my ninth year. I feel like a crypto abuela, but it's a generational place, the culture, how we work, how we show up in the market, the vision of building, you know, a new type of internet that most value with prosperity for all uh types of people at its core. Um, and just the opportunity, right? Like stable coins, when we started USDC in 2018, stable coins were not, you know, sexy. They were, they were a must layer for uh DeFi and for exchanges to like better move value between each other. And now every single bank, every single major enterprise is hiring ahead of stable coins, ahead of digital assets. And it just shows that the opportunity is so tremendous, but doing it at a place like Circle, where cultural high integrity and trust and values and building great products at the same time is what's catching me.
Justin FriedmanAnd that maturity in the marketplace has certainly become evident. I was a regulator in 2020, 2021, 2022. And I remember uh kind of joking uh you know, are these stable coins or are these just low volatility coins to sort of contrast with the more volatile cryptocurrencies like Bitcoin that um people were making bets on, but looking also for assets that they could actually transact in. And stable coins have clearly emerged as an instrument to do
Why Circle Built ARC
Justin Friedmanthat. Nowadays, you're spearheading ARC at Circle, which is a new layer one blockchain built for stablecoin native transactions. I gather that the ambition for ARC is to be more than just a better settlement rail. Circle is ambitiously calling this the economic operating system for the internet. So let's explore what that means and why did Circle decide to build its own chain after years of positioning USDC as a trusted, borderless, interoperable digital dollar that was designed to support use cases like retail payments, cross-border remittances, and enterprise grade money movement. What's new?
Rachel MayerTotally. So, I mean, just from the vantage point of the product and the team that we've built, we've deployed USDC to dozens of blockchains throughout the years. And being a product manager, you do that over and over again. You sit in hundreds of calls with different participants, developers, institutions, banks that use USDC. And we just found that the requirements for real financial infrastructure across public blockchains weren't really met. So we saw that there was a gap between financial institutions and developers to really build with USDC and with stablecoins. We saw three main things. Number one is the network tokens at the using gas for network tokens had tremendous volatility, post lots of accounting questions. And whenever a user or a business wanted to abstract that network token for just simple, like a stablecoin payment, you had to introduce all these crazy things like SDKs and account abstraction. So that was just an obvious, like aha moment. Like, what if just stable coins were the gas layer for a public blockchain? What would happen? Then the second is public blockchains are great for all the reasons that we love them. Transparency, auditability. Um, it's fun uh to see what happens in a block explorer, but that's not how the real financial system really works. And, you know, lack of privacy is a key deterrent to a lot of these major institutions, moving, going beyond proof of concepts to real, real flows every day, even just the effects flows, like those are private. Um, but existing systems never built privacy at the core. They were always built it on. They were either like an application on top, they lacked the right like auditability rules, and they weren't really done right with intention and purpose to solve the rules. Um, and then the final thing is, you know, when you sit in these meetings uh selling, you know, stable coins and products and networking layers, they don't want to be locked in into one ecosystem, right? They want to explore different ecosystems from public blockchains. So uh we didn't want um, we saw an opportunity to not build an ecosystem that was in a silo, but that was connected and with an interoperability layer from the get-go. Um so you could use uh a liquidity hub, but then freely go to wherever, you know, the end user at the end of the day from a neobank wants to go. They want optionality. Uh, and so with those three pain points, we really decided to anchor uh what ARC is. Uh and yes, it is the economic OS for the internet. It's a financial platform for real uh financial activity to thrive on chain. And it solves those three things. Uh, stable coins as gas, so you have predictable uh financial settlement using real money that is now regulated in large parts of the world. Uh alongside the public chain, you have the ability to opt in into a private payment if you choose that shares synchronous date with the public blockchain, but it doesn't sacrifice composability or auditability with a person uh business's uh financial rules and auditors. And then you're not locked in. So one, if you use ARC and if you deploy an asset in ARC or a wallet on ARC, it comes automatically with CCTP, uh Circle's uh main interoperability layer. So you can move an asset, not just USDC, but any asset that you deploy to and from uh the the dozens of blockchains that uh that Circle and ARC are already connected to. Um so it's really designed for payments, effects, agentic commerce, capital markets use cases, solving those three problems at its core.
Justin FriedmanRachel, you mentioned the open nature of blockchains and how that is fun and also useful and provides sort of a voyeuristic opportunity for people to uh see where value is moving on the internet. But for real-world use cases, like I think about payroll, privacy is essential, right? No employee wants everyone to be able to look on the internet to see how much they're getting paid. Employers, of course, want to keep that private as well. So as you build this in natively, what are the privacy features that you're offering and how are they configurable on ARC?
Privacy With Auditability And Compliance
Rachel MayerTotally. I mean, you nailed it. Even now, the proliferation of, say, like stablecoin debit cards, like they're great because it allows you to spend your USDC or stablecoin balance. But now I've seen like tracking dashboards that like imagine if all like your credit card and chase points were like visible on chain. Like that's not that's not great.
Justin FriedmanUm, and so all my friends would be asking me to take them on trips.
Rachel MayerThat's right. Or or Uber Uber eats them some ramen in my case. Um but Arc uh really delivers what we say, uh privacy without the sacrifice. Uh so it delivers confidentiality without breaking auditability, composability, or regulatory compliance. As I mentioned, blockchains today are bolt have you know bolted privacy on after the fact, either as applications or as like standards thereafter. Um, but what ARC enables you to do is it it shares the same validator set, it shares the same execution uh methodology. So it allows you to opt in into a private transaction. And what that would do is that would shield the financial data of that blockchain transaction with preserving the full auditability, meaning you, as the contract owner, as the wallet owner of that private transaction, can you know grant a view key or delegated view key to your auditor, your regulator, your accountant, et cetera, so that they can also see what the details of that transaction entail, but no one else can. And that I think is the balance that you know no other blockchain really provides, is that you can shield your assets in an environment where the details aren't really exposed to the public. Um, but you can, you know, the people that you need to see the transaction can still see everything that they need to.
Stablecoin Gas For Seamless Payments
Justin FriedmanCan we talk a little bit about ARC's approach to collecting gas fees and how that makes transactions more seamless? I had a recent conversation with another guest about a scenario where, say, I walked into a store and decided what I was gonna buy and brought it up to the counter and presented my credit card for payment, and the vendor asked me, Do you have a dollar bill to cover the transaction cost? And then I had to fish a dollar bill out of my wallet. And I'm like, wait a minute, I thought I was paying with a credit card. What's going on here? That seems like friction that is going to discourage the use of stable coins for payments. So, how have you solved this problem?
Rachel MayerYeah, so every transaction is priced natively in stable coins and it starts with USDC. Um, so if you wanted to go buy, you know, a coffee or send a treasury payment, uh, that is likely going to be priced in a stablecoin already. And it's gonna be priced primarily in dollars. Um, so if you already have USDC in your wallet, you don't need to acquire any other token. You don't need to actually do anything. All you have to do is simply approve the transaction for the payment that you want to do, and it's deducted from your wallet automatically, seamlessly. Um, and then that is you know the core gas of the network. Uh, and it's paid out to validators and it's seamless. You don't need any account abstraction, you don't need any, you know, uh SDK in between. Um, and that's the beauty of USDC is that USDC is already integrated into thousands of these endpoints in any network. You know, Visa settles in USDC, Rain accepts cards in USDC, all the exchanges, Coinbase and Binance. So you don't even have to go and acquire USDC because more likely it's already seamlessly embedded into these liquid networks. Um and you know, gas is extremely low, right? Like that's where the market is headed, is that gas is a tenth of a cent. Um, so you you barely even notice it. Like on a million dollar payment, it's the same as a sub, you know, $1 transaction.
Justin FriedmanSo it's there is no variable component.
Rachel MayerUh it it is, it uses EIP 1559. So for the most part, it should stay at that base fee, uh, which is a tenth of a cent. But if the network is conjection congested, it will try to smooth out with a moving average. But for the most part, it'll stay very, very low.
Justin FriedmanGreat, great, great. So there's something pretty significant embedded in Circle's decision to build ARC as its own layer one. I want to unpack this with you. Circle has historically been a token issuer, and ARC is an infrastructure play. You're not just issuing dollars anymore, but you're actually building the network that those dollars run on. So, what does ARC mean for USDC's ambition to be the on-chain global reserve currency?
Rachel MayerYeah, um, I think because we're solving those problems that I mentioned: lack of privacy, lack of interoperability, stable coins as gas, um, the trusted validator set, which we can get into shortly, uh, we we think that that's an unlock for net new USDC liquidity to move on chain. Um, and so you know, the big, the big banks that we're working with that want to do uh really exciting things, going back to my roots around stablecoin effects use cases from tokenization like BlackRock and their Biddle Fund and Money Market Fund and brought ETFs to DTTC, who's exploring tokenized equities. Um they're all excited about ARC because it solves those problems. And because ARC uses uh USDC as uh the starting uh native eligible gas currency, it's a wedge. It's a wedge for more USDC to flow. It's a wedge for ARC to be a liquidity hub for this type of activity. Um, but again, it's it's interconnected with wherever USDC is, whether it's a local banking network, whether it's an exchange, a DFA application. Or the 30 sum plus blockchains. It'll make uh we we see it as a big opportunity also for USDC liquidity to grow.
Trusted Validators And Governance Choices
Justin FriedmanTalk to me about trusted validators.
Rachel MayerYes. Yeah, I mean, it was one of the key decisions that we made early on in building this layer one. Um so ARC is permissionless to use and deploy a contract. Uh, but um, but we we thought that there's a big opportunity in um bringing on a set of aligned stakeholders to run this financial infrastructure. Like we talked about ARC is not just an another layer one. Like we would truly see this as building uh the next set of financial enterprise grade uh internet infrastructure. And what that requires, uh frankly, it's not like yOLOing, you know, a small like client node in Africa. Like that is okay. And obviously we welcome that for RPCs, but if you don't, if you want these uh four nine commitments, the commitments to um, you know, operational um integrity, to sanctions compliance, for example, um, you need aligned stakeholders that are committed to running this infrastructure. Um, so we really, you know, we chose a to build a validator set intentionally with a permission validator set that has you know that vision aligned. So we announced the foundational validator cohort, uh, which includes BlackRock, DTTC, MasterCard, MoneyGram Visa, Standard Chartered, Galaxy. So uh it's really they're they're creating a network to run you know financial infrastructure companies from all types of businesses and developers. Um it's you know the first L1 of its kind to launch with this set of validators. And I think it just speaks to the nature of you know what Circle brings to the table, the problems that we're solving with ARC as a whole, uh, and that this this is really foundational infrastructure uh for financial uh activity.
Justin FriedmanSo from a governance perspective, is that an ongoing process? Is there like a team at Circle that's vetting and measuring these partners and measuring them against certain criteria that you've laid out?
Rachel MayerYes. Yeah. So at this time, you know, Circle is the initial steward of the ARC network. Uh like every layer one has a development company behind it that's uh uh developing the core network, setting the initial standards and rules. That's the role that Circle is playing right now. Um and so we, you know, we're really stewarding like what those network standards, especially from the validator set, like what you know, the uptime, the hardware, the requirements, um, you know, uh uh the different uh upgrade cadences. There's just a whole list of things that like a proper network should run. Um but in time, like we do, you know, we have all these great institutions at the table. Again, putting my product hat on. Um, I want to listen to like what they want and what they need for their use cases and their requirements and start building this in a you know distributed governance um method that will evolve over time.
Circle Payments Network And The Sandwich
Justin FriedmanSo Circle has also been rolling out solutions to promote liquidity and strengthen the functionality of USDC in cross-border payments. What is the Circle Payments Network?
Rachel MayerYeah, Circle Payments Network um is a network that uh allows uh different financial institutions to um enable um uh financial payments seamlessly using staple coins. So the the core innovation is that before in corresponding banking, uh you had to like agree with one other counterparty a bilateral agreement. And that agreement is, I'm sure you you know this, you probably did this in your job, dozens of pages long outlines when things go wrong, what happens, um, you know, hours, liquidity, quote. Um what the network is trying to do is abstract all of that in, again, like networks and rules and standards and governance, um, and allowing counterparties um to transact with each other using stable coins. So, you know, the first the first um instance is the stablecoin sandwich. Um, as you know, the the start with what the real problem um not a vitamin, but uh what's it called? Uh a shot.
Justin FriedmanDefine define the stablecoin sandwich for our listeners.
Rachel MayerYeah, a stable coin sandwich is when the end users want um to send a payment from one jurisdiction, say United States, uh, to Colombia. That's my favorite example. Um uh they don't need to see USDC or any stable coin in between. All they see is I sent a payment from my bank, um, and that payment is gonna land in a bank in Colombia. Um but instead of going through that complicated uh correspondent banking network that's subject to banking hours, low liquidity, and perhaps you know unclear rates that you don't have visibility into, um, now it's going through stable coins. And in CPN's case, uh Circle Stablecoin Network, it's going through this new payment network that we're bootstrapping and growing. Um, so they've agreed to settle stable coins against each other 24-7 on different blockchains using on-chain liquidity, um, but the user never knows. Um, and so the beauty is like you have the same liquidity, oftentimes a better price, because there's net new liquidity sources on-chain that weren't in this traditional system. Um, and it'll settle instantly when the banks and the payment rails are closed. Uh so I can send you know a payment from one country to another, never know that it used stable coins, but it settled instantly, um, either at the same cost or cheaper.
Justin FriedmanSo
Fast Finality Meets Fraud Reality
Justin Friedmanthe legacy cross-border money movement system suffers from various costs and risks, um, particularly around pre-funding uh money in the delivery jurisdiction and settlement that takes multiple days. You're promising sub-one second finality for transactions on ARC. So, you know, why is that an improvement?
Rachel MayerWell, it's an improvement across so many vectors. Um, I mean, it's it one improvement across just traditional banking hours, right? I mean, banks close at 5 p.m. Even FX markets, they're 24-7, but as I mentioned, they don't settle 24-7. They're still at the mercy of these networks. And against traditional blockchains, um, you know, Ethereum still settles every 12 minutes. Uh, and so to have um deterministic sub-second finality that's powered by very robust, you know, tendermint BFT consensus mechanism where you know that the math and the code say that that transaction cannot get reverted, I think is a very powerful property that only a blockchain can provide.
Justin FriedmanHow are you thinking about issues like scams and fraud, where that instantaneous settlement may actually be a problem rather than a feature?
Rachel MayerYeah, it's a good question. Um, you know, with the increased velocity of money, uh stable coins increase the velocity of money. That's a good thing, right? Like most blockchains today on a good day power more transactions than what Visa does in a good day. Um but you know, it also comes with the the cost of more scammers, faster liquidity draining. And I I think the industry is trying to really grapple with, oh, what what have we done here, right? Like if we if we have you know all this great liquidity and instant finality, uh we have a we reap a lot of benefits, but scammers and bad actors will always take advantage of that. Um and so I think that's why, you know, at some point uh uh uh the blockchains, you know, need at different layers of the stack need to have proper controls. Um so for example, um, you know, the permission validator set um uh really provides that additional layer of control. Um uh the interoperability solutions that we have, like they're great that they can offer fast transfers, but maybe they start being more smart and they have you know time lock answer, time lock um solutions where, okay, well, a net new address is trying to move millions of dollars associated with a contract that historically has bad risk behavior. Uh it that contract doesn't need to just have a blanket like instant liquidity withdrawal to another network. Um, so we are definitely evaluating this new market and with AI and with Methos. Like it's just gonna, it's only gonna get even more um intense. Um, and so that's why you know we're we're really uh taking our time in private mainnet, um, buffing up uh a lot of these playbooks and operational procedures to really have um a strong, solid launch.
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Justin FriedmanAnd I I think that's something that a lot of people are waking up to. Just because the technology allows instantaneous movement of money doesn't mean it necessarily has to happen instantaneously.
Rachel MayerRight.
Justin FriedmanWe're just figuring out that that doesn't have to be a barrier, that doesn't have to slow you down, and instead, you can put these controls in place and move money, say, within minutes, you know, which is pretty good and a pretty decent improvement over multiple days. It doesn't necessarily have to happen in one second.
Rachel MayerYeah, exactly. Like we can be, as technologists and blockchain specialists, like we we don't have to be like zealots, right? Like if if something needs to slow down or or you know be evaluated, like that's okay because trust and safety is critical to allow these real economic activities to flow onto these new networks and have you know comforts that they that they're already accustomed to in traditional financial services.
Justin FriedmanWho among us hasn't fired off an email in Gmail and then quickly uh reconsidered and clicked on the unsend button within that 30-second window?
Rachel MayerExactly. I mean, we have explored and done research on reversible stable coins. Uh it actually uh uh it's a R ERC20. Um so I'm I'm really keen to explore at least that same experience that you just described for a stablecoin. But is opt-in? Shouldn't be the default version for every stablecoin because then it's a uh uh governance fiasco.
Justin FriedmanOkay, let's get back to foreign exchange. Circle
StableFX And Local Stablecoin Growth
Justin Friedmanintroduced stable FX on ARC, which enables institutions to access and settle on-chain between select stable coin currency pairs with reduced counterparty risk. So stable X is stable FX is replacing what?
Rachel MayerYeah. Um I don't know if it's replacing something. I I think of it as a net new financial primitive that is really only possible on blockchain Rails. Um, so stable FX, the benefits of it are the institutional aggregated FX liquidity using these local stables. Um so on ARC, we already have north of 10 local stable coins deployed of the same caliber of circles issuing standards for USDC. Um, MXN peso, Brascillium REI, Korean won, Japanese yen, Aussie dollar across U10 and EM from major banks or major exchanges issued on ARG. Um and so StableFX uh aggregates uh that liquidity from these local stable coins, which are connected to their own settlement bank liquidity. Uh, and we provide competitive competitive pricing with low slippage for seamless 24-7 FX uh markets. Um so when I talked about uh that uh that the best quotes like you only get if you're a client of Circle, um StableFX uh is trying to replicate that liquidity but fully on chain. Um and it's not necessarily fully permissionless for any consumer to use, um, but because the endpoints in the stable effects are already major crypto participants, um, it's spreading that liquidity throughout the different parts of the ecosystem. You know, it can it can serve as a liquidity for uh like a Uniswap X router or JP Morgan, like FX, you know, daily repo and FX use cases, or you know, a fintech trying to replace their agreement with the bank to just connect with this liquidity. Um and so, you know, it also has simplified risk, I would say, because it uses escrow contracts. Um so I'm not you know necessarily relying or taking your word on a legal contract that you have to deliver me currency. It's it's sitting in escrow and you can see it on-chain. Um, or if it's in private state because you have an audit key, you can also see it on-chain. Um, and so uh, you know, I'm really bullish stable FX. Um really bush, bullish uh on-chain FX in general. Um, it hasn't yet happened. Um, but I think with ARC, with the use cases that we're focused on, the local stable coins and you know the the trust that Circle brings, uh, we're on the cusp of the use case taking off.
Justin FriedmanExciting. So Circle's partner stablecoins program exists to help issuers of non-USD stable coins scale by connecting these fragmented domestic markets into a global network. Who can participate in the partner stable coins program?
Rachel MayerIf you're deploying a local currency stable coin um uh in any any any country uh and you uh abide by um you know circle standards of reserve management, of um high-quality banking, of um you know, auditability and trusted issuance, um, bonus points if there's you know regulatory regime in that region for stable coins. Um please welcome and apply to the the partner program. Um we want you know stable coins to be successful. Look, today the market is 99% dollar-denominated stable coins. Uh, even Circle has EORC, and that is the largest euro stablecoin in the market. Um, I think it's around 500 million uh ERC. But you know, I don't know if you would agree. I think if we believe the thesis that money is moving on chain, um, well, there is, you know, local currency sovereignty all over the world. That is not going away. Um, so I do think more and more of these local balances will come on chain. They'll likely come on chain through their local neo banks and have growth, you know, through the use cases, whether it's a fax, remittance, local DeFi, local, you know, tokenized yield. Um, and over the next few years, dollar-denominated share will likely still exist as it does today in the market. Um, but more and more share will be uh taken by local stablecoin issuers and currencies.
Justin FriedmanIt's interesting to me because uh so many years of fighting dollarization, Argentina has recently embraced dollarization. But that's not true in most places. And so I wonder in which parts of the world are you seeing local stable coins emerging interest in going on-chain in those sovereign currencies that are not US dollars?
Rachel MayerUh I would say two markets that come to mind are Brazil and Japan. Um both have thriving financial markets, um, obviously with you know bond issuance, thriving local rates, good credit systems, and um strong local pride as well. Um, so you know, I used to trade Brazilian Ray. Um they had dollar local accounts and Brazil, you know, Brazil exchanges, Brazil denominated accounts. Um the Japanese banks, uh, they've you know also enacted uh local uh stablecoin uh regulatory laws. Um I'm seeing you know also interest in participating um with you know better rails between JPY and Brazil, which also coincidentally have like a large remittance corridor, given that there's a fairly large Japanese population in Brazil. Um but those are two markets that come to mind that you know both obviously welcome um dollar economics and robust trade with the dollar, but have strong local uh sovereignty and are at the edge of financial innovation too.
Justin FriedmanSo what is the basic premise of what Circle is building here? Is the argument that you just can't disrupt global foreign exchange without having these local currencies on-chain to match? Is the local stablecoin ecosystem robust enough to support that? And and what will it take to get there?
Rachel MayerYeah, I think it it's all driven by use cases, right? And like needs. Um so uh the more that uh the end use cases grow, and I'm thinking um higher yielding assets and cross-border payments as the two drivers of where FX would interplay. Um so if a local person, either in the US or in Brazil, for example, wants a product that yields north of you know US free interest rates, um, well, crypto actually provides um uh great opportunities to do that, whether it's through tokenized assets or looping, et cetera. Uh, and then the marginal balance will be left in those local currencies. Um, and then that's when you know dollars to Brazilian rye will happen. So the more that the core need is solved, uh, either through the business and consumer needs, and again, I think the drivers are like faster payments uh for remittances as well as higher yielding DeFi and tokenized asset real risk case, then you'll start to see effects to bro launching.
Justin FriedmanOkay,
Competing Stablecoin L1s And Differentiation
Justin Friedmanso you're not exactly building in a quiet market. The stablecoin layer one race has become one of the more consequential infrastructure contests in crypto. Plasma launched in 2025 as a layer one backed by Tether and designed for stablecoin payments, featuring zero-fee USDT transfers and a Bitcoin bridge to enable Bitcoin to be used for smart contracts. Like Arc, it runs on a native gas token denominated in a stablecoin rather than a volatile asset. There's a self-custody wallet, and this network has access to the 600 million or more global users of USDT. So when this was rolled out last fall, the TVL spiked, but active addresses and transaction volume dropped pretty precipitously in the months that followed as the launch incentives expired. There was renewed interest with the wallet rollout. Whatever we might think about the underlying fundamentals here, it's a live network with some volume. Then you have Tempo, which is a different kind of bet. And this is incubated by Stripe, which is of course one of the essential global payments players, which powers e-commerce all over the world. And that launched this year with impressive design partners and leveraging Stripe's distribution, which reaches global e-commerce in most of the countries in the world. So ARC is a USDC native network with circles, institutional relationships, and the regulatory track record behind it. What do you have going for you? How will ARC succeed? In this competitive landscape.
Rachel MayerYeah, I mean, any product leader or entrepreneur sees competition, and I think it's a big market. And that means tons of opportunity ahead of us. Stable coins today are $300 billion in market cap, growing really fast. As we talked about, all of crypto is $3 trillion. So there is room for lots of players. And you know, ARC will coexist alongside these chains because I think they serve different use cases. As you said, Plasma and Stable, maybe they're focused on tether expansion, Stripe and Temo, they're hyper focused solely on payments. But you can think of Circle and ARC as focused on all on-chain financial activity. Like we're really building for financial institutions, the agent economy, and developers, and marrying the best of what USDC brings, which is the innovations at the core of on-chain activity like DeFi with the trust that Circle can bring to the network. So other than the differentiators that we talked about, staple coins as gas, opt-in privacy, the interoperability layer, I think what more makes ARC unique is that it really comes with a full breadth of a platform behind it. It's not just a like standalone layer one competing against the standalone layer one. It comes with the depth of Circle's platform and USDC itself. So major GCPs around the world can connect through this network by just using USDC as gas. We're bringing dozens of assets to the chain imminently on public mainnet, USDC, EuroC, USYC, Circle Mint, the wallets, CCTP Gateway, Paymaster. We talked about the liquidity. CCTP today powers almost 90% of all cross-chain USDC activity. One second, one cent, one click, or one prompt now for ARC to support an even augment system. And I think increasingly a major differentiator would be how well you serve a gentech platforms. So we didn't necessarily talk about it too much, but ARC also has agent wallets, circle marketplace, nano payments for agents to pay even cheaper subscale 100,000 TPS, CLI skills, and even exploring like private payments with agentic flows using the opt-in privacy layer. So the TLDR is it's a big market, but really Circle is bringing the depth of its financial platform and trust and compliance to really serve these new economic actors, institutions, agents, and developers.
Justin FriedmanIn May, Circle held a token pre-sale which amounted to $222 million for the, should we call it the ARC token? The ARC token. The ARC token. And this feels like a you know significant market structure event. Post mainnet launch, what do we have to look forward to? Where do you hope to be, say, one year ahead?
Rachel MayerYeah, I mean that's a great question. Um I really think that we want to fill the vision of being an economic operating system. Um so uh that you know that means um agents transacting with with agents, um, improving the lives of everyday consumers and businesses, um, uh a new financial era where instead of just moving information, we're moving value and you know, evolving from a system that was moved for humans, but built for machines and institutions and consumers that use those machines. Um, so I hope that we fulfill the promise of you know, ARC being the hub for liquidity for these major economic actors. Um, I hope that we expand the institutional trust uh in this building financial infrastructure with validator set. Uh, and we continue to see traction uh with these use cases of capital markets, FX, and payments all thriving uh on ARC because without credit, you really can't have payments. Without payments, you can't have FX, and you don't have robust capital markets activity either. Um, so stay tuned for September 16th, which is the public mainnet launch uh for ARC and more to come.
Mainnet Launch Links And Closing
Justin FriedmanRachel, it has been such a pleasure getting to know you. Where can listeners learn more about ARC and Circles FX and local stablecoin strategy?
Rachel MayerUh for ARC, go visit arc.io or follow uh x uh x slash arc and for circle circle.com and see all of the stablecoin products uh as well as CPN and stablefx. It was really important.
Justin FriedmanAnd where can yeah. Where can we follow Rachel online?
Rachel MayerOh, x0x rachelita.
Justin FriedmanLove it. That's it for this episode of Crossing the Chasm. Find more interviews like this at This Week in FinTech on your preferred podcast platform. Thanks to Rain for sponsoring the series, and thanks to Rachel and Circle for this excellent interview.
Rachel MayerThank you, Justin.