Fortune Crypto’s 2023 Jealousy List

“‘What a year it’s been,’ said a member of the Fortune Crypto team—at least once a week,” is how we began this post last year, and, hoo boy, 2023 did not take its foot off the pedal.

Bitcoin soared. Ripple (mostly) won. SBF was convicted. CZ cut a deal. And Do Kwon ended up spending a lot more time in Montenegro than he’d originally planned.

Other outlets also did terrific work in covering these stories and many more, so with a nod to the OG Jealousy List, courtesy of the fine folks at Bloomberg Businessweek—which is relaunching next year as a monthlyBusinessmonth? BbgBizMth? bbm?—here’s some of the best stuff we’ve read this year, beginning with a brilliant piece of their own.

Bloomberg Businessweek: How Sam Bankman-Fried’s Elite Parents Enabled His Crypto Empire
By Max Chafkin and Hannah Miller

The cover said it all: “Meet the Parents.” This thorough and damning account of Joseph Bankman and Barbara Fried, esteemed Stanford Law School professors who “really opened doors for Sam,” explores the intricate role each played in their son’s building of FTX—and its calamitous demise. A friend of theirs quoted in the story notes: “It’s hard to wrap one’s head around ‘How could they not know?’ The most sense I can make of it is that it was blind faith. They didn’t have the full picture.” This story is as close as we’ll ever get to the full picture.
—Justin Doom, editor

The New York Times: Their Crypto Company Collapsed. They Went to Bali.
By David Yaffe-Bellany

What’s fun about this gem of a profile is that it gets at the tone-deafness of many in the crypto industry, where making a quick buck is often the be-all and end-all. The Three Arrows Capital founders, Su Zhu and Kyle Davies, were responsible for one of the largest bankruptcies in crypto in 2022, but they seemed unfazed by losing billions of dollars, so much so that they sailed away to Bali. Also, what a fun last two paragraphs:

He left the restaurant at midnight, strolling down a busy street lined with outdoor bars, where murmurs of late-night conversation echoed in the distance. He was beaming.

“If anyone has any problems,” Mr. Davies declared, “just go to Bali.” Then he turned, swaying slightly, and walked into the night.
—Ben Weiss, crypto fellow

FT Alphaville: U.S. dollar dominance is facing a crypto-yuan hostile takeover
By Jay Newman and Richard Carty

Reporting on crypto, even by top financial publications, typically overlooks the geopolitical struggles that have made it such an ideological lightning rod in capitals around the globe. Those struggles are defined by the efforts of China, Russia, and others to weaken the hegemony of the dollar and undermine U.S. influence around the globe. This piece of FT commentary provides sophisticated insights into the financial great game and how U.S. rivals are using blockchain technology—particularly stablecoins—to open up new financial corridors beyond the control of Uncle Sam.
—Jeff John Roberts, editor

The Wall Street Journal: How Sam Bankman-Fried’s Psychiatrist Became a Key Player at Crypto Exchange FTX
By Alexander Osipovich, Hannah Miao, and Caitlin Ostroff

You may not think of a psychiatrist as essential to a multibillion-dollar company, but at FTX the in-house shrink, or “coach,” was more than just an amenity. Dr. George Lerner, who also served as Sam Bankman-Fried’s personal psychiatrist, apparently helped FTX employees with everything from suicidal thoughts to dating advice. This story, which dives deep into what Lerner added at FTX, opens a window into the demanding and problematic work culture at the now-bankrupt crypto company.
Marco Quiroz-Gutierrez, reporter

Time magazine: Effective Altruist Leaders Were Repeatedly Warned About Sam Bankman-Fried Years Before FTX Collapsed
By Charlotte Alter

As journalists sifted through the rubble of FTX, one particular strain of thought came under heavy scrutiny: effective altruism. Sam Bankman-Fried, Caroline Ellison, and other FTX staffers were believers in the philosophy, which, at its most basic, preaches that, with our limited financial resources, we should focus on maximizing good. In a series of articles, Time dug into the effective altruist movement, and this piece illustrates the complicity of some of the group’s leaders in enabling Bankman-Fried’s rise.
—Ben Weiss, crypto fellow

New York Magazine: How the Winklevii’s Second Act Went Bad
By Kevin T. Dugan

“I’m 6-foot-5, 220, and there’s two of me,” a semi-fictionalized Cameron Winklevoss famously said in The Social Network, introducing the world to the towering twins who got rich by suing Mark Zuckerberg and dumping their winnings into Bitcoin. As Kevin Dugan artfully details in this new profile, the Winklevii are back at their litigious hijinks, now waging a legal battle against former business partner Barry Silbert and the Digital Currency Group. This time around, they may not get another chance.
—Leo Schwartz, reporter

TechCrunch: Ordinals creator views his Bitcoin-centric creation as ‘digital artifacts,’ not just NFTs
By Jacquelyn Melinek

The invention of Ordinals helped transform the once-high-flying NFT industry in 2023. As TechCrunch writer Jacquelyn Melinek writes, the NFTs which are “inscribed” on the smallest denomination of a Bitcoin were immediately popular—although their creator did not imagine how they would catch on. Casey Rodarmor said his creation filled a special niche in the NFT market for collectors looking for “on-chain, immutable NFTs that are there forever.”
—Marco Quiroz-Gutierrez, reporter

Bloomberg: Crypto’s Most Powerful Woman Speaks Out as Crisis Rocks Binance
By Muyao Shen and Justina Lee

Crypto is often reported from a U.S.-focused, English-speaking perspective, which means many of the most interesting stories—and figures—are often ignored. In this terrific profile, Bloomberg was able to spend three hours with one of the industry’s most enigmatic leaders—the Binance senior executive Yi He, who happens to also have children with founder Changpeng Zhao—with the interview taking place in Dubai and conducted in Mandarin. As crypto continues to gravitate outside the U.S., it’s the type of coverage that will prove the most valuable to readers.
—Leo Schwartz, reporter

The New York Times: How a Crypto Fugitive Upended the Politics of a Troubled Balkan Nation
By Andrew Higgins

While he was known on Crypto Twitter for trash-talking “the poor,” in the real world former Terraform Labs CEO Do Kwon was using his wealth to influence an election in Montenegro. While being held in jail in the Balkan nation, Kwon sent a handwritten letter to authorities talking up his “very successful investment relationship” with Milojko Spajic, leader of the Europe Now Party. When word got out, Europe Now fared worse than expected at the polls. Through a series of interviews with Montenegrin politicians, Andrew Higgins elaborates on how a meddling crypto entrepreneur added more instability to an already tenuous election.
—Marco Quiroz-Gutierrez, reporter

Rest of World: The workers at the front lines of the AI revolution
By Andrew Deck

Everyone is writing about AI and the myriad ways it will transform the global economy, but how many publications included a graphic at the top of a major story in which a young woman’s photo on an ID badge transmutes into a cyborg and back again? Rest of World does a lot of things really well, but perhaps what it does best is visual storytelling. Throughout this story are sleek side-by-side comparisons of tasks completed with or without AI, how long each took to complete, and what each cost to produce. The potential effects of generative AI on workers the world over could not be made clearer.
—Justin Doom, editor

The Verge: AI Is a Lot of Work
By Josh Dzieza

AI will automate, AI will liberate, AI will free us from drudgery! That’s been the (paraphrased) rallying cry for many in Silicon Valley over the past year. However, that’s only true for some, per this feature from The Verge: 

Much of the public response to language models like OpenAI’s ChatGPT has focused on all the jobs they appear poised to automate. But behind even the most impressive AI system are people—huge numbers of people labeling data to train it and clarifying data when it gets confused.
—Ben Weiss, crypto fellow

The New Yorker: A Coder Considers the Waning Days of the Craft
By James Somers

It wasn’t so long ago that “learn to code” was a mantra at education and business forums across the land. Today, AI is on the cusp of rendering large swaths of the once-prestigious position obsolete, leaving many to wonder what they will do instead. In this beautifully written elegy, Somers explains the delights he finds in what many of us consider to be a forbidding and mind-numbing activity. A veteran coder who rode the wave of coding’s zenith, when firms like Facebook and Google coddled early twentysomethings with lavish pay and nap rooms, Somers offers a look at the near future where ChatGPT replaces most of his once-indispensable labor.
—Jeff John Roberts, editor

The New York Times Magazine: Everybody Knows Flo From Progressive. Who Is Stephanie Courtney?
By Caity Weaver

Meetings? Glitter? #VanLife? “Endless Appetizers” at TGI Fridays? Caity Weaver has you covered. Her latest masterstroke is a serious but somehow still laugh-out-loud profile of a woman most of us see every day but know very little about.
—Justin Doom, editor

Slate: I Ate at the Italian Restaurant Where George Santos Is Often, for Some Reason, Spending Exactly $199.99
By Alexander Sammon

It may not come as a surprise that we love a good scammer story here at Fortune Crypto. And if anyone could beat out Sam Bankman-Fried for grifter of the year, it would be New York’s own George Santos. In this gonzo investigative piece, a reporter tries to get to the bottom of the Santos campaign’s mysterious restaurant charges by going to his favorite Italian joint in Queens and sampling its average fare to try to sniff out fraud. If only SBF spent his billions on gnocchi.
—Leo Schwartz, reporter

How stablecoins are accelerating dollarization in the Global South—and why financial inclusion needs Web3 solutions

In today’s hyperconnected world, the flow of money across borders can be either a lifeline or a chokehold for entire nations. For too long, the global financial system has favored the privileged, leaving many countries in the Global South grappling with economic inequality and the political instability that comes with it. Web3 technologies, however, are routing around the incumbents, with new tools for financial inclusion and economic empowerment. It’s a story of transformation, where digital currencies like Bitcoin and USDC are bridging gaps and changing lives.

Consider this: Wiring money from Nigeria to Ghana takes longer and costs more than physically driving it across borders. Why? Because traditional wire transfers bounce through New York and London before returning to Africa.

Innovators like Nigeria’s Dickson Nsofor have recognized the need for a better way. Nsofor’s quest began four years ago when he founded Korapay, a Pan-African payment-infrastructure company. He viewed blockchain and cryptocurrencies as media of exchange, not as speculative assets. That insight led him to create a platform that leveraged these Web3 inventions for cross-border payments.

Today, Korapay is the largest cross-border business-to-business remitter in Nigeria. It processes billions in payments through Bitcoin, USDC, and other crypto assets while settling transactions in traditional fiat currencies. Most remarkable, many global companies use Korapay’s services to exchange Nigerian naira for U.S. dollars without even knowing they’re using cryptocurrencies and stablecoins. This shows how innovators like Nsofor are already retooling the engine of traditional finance from the bottom up.

Just why are stablecoins like USDC growing so popular in Africa? The answer lies in the broader context of economic disparities, currency instability, and the desire for financial independence.

In Nigeria, for example, over 40% of the population is younger than 15. Young people are embracing cryptocurrencies as a means of transcending the limitations of local currencies. With increased mobile internet penetration, freelancers and gig workers can now opt for payment in digital assets that hold their value better than local fiat currencies subject to hyperinflation and market devaluation. In an interview for my new book, Web3: Charting the Internet’s Next Economic and Cultural Frontier, Nsofor told me how every one of his young Nigerian employees would prefer to get paid in USDC, USDT, or even Bitcoin rather than naira because those assets are a better store of value, and in the case of stablecoins, more useful.

This shift toward dollarization—where locals prefer assets like USDC over fiat money—has implications far beyond financial convenience. It represents a seismic shift in economic opportunity: Individuals can work for internet-native organizations anywhere in the world and accumulate wealth in stable digital assets.

Whether the dollarization of these economies will be a net positive to the world is unclear. The collapse of local currencies under dollarization could further destabilize fragile governments in volatile regions. The Central Bank of Nigeria, for instance, initially took a hostile stance toward cryptocurrencies, even proposing a ban. While its leaders have recently hinted at creating a regulatory framework for stablecoins and tokens, the consequences of such moves remain uncertain. Last year, the governor of the Bank of Pakistan, Reza Baqir, told an assembly of business and government leaders in Saudi Arabia that his bank was considering a ban on all digital assets over concerns of dollarization. He was worried that the very bank he ran would cede control over money and interest rates, and was willing to take drastic measures. That ban never took effect, and Baqir is no longer in the job.

Despite these challenges, the adoption of digital assets marches on. Even the U.N. High Commissioner for Refugees has turned to blockchain technology to distribute digital cash to displaced persons in war-affected regions like Ukraine. This not only protects the funds but highlights the broader appeal of digital assets.

The adoption of cryptocurrencies and blockchain technology in Africa and beyond is more than a financial trend: At first, it’s a survival strategy, and then it’s a platform for thriving economically. Above all, it’s a testament to human resilience and innovation in the Global South. Let’s recognize Web3’s potential to create a more inclusive and equitable financial future for all.

Alex Tapscott is author of Web3: Charting the Internet’s Next Economic and Cultural Frontier. The opinions expressed in commentary pieces are solely the views of their authors and do not necessarily reflect the opinions and beliefs of Fortune.

Learn more about all things crypto with short, easy-to-read lesson cards. Click here for Fortune’s Crypto Crash Course.

Sam Bankman-Fried denied pre-trial release by SDNY judge: ‘The premise is incorrect’

Judge Lewis Kaplan on Tuesday denied a request from attorneys for Sam Bankman-Fried to release their client before his upcoming trial to allow him to more thoroughly prepare for the proceedings.

Among the arguments made by Kaplan, a judge in New York’s Southern District, in a three-page memo pertaining to United States v. Sam Bankman-Fried is that the FTX founder, who was indicted in December, already has had 7.5 months—and “extensive access”—to review materials electronically.

It’s likely the defendant would have had even longer to prepare outside of a corrections facility were his bail not revoked a month ago following allegations of witness tampering, which included leaking the diary of Caroline Ellison—the onetime CEO of FTX sister firm Alameda Research and SBF’s onetime girlfriend—to the New York Times.

Bankman-Fried, who’s facing at least eight charges that include wire fraud, lender fraud, and securities fraud, ended up trading his parents’ home in Palo Alto for the Metropolitan Detention Center in Brooklyn. The latter, his attorneys have argued, lacks adequate internet access.

Additionally, Kaplan writes in the document released on Tuesday, “…the premise of the defendant’s position here is that he personally is entitled to review and consider every single piece of the discovery in this case, to generate unspecified work product in respect thereof, and so on. But the premise is incorrect. Defendant is represented by a substantial team of extremely able retained lawyers.”

Bankman-Fried’s lawyers, according to the same document, also intend to call to the stand at least seven expert witnesses.

Kaplan closed his remarks by writing that the immediate ruling to deny Bankman-Fried’s pre-trial release “does not foreclose a further application on a more factually grounded and persuasive showing.”

The trial is scheduled for Oct. 3.

Jury selection is underway.

FTX was once valued at $32 billion.

Learn more about all things crypto with short, easy-to-read lesson cards. Click here for Fortune’s Crypto Crash Course.

Future of Finance: Blackrock’s Nair on how the firm’s Aladdin tech has evolved and what the ‘portfolio of the future’ will look like

Blackrock was born in 1988 and so was its proprietary tech platform, Aladdin, which is short for Asset, Liability, and Debt and Derivative Investment Network. Sudhir Nair joined the firm in 2000 as an analyst, and he’s now a senior managing director and member of Blackrock’s Global Executive Committee. He’s also the global head of Aladdin, which is used by more than 1,000 clients and organizations worldwide to manage trillions of dollars in assets.

In a recent conversation with Fortune, Nair discussed what first drew him to the firm, how Coinbase benefits from Blackrock’s technology, and what it’s like opening up a whole new world of financial possibilities to the more than 130,000 Aladdin users in 70 countries.

(This interview has been edited for length and clarity.)

Can you walk me through what it was like starting at Blackrock and how the industry’s evolved since you got there?

I joined July 10, 2000, so almost 23 years ago to the day. I came to Blackrock after focusing in school on both finance and information systems, always being interested in this intersection of capital markets and technology, and really having an appreciation for how the founders of the firm have thought about that intersection—really since day one.

If you listen to Larry [Fink] and the others, a lot of Blackrock was built on this thesis that managing client portfolios and client money is really all about information processing. Effective information processing and turning data into information is all about having the right technology. So, when I joined, we were really in the beginning phases of taking what was then our internal technology, Aladdin, and building a commercial service-oriented business out of it. And I was fortunate enough to be one of the first employees that got involved there, really implementing Aladdin at our first large third-party client. 

Over the years, I’ve had the experience of wearing a variety of different hats and helping to support the growth of Aladdin, but also the commercial business. Currently, in my role as global head of Aladdin, it gives me the opportunity to oversee all aspects of the commercial, the product, and the engineering teams responsible for its delivery—both for Blackrock, as the operating system we use to run the company, but also for the Aladdin community, the third-party clients who leverage the technology in a similar fashion.

Do you get to take any credit for the name? How did “Aladdin” come about?

There’s actually a funny story behind it. There are certain things we’re good at. One of the things we’re not great at is naming things. And I could give you a whole bunch of examples…but the name Aladdin actually came from a user of one of our clients. They had, internally, held a contest, for lack of a better word, for what to name the technology, and one of their employees contributed to the creation and evolution of that name.

What else can you tell me about its early days?

On the sell side, we were very accustomed to using computers to understand the valuation of securities, the risk of securities, creating new securities, and then marketing them and taking them to the buy side. So the thesis behind Blackrock was: Could we use that same type of technology, not to create and structure different and new security instruments, but to build and manage more effectively portfolios, as a fiduciary on behalf of clients?

So Aladdin, in its beginning days, began as a risk-management technology, helping to understand the answers to very basic questions like: What do I own? And where do I own it? And what is the performance of this asset relative to the benchmark. And it just grew and grew. And the more you can keep all of your employees on the same page, using the same data, collaborating on the same technology, the more effectively you can serve your clients and the more efficiently you can operate.

What we found was that many of our asset management clients who came to Blackrock, even in the mid 1990s, were trying to solve the exact same data challenges and process challenges that Blackrock was using Aladdin for. And so, the ask, apart from managing their money, was, “Can we use the same technology that you’re using? Would you deliver it to us as a service?”

How do you benchmark its success? Is it how many of your clients are using it now vs. five years ago? Because it’s just such a broad, all-encompassing product, which you’re also using?

It is broad, but it’s also not one-size-fits-all, right? If you really look at the organizations that leverage it today, they’re all leveraging the same technology, but they’re all a little bit different, reflecting the fact that these organizations are at different parts of their own digital journey.

How many of your clients are blockchain or crypto companies? And are there plans to add more functionality for them directly into Aladdin?

Great question. I mean, when we think about it, from a strategy perspective, we’re solving for the whole portfolio. We have a multitude of clients who have different investment perspectives, and, over the past few years, you know, blockchain and crypto assets have for many of these clients become increasingly important, and increasingly important parts of their overall asset allocation.

I think it’s also reflective of how we’ve thought about expanding and opening Aladdin to drive more partnerships with third-party partners who can enhance Aladdin’s value proposition. For example, with Coinbase, we’ve established an integration partnership such that clients who want to trade and manage crypto assets, starting with Bitcoin, have the ability to leverage Aladdin in conjunction with Coinbase’s capabilities in order to do that. So we’re not building them out natively ourselves—we’re working with who we feel are industry-leading partners and participants to integrate with Aladdin on behalf of our mutual clients.

Let’s say I ran a crypto exchange—a legit one—and came to you and said, “Hey, I want to use Aladdin to make it better.” What are two or three use cases where it could really turbocharge my business?

The role we would play would be similar to what we’re doing with Coinbase to build that deep integration that makes it seamless and easy for a portfolio manager to manage client portfolios, to access the markets and liquidity via that exchange. So for an organization that’s managing that exchange, that can be quite valuable, because it provides deeper and closer productivity and connectedness with some of their largest clients.

Blackrock has been in the news lately over its proposal for a spot Bitcoin ETF. Perhaps you can’t speak directly to that, but compared with where crypto started, more of a Wild West ethos, what do you make of so much recent TradFi interest in the space?

We have been, and continue to be, invested in the space, continuing to explore opportunities to leverage either the technology or crypto as an asset class, to support clients. It’s not my role to have a view on any asset class, good or bad. It’s my role to make sure that we’re providing the technology, data, and analytics to help support those asset classes and clients. But, without a doubt, as you’ve mentioned, we continue to see many institutional clients interested in the asset class, so our focus has been on making sure Aladdin supports that.

What’s next for Blackrock, and for the future of finance?

There’s no shortage of stuff that we’re working on. I would say probably the biggest area of focus, when we think about the future, is the portfolio of the future. We believe it will be very different from the portfolio of today—much more personalized, much more customized, much more holistic. It will blend active and passive, public and private, it will have elements that are tax aware and tax efficient, it will manage and maintain individual sustainability preferences, it will have all sorts of aspects and characteristics that, quite frankly, will put a lot of strain and challenge on much of the existing infrastructure and ecosystem. So when we think about our strategy, and what’s next, it’s all about preparing BlackRock and our clients to be able to build, manage, and distribute that portfolio of the future at scale.

Another piece would be sustainability, which continues to be of high importance for many of our clients. One of the areas where I think we’re in a really pioneering position is around climate. We’ve created a capability called Aladdin Climate, which allows you, within a client portfolio, to begin to understand risk sensitivities—both physical risks and transition risks to a variety of different assets—and recognize how a series of different scenarios around climate change may play out.

We’re optimists, and we tend to be excited about the future. And there probably hasn’t been a more dynamic and fast-paced industry than technology. Even in the last year, the amount of change and energy going toward something like A.I. has been significant. And we think that’s going to be just one example of a catalyst for some of this change.

Future of Finance: Circle’s Allaire says U.S. lawmakers may be ‘late to the party’ with crypto, but it won’t hold back the world’s largest economy

Boston-based Circle, best known for the USDC stablecoin it launched in 2018 with Coinbase, was founded in 2013 by Sean Neville and Jeremy Allaire, with the latter since serving as CEO.

Nearly a decade later, and with some $27 billion of USDC in circulation, Allaire spoke to Fortune about the history of Circle, regulations here and abroad, and the parallels between FTX and the dotcom crash.

(This interview has been edited for length and clarity. Shortly after the interview, the company announced layoffs, telling Fortune in a statement that they amounted to “a marginal reduction in headcount” and that Circle would be “continuing to hire in key areas of focus on a global basis.”)

It’s been 10 years now, right? Has that just flown by for you?

I don’t know, crypto’s like dog years; a year’s like seven years. [Laughs] But, no, it doesn’t feel like 70 years. I mean, in some respects, it’s gone by quickly, but it’s also been just an extraordinary evolution over that time, from where we started with a big vision and an extremely nascent technology and industry. And now, it’s really, truly finding its way into the mainstream of the financial system—it’s being integrated into so many things.

And yet, as I say to a lot of people, I still feel like we’re still in the very early stages of this. When I look back at the example of the internet, a lot of things take 20 years to really get to maturity. The first 10 years seem like there’s a lot of maturity, but then the really dramatic growth happens in that second 10 years.

Looking back, what are one or two goals you absolutely smashed, and what are one or two surprises you just didn’t anticipate?

When we started, my cofounder and I, we talked a lot about this idea that there needs to be an HTTP for money, a kind of a protocol where you can represent fiat money. And that that protocol would allow for interoperability and for kind of a global commodities settlement layer, and that would be built on blockchains. And we really believed that needed to exist. But the surprise was we thought a lot of different industry stakeholders would come together to manifest that and build that. We had initially wanted to be building what I would call broadly the application layer of the implementation of digital currency. The surprise—after we’re around four years, it was very clear to us—was that no one was coming together to build that, the protocol for money on the internet. And we saw, now that it was technically possible: We can do it. And so we gave up on building the application layer and said, “Let’s just build the kind of platform and protocol layer—and build USDC.”

When we started, we very much believed that for this to achieve long-term scale and mainstream adoption, we needed clear regulations and clear policies around digital currencies. I used to say in the early days, eventually we’re going to have these, it’s going to be a G7 topic with coordinated responses of the biggest governments in the world. I used to get booed out of the room for saying things like that because the early ethos was so anarchist. But I’m very pleased to see where we are today, actually, because this is now front and center a policy topic.

That leads into my next question: People sound optimistic about U.S. legislation, almost universally saying, “It’ll be stablecoins.” Would you agree with that? And if we get that, will legislators be more comfortable building out a larger framework?

So, I am also in the optimistic camp. Globally, I talk about something like the Financial Stability Board, the convening of all the top financial regulators from the G20, to have clear, coordinated, globally normalized crypto regulations for both the markets side of this activity and the stablecoin side of it. 

A lot of people don’t realize, but it was the United States, through the Financial Stability Board, that drove a set of policy recommendations for how to regulate stablecoins several years ago. And now that’s happening—in the U.K., in the EU, in Japan, in Hong Kong, and Singapore. In all of these jurisdictions, national laws are coming into effect.

U.S. government leadership—and I include in that the White House, the Treasury Department, the Federal Reserve—they all are focused on, “Let’s get stablecoin regulation in place.” And there’s bipartisan support for that in Congress.

And then markets?

Markets regulation is a fast follow—I don’t think it’s like years and years. I think it’s a fast follow because the rest of the world is doing this, and it’s not helpful if you’ve got a whole bunch of major jurisdictions and you’ve got inconsistencies across those. There’s a lot of pressure to get something done. You hear that in statements from leaders in the White House, you hear it in statements from Janet Yellen. And clearly, people in Congress see that as well.

But the market side is a lot more complicated. And because of the structure of the U.S. regulatory system, with the alphabet soup of regulators, it’s just a little bit harder to work through. But I think it will—that has to get done. I feel like something could get done even in an election year.

Is it a bit of a double-edged sword being able to point to what’s happening in Europe or the U.K. or Hong Kong as proof of progress, because there’s also a fear of the U.S. falling behind?

I think it’s a little bit of both. There is that kind of market competition. I just came from two weeks in Asia, and I had a chance to meet with multiple governments and the regulators, and it was fascinating to see, in Japan and Hong Kong in particular, like a whole government, not just the financial regulators, the whole of government where Web3 is being viewed as a national priority. They want to attract capital, companies, startups, builders; they want to encourage the biggest companies in the biggest industries to implement Web3 technology.

You’re not hearing that from the U.S. government. You are seeing a difference, and I think that is affecting where capital will go and therefore where talent will go and where companies will form. I think that’s real.

The U.S. may be late to the party in terms of getting these policies done, but it is the biggest economy and has the biggest technology industry and the biggest financial system in the world. And when the U.S. does lay down its rules, it’s going to be a highly competitive market.

Recently, we’ve seen a TradFi rush into crypto, with Blackrock, Fidelity, and a few others trying for a spot Bitcoin ETF. What do you make of this?

It’s interesting, and I think we have a very interesting vantage point. We’ve established meaningful partnerships with the likes of Blackrock and Bank of New York Mellon, and with major industry companies like Visa and MasterCard and Square, and many others like Robinhood—a lot of traditional firms in the payments world. Despite the turbulence of last year with the various bankruptcies, frauds, all these awful things—the period of time I like to call the blast radius from the FTX debacle. But we’re well past that, and at the same time, the technological progress just keeps cranking along.

It’s a little bit like after the dotcom crash. There was a period where if you said “e-commerce” or “consumer internet,” people were like, “Don’t even talk to me, I don’t believe in that anymore.” They just didn’t, and VCs would not invest. But then the tech stacks kept evolving. The next generation of browser technology, the next generation of digital media technology, broadband infrastructure, Wi-Fi infrastructure, mobile devices, all these things just kept going and lit up a whole new era—Web2. And then people are like, “Oh, actually, this is real. And it’s scaling. And it works.”

So what’s next for Circle?

Over the next year or two, in particular, we’re really focused on three things. One is doing our part to make sure that the technology and the infrastructure that make stablecoins usable on a massive scale is possible—improving wallet experiences, eliminating the complexity of knowing what blockchain you’re using, gas fees, the sort of stuff that to an average person is total nonsense. I don’t need to know anything about TCP/IP or SMTP to use email, right?

A second thing is making sure that stablecoins like USDC are as widely available as the demand for digital dollars in the world presents. So we think about the partnerships that we need to build with banks and non-banks that provide access to the financial systems in all of the most important markets in the world.

And then the third thing—it’s not in our control—is ensuring that there’s good, solid legal certainty for stablecoins so, in two years time, every household, every business, every corporation, and every financial institution knows what a stablecoin is, knows how to hold it, use it, what and how to account for it on their balance sheet—that it’s treated as digital cash in all the major markets in the world.

What do you see for the future of finance?

When I think about the next five to 10 years, it’s actually the programmable money era—it’s the breakthrough inventions that come with software, entrepreneurship, the fusion of blockchains, smart contracts, A.I., really transformative things that will reshape the very essence of what a corporation is, how trade and commerce happen.

I get asked, “What do you think that’s going to be?” and that’s like asking in 2007, when the iPhone came out, “Tell me about all the different inventions that are going to happen with mobile software on a smartphone.” It took having an open platform where more software creators could innovate easily, and that scalability to unleash the creativity of entrepreneurs everywhere. And then there was an app for that.

It’s similar to when you lit up broadband for everyone, and you enabled Wi-Fi-connected devices—what became possible, right? Television was reinvented; gaming was reinvented. This is a similar kind of thing in the guts of the way commerce and finance will work. And that, to me, is profound.

Future of Finance: PayPal’s Fernandez da Ponte on how B2B payments could spur crypto adoption worldwide

Jose Fernandez da Ponte is four years into his second stint at PayPal, and to say the global financial landscape has changed since he left for banking giant BBVA in 2015 would be quite the understatement.

Now a senior vice president overseeing all things blockchain and crypto, Fernandez da Ponte, who’s also worked for Hewlett Packard and McKinsey, discussed why it’s vital for U.S. politicians to provide clarity on digital assets—and how, even with regulation by enforcement at peak levels, he still sees the whole situation as “glass half full.”

(This interview has been edited for length and clarity.)

You’ve held several key roles at PayPal. How would you describe this one?

I have the luxury of leading our digital currencies business, and we’ve been involved in that for the last—I would say in earnest—four years or so. We believe as a company that a significant part of commerce and payments is going to move to digital payment rails, and that’s why we’ve focused on digital currencies writ large—we care about cryptocurrencies but also fiat-backed stablecoins and central bank digital currencies.

Doing payments for the better part of the last 20 years, this is probably one of the first times that I see technology that can substantially redefine payment rails—cost, speed, programmability—things we couldn’t do before that we can do now. So that’s kind of the genesis block of why we got involved in the space.

What drew you, perhaps on a more personal level, to crypto?

I got into the space in around 2015, when I was working in banking, and the first thing that I was doing was trying to move funds from bank accounts in one country to a different country using one of the blockchain protocols. If you look at financial innovation, a lot of that in the last 20 to 30 years has been on the front end—user experience—but not so much on the way that money moves. When you’re able to do things that represent an upgrade on the traditional correspondent banking system, it really opens up a ton of possibilities. And that’s what got me excited.

When you’re able to reduce that cost using this technology, then you can start to do things that you couldn’t do before—you can start to do micropayments of cents without a fixed fee, you can start to open streaming payments, a channel between you and me for a fixed fee, and start to move value one way or the other. It’s a very exciting set of possibilities.

In the crypto world and the digital currency space, there is a ton of focus on the transfer of value from one wallet to another wallet. Part of what we bring into the equation, and where we think we can help, is that a payment is way more than just moving the value between two wallets. A payment is, in essence, the settlement of a contract, the settlement of a liability. And that means that if I send money to you to send me a good, I need to be able to get that money back if the good never arrives. There is a contractual component of a payment that goes beyond the movement of value between wallets. And that’s where the programmability of blockchains plays a really important role.

I probably use Venmo or Paypal a couple times a week. When I talk to other people, many are like, “What’s the point of crypto if I can just use Venmo?” How do you answer that question?

That’s a very good use case, and—(laughs)—I agree with you, Venmo is a fantastic platform. But let me give you one example of something that you can do with crypto now that you couldn’t do before.

As you know, we enabled on-chain transfer, so people on the platform have the ability to move crypto in and out of PayPal wallets, a year ago. And now, thanks to crypto, you can actually send value from a Venmo wallet to a PayPal wallet. There is a little bit of this fallacy in use cases, when people ask, “Why do I need crypto to do this?” or “Why do I need a blockchain to do this?” In many cases, it is not a requirement. There are other ways to do it. But this is a very effective way of doing it.

A lot of your work has had an international focus. When it comes to PayPal users overseas—everyday people more so than companies—how does the blockchain help them?

I wouldn’t claim by any means that we are in mainstream adoption territory yet, but definitely we are a bit beyond that [initial phase]. People are going to be using it, definitely, and it’s going to be more useful when you have stable, digital instruments that run on blockchains. That’s why we spend so much time thinking about stablecoins and CBDCs, and, basically, if you have a Bitcoin or Ether balance with us, you can use it to pay anywhere that PayPal is accepted.

In the crypto ecosystem, I do think that you will see cross-border ecommerce is a use case that we’ll see more and more. Imagine that I am a consumer who’s in a Latin American country and I want to buy from a merchant in the U.S, but I don’t have a credit card enabled for international transactions. I think that we will see, in some of the specific verticals, that digital currency is a really good fit.

Can you talk a bit more about what’s next in terms of adoption?

Gaming is a good example—anything that is media related. And I think that we’ll see adoption in business-to-business payments before we see that broadly in consumer-to-consumer payments. Imagine you are a midsize business in the U.S., and you have a supplier that is abroad. Your alternative today to pay them is that you need to make a wire transfer, and it’s going to cost you 50 to 100 bucks. You need to do it 9 to 5, Monday through Friday, during banking hours, and that money isn’t going to be transferred for three days, right? Now, if you have an instrument where you have 24/7 availability, instant settlement, it’s dollar-denominated, and it’s cheaper, that’s the rational decision. In a global context, I think that’s where you will start to see more and more adoption of this.

B2B makes a ton of sense. Do you have any kind of timeline in mind for when consumers similarly embrace this tech?

If I had a crystal ball? Three to five years out. My hope is that in five years we will be in a place where maybe there’s $1 trillion in stablecoin-denominated assets. And when you multiply that by the velocity with which stablecoins circulate, you’re starting to talk about trillions in commerce volume that can be enabled. Really, it’s less of a forecast and more hope and intention.

If Congress were to pass any sort of crypto law, do you agree it would probably be something less spicy at this point—probably some regulations around stablecoins? And if that happened, what happens next?

I think that it’s super important that there is clarity on stable coins in the U.S.—just look at what is going on in the world. There is very clear regulation in places like Europe about what you can and cannot do in the stablecoin space. There is sustained progression toward clarity in places like the UK and Singapore and Hong Kong and Japan. The world is moving toward more clarity, not less clarity. And it is important that the U.S. is part of the team that you see in that market.

I do believe I am kind of on the “glass half full” part of the discussion here. I am relatively hopeful that we will see legislation that is passed for stablecoins in the close future. And there seems to be momentum in Congress. I think it is fundamentally important that there is that clarity in the U.S., because if not, there is a risk that the U.S. falls behind in this whole digital policy space.

Sticking with more macro-level themes, what comes to mind when you hear the phrase “future of finance”?

I think the most macro thing—stablecoins and cryptocurrencies are one flavor of that—is the tokenization of assets, different assets that exist in physical or traditional form. By tokenizing them, you make them easier to share, to fractionalize, to move. If you are an asset management firm, you might be thinking about how you can tokenize a money market fund. Or if you are an art dealer, how you can tokenize illiquid assets like art. Or if you are a company in the entertainment space, you’re trying to figure out how to tokenize a physical ticket to get into a concert.

This technology enables creating digital representations of assets that wasn’t possible in the past. And in different parts of finance—from wealth management to banking to payments to remittances—the macro theme for me is the tokenization of all formerly liquid assets.