I think it's 9:00, so we can get started with the first session. Welcome everyone, to the 11th Annual Future of Commerce Conference. My name is Ken Suchoski. I'm the analyst on the payments team at Autonomous Research. We're excited to have Jeremy Allaire, Co-Founder, Chairman and CEO of Circle. Jeremy has spent the last 13 years building Circle, and its stablecoin, USDC. He's been very instrumental in the development of stablecoins as a category in stablecoin legislation more recently. So Jeremy, welcome. Thanks for coming today.
Thanks, Ken.
I prepared a list of questions. I think we're going to open it up to the audience at the end of the session, so if anyone has questions for Jeremy, feel free to raise your hand and we'll get those answered. With that, let's get started. Jeremy, you and the team have been very busy lately, launching Arc. You did the announcement of Tazapay acquisition a couple of weeks ago. Maybe we'll start with Arc. Arc Mainnet went live a week ago today. Talk to us about the first week of Arc. What's happening and what should people be watching for?
Yeah, thank you. As I shared, and you can watch the launch event if you're more curious than what I'll say here, but Arc is by far the most significant platform launch in the company's history. My view is this is ultimately an opportunity as large or larger than USDC. The ability for the world to move more and more of its economic activity onto the internet, to have the financial activity, the contractual activity, the agentic activity running in software machines on the internet is an enormous opportunity, potentially as large as clouds themselves. This infrastructure is just a tremendous opportunity. As an economic operating system, we really take a very broad horizontal view as to what this will ultimately become. We're very proud of what we've been able to achieve with the launch. I think, several key highlights.
I think the first is, this is a network. This is the first time a major operating system like this has been stood up and is being operated by the world's leading financial infrastructure companies. This is not a network run by Circle. This is a network run by Circle, by Visa, by Mastercard, by the DTCC, by BlackRock, by global systemically important banks and other leaders in digital assets. It is a network with stakeholders from those firms, and it is a network where we will all share in the economics as this scales. The cohort of firms that are running this infrastructure is very unique. This is also one of the very first blockchain operating systems that is designed to meet the requirements of the regulated financial sector.
It meets the requirements of central banks, of securities and markets, regulators that oversee exchanges, and this is critical. If we're actually going through a phase where we're going away from kind of early adopters trading cryptocurrencies to actual money, markets, currencies, and financial contracts running on the internet, you have to have a network that is held to those standards. So it is running to those standards. That is very unique. Also, we launched this network with extraordinary support across the global digital asset ecosystem. Every major exchange, every consumer wallet, every custodian, most of the major market makers and trading firms, the leading apps that are deployed on other protocols, most of those all launching day one. Basically, this is lit up and is available and is already integrated into almost every platform that is out there. So that is tremendous.
I think, in terms of total value on the network, I think we're already approaching $1 billion of value on the network. That's one of the fastest deployments of capital into a network in the history of blockchain launches. Now, day one, week one is still incredibly early. The right way to think about this is like when a new operating system launches, do you have great apps? Do you have good developers? Are the developers building apps? Are those apps getting traction? Are there repeat users? In an ecosystem like this, what you need to be focused on is transaction volume growing? Is the value of assets deployed on the network growing? Is usage and liquidity and in capital markets functions growing? Those are really the critical things, and the team is very focused on seeing those things be realized in the coming weeks and months.
Mm-hmm. Exciting times. Lots to follow there. Let's take an example of BlackRock deploying its money market funds on Arc or the DTCC tokenizing equities on it. What does Circle earn for these deployments? Is it a per transaction fee, a validator fee, some percentage of AUM? I guess, the question that we've gotten is just how does the revenue mix and model evolve over time?
A couple of things. I think the first is, the way we look at our business is as a kind of comprehensive full stack platform. Each of the pillars, the operating system pillar, the digital asset pillar, which is anchored in USDC, and the payments pillar, they have their own internal network effects and flywheels. They also have flywheels that roll against each other. Arc adoption drives USDC adoption, as an example. When we think about monetization, and we think about traction, we look at this across the influence that these have across the board. Each one needs to obviously have a stand on its own. Let me talk about that with respect to Arc. I think the first is Arc today, the most recent fully diluted value on the network was $3 billion.
Obviously, we believe that this is a network that has the potential to be valued much, much higher. Circle is a 25% stakeholder in that, and that stake will generate economic rewards to Circle based on the activity on the network. That is really key, which is basically, think of it as if you were able to have a stake in the revenue of AWS, what would that be worth? As more people build applications and deploy applications onto a cloud or something like this, the more applications that are deployed, the more traffic, the more usage, the more underlying demand on the volume, the more that generates value for the stake itself. It would be like owning a piece of AWS and the transactional revenue stream. In the first week of Arc, Arc network generated about a half a million dollars of transaction fees in USDC.
Obviously, that is all public. You can see it in real-time. There is a burst at the launch, but we will see how that sustains over time. Circle, obviously as one of the largest operators, receives those fees. Those fees will ultimately accrue also to Arc token over time and the company stake in that as well. Fee revenue is one and very significant. Staking rewards is another when the network moves to proof of stake. Secondarily, if you look at what we have launched with Arc, there is the actual kind of core network, operating system infrastructure, and then there is layers of other kits and protocols and services that we have built on top of it. Those themselves also have monetization in them, fee-based monetization in them. The kind of layers of services that we also provide all provide incremental fee-based monetization opportunities for us.
The question about what value comes from a BlackRock or a DTCC or other companies launching things like tokenized commodities, equities, other things, really the important thing there is twofold. I think one is all of these securities as they come on chain, the purchasing and subscription and redemption and trading is all going to be done in USDC. It intrinsically drives demand for USDC. You see that today where on different venues that are offering tokenized instruments for trading, USDC is the dominant currency that is being used there. What do you have to believe? You have to believe that tokenization grows, regulated tokenized instruments grow. As those grow, that drives fundamental demand for digital cash, for subscription, redemption, trading, collateral, et cetera. These are just fundamentally demand drivers on USDC as well.
I think the second is that it's also just very, very valuable. As these tokenized instruments come on chain, we can help drive and create interest rate markets, lending markets, credit markets on these instruments as well, which also then effectively the borrowed demand creates liquid demand for USDC as well. The maturation of, it's sort of like securities lending, but essentially the maturation and marrying of tokenized securities with on-chain lending markets is an enormous opportunity, and that's historically been a major growth driver for USDC, which is basically USDC has an enormous amount of demand as the borrowed asset for people in the on-chain economy, and we expect that to be an important driver as well.
Great. You just announced the acquisition of Tazapay, which brings, I think it's 60 + partners, 100 different payout markets into your ecosystem. How does buying payments infrastructure like licenses and regulatory approvals change your competitive positioning? Why was this the right asset to purchase at this time to achieve that outcome?
Yeah, I think as we've shared in prior earnings calls, CPN went from a concept and an initial launch to now maturing into a network that has real flywheels on it. The growth in financial institutions joining the network, the growth in the TPV volumes that are flowing across the network, the growth in the number of markets that you can both originate and distribute to, and then the use cases themselves. So we've seen that growth and have shared that. I think, a couple of things that we really have seen in terms of how do we accelerate this. I think one is an enormous amount of the demand for using this kind of infrastructure is in emerging markets. It's emerging market to emerging market. It's also developed market to emerging market. A lot of those flows are Asia anchored.
Both within Asia and Southeast Asia, but also between Asia and other markets. From our perspective, we really want to make sure that CPN has the best infrastructure possible for people who want to both originate and distribute in those markets. Tazapay has done a very good job. It's a young company. It's not a long-term company. Young company, fantastic product execution, operational execution, technical execution. They've built great relationships into financial institutions in these markets, and licensing as well. I think this is accelerative to product. It's accelerative to what I'll broadly call operations. Providing the operational support in these markets for the businesses and the payment service providers that operate in these places is really key. So scaling that capability. Then effectively lighting up the quality of service in some of these destinations and information points is very important.
Tazapay checked all of those boxes. Obviously, it's a transaction that has not closed, because it is subject to closing conditions, in particular regulatory approval. We have to go through the change of control efforts with regulators. Obviously, our expectation is that this will close, but that is ahead of us. Ultimately, once it does close, we will talk to the Street about what the shape of this is on a number of metrics. We'll continue to be sharing progress on CPN every quarter.
Great.
Yeah.
How has the mix of overall interest in USDC and stablecoins more broadly surprised you versus. When we were going public more than a year ago, are you seeing a use case or an industry group that's pushing harder and faster than you expected? Where do you think there's more room for growth there?
Yeah, look, just to put this in perspective, a year and a half ago, I would guess most of the people in this room didn't really know much about stablecoins or what this was. It was not closely followed. Obviously, Circle's IPO brought a lot of attention to this, and then the passage of the GENIUS Act obviously brought a lot of attention to this. All of a sudden, the world said, "Oh, wow, this looks like a very large, exciting opportunity," et cetera. Now, a year ago, or over a year ago now, the passage of the GENIUS Act was a very important milestone and obviously created some euphoria in the market. What's important about that, though, is that that was, in some respects, to the marketplace, a very clear signal, whether it's financial institutions or major corporations or governments around the world.
It's a major signal that this is going to be part of the global financial system, and it's going to be hardened to the standards of federal banking regulation. Effectively, we now need to figure this out. Everybody said, "Okay, we now need to figure this out, and are we going to have our own stablecoin? Are we going to make a consortium stablecoin? We're going to try and do all this stuff." Everyone's just running around like chickens with their heads cut off, trying to figure it out. Fast-forward. Okay. Now where are we? People have absolutely begun to better understand this, and we're now approaching a really critical milestone. What is that milestone? January 17, 2027, the GENIUS Act goes effective. It's not just a law that was passed, it is actually effective.
Legal digital dollars will exist in the U.S. financil system, in the global financial system. What will also happen then? FASB rules. Why are accounting rules so exciting and sexy?
I never knew that.
They really are. FASB rules that classify stablecoins that are issued under these laws as cash and cash equivalents. Why does that matter? It means every public company in the world, every financial institution in the world, can hold these and report their financials cleanly. But also from a compliance and risk perspective, everyone will understand what these look like. Third, Circle National Trust. Circle regulated as a national trust bank and integrating USDC operations into that national trust bank. Why does that matter? It means that counterparties, banks, capital markets participants, large public companies, can face essentially an infrastructure bank that meets all of these requirements. All of those things are really, really important because that is the basis for unlocking all of the utility of this.
That's a long-winded answer to get to the short part of the answer, which is, I think, what you're looking for. Which is essentially as these things progress and as they move forward, what I would say is we are seeing the world's leading banks, the world's leading capital markets companies, the world's leading securities issuers, the world's leading payments companies, the world's leading technology companies, and the world's leading commerce firms all looking at how they're going to implement and support legal digital dollars in their products in 2027. So I have never seen more interest from the world's leading companies in this than I have today.
The use cases are broad. What I just described is about reaching a point where this is generalizable, general purpose digital dollar money that can be used in the internet financial system, that is arriving obviously as we go through that. To me, it's shaping up to be a very exciting 2027. Obviously, I can't forecast what that means in terms of growth in any explicit way. But when analysts step back and say, "Hey, we think this is going to be trillions of dollars," you actually need it to be legal digital money if you want it to be trillions of dollars. That's not going to happen until you have that. That's a milestone that we're coming up on.
Mm-hmm. Yeah. So it seems like more of an inflection point as we get into-
That's right.
January of next year.
Passing the law, Circle IPO, interest in the space was an inflection point.
But actually the hardening of this technologically, operationally, legally, fiduciarily, if that's a word. The hardening of this is in my opinion, the real inflection point.
Mm-hmm. Totally. One thing we thought was interesting was the USDC transaction volume continues to ramp despite circulation holding fairly stable over the last few quarters. I guess as we get closer to the finalization of the GENIUS rules, the potential passage of Clarity, how are you thinking about the relationship between circulation and volume?
Look, there's a few things here. I think there's one which is a fairly generic thing, which is, if you look at the global financial system and you look at money aggregates, electronic money aggregates, physical money aggregates, $120 trillion of money aggregates, about $60 trillion of non-interest bearing demand deposits or cash. There's a huge amount of working capital money that is out there. What do you have to believe? You have to believe that digital dollars in this form will be superior as a working capital money, and that it will eat into that share over time. That's a general-purpose, generalized view. I think the second piece to this, though, is that one of the things that's obviously important and very valuable about this new infrastructure is that there's a commoditization that takes place in payment utility.
I've long said that this kind of digital currency will drive the cost of payments towards zero. There is a commoditization in payment utility that will take place. A corollary of that is that the marginal cost of storing and moving value approaches zero. We don't think about the marginal cost of sending an email or browsing a website or doing a video call because effectively, data has compressed towards zero. Money movement is similar. The point here is that the money stock has a higher velocity than in other parts of the financial system because the marginal cost of moving it and storing it is so low.
You're going to see, and we don't have a strong view as to what this looks like over three to five years, but it's very important, which is that the velocity and usage of the money is going to be far higher than the velocity and usage of, say, bank electronic money or certainly physical cash. Transaction volumes can scale, and the turnover and use of that money can scale on that same monetary base. However, people still need to hold working capital and payment money. Those aggregates also grow. The utility of that aggregate grows as well.
Okay, great. One of the questions that has become increasingly topical and central to the story is reserve economics. Maybe take us into the room and help us understand how these partnership discussions work across the long tail of distribution agreements that you guys have.
Yeah. So, a few things I would say, and obviously we talk about this often in our earning cycles and others, which is we have been over the past several years, leaning into distribution. We want to make sure that the world's leading platforms are participating in driving USDC. We are in the early stages of the development of this market. No one would say a $300 billion or $350 billion market is that big, right? This is a multi-trillion-dollar market. We want to win determinatively in terms of not just circulation, network effects, and utility. We absolutely want to win. This is a winner-take-most market structure.
We are currently by far the leading regulated player. We want to cement that. As we go into this phase where this goes from something that was primarily servicing the digital assets market and trading markets into a broad-based usage, we want to make sure that the biggest players in the world are committing in significant ways to drive USDC.
So obviously, we will structure economics on our own or together with Coinbase in some instances. We will structure the economics to make sure that USDC wins. There are network effects that come from that. Those network effects spill out into all holders of USDC and grows this pool of what we call unincentivized USDC as well. So that unincentivized USDC is the highest margin components of this for us. I think if we are marching towards hundreds of billions and ultimately trillions, I think the kind of, well, I will call it the permanent seigniorage that we can get from that can be extraordinary. As we have also said, and it is very important, is that activity in USDC does not drive OpEx. Okay. Nor does the amount outstanding drive OpEx.
We can scale distribution, we can scale usage and growth, and that can still be essentially very high contribution margins to us. It is a law of large numbers answer there. Now maybe just a little bit more specifically. We prioritize building very strong partnerships with the world's leading platforms. Not all deals are created equal. We announced yesterday this significant expansion of our partnership with Binance. That is a new five-year deal. They invested $100 million into the company. Just so people understand today, Binance is the world's largest internet financial super app. They have approaching 400 million users. Their product is used all around the world for people who are saving, investing and storing value and making payments. We estimate that 70% of the dollar stablecoin payment volume is run through wallets that are from Binance Wallet and Trust Wallet.
They are, when you think about real-world adoption of stablecoins today, they are the tip of the spear. Right now, I think there is approaching $30 billion of Tether on Binance. We see an enormous opportunity for market share shift there, and we expect that that platform will grow. They have the potential to be a billion-user platform. We want to make sure that we are the winning asset there. We want to make sure that the largest company in this industry that is expanding in all these markets, this is not just about crypto trading. In fact, huge amounts of the volume on Binance now are tokenized stocks. People are getting access to saving and investing in a wider array of things. So it is a huge opportunity, and of course, we are going to build a great set of win-win economics there that drives and grows the network.
Great. Okay. I was going to ask about Binance, but it sounds.
It is sort of related.
Yeah. So I guess in terms of what's changed, it sounds like you're incentivizing them more. There's obviously this $30 billion opportunity on their platform. That's really what's changing.
And growth.
And growth.
And growth. Yeah. We're not sitting here assuming the total value that's there is only ever going to be that and that no one's going to grow. Binance is an incredibly competitive company, and has an enormous user franchise, has their own intrinsic network effects. I don't think people quite realize, I think mostly people are like, "Oh, Binance is an exchange." They're really a financial super app, and most of their users in all of these markets really view this as their primary financial account.
They view it as a substitute for banking, for brokerage, for payments. It really is the financial account. It's an internet utility that people can access with software in all these markets around the world. As we've said, emerging markets are where the billions of users are going to come into this new digital financial system. They're the leading platform in those markets right now.
It's clear that some entities are willing to forgo interest income to use stablecoins. How do you guys think about the value that they're getting out of the platform, the USDC network, and anything else that you're offering?
Yeah. If you think about it, effectively what Circle offers today with our stablecoin network is a free payment system utility that anyone in the world can access and use. You don't need permission. You can download a piece of software, and you now have a free payment system. You can transact on it directly with any entity that has a wallet that supports it, and those transactions can settle in a fraction of a second and a fraction of a cent. If I'm a service provider, if I'm a product builder, if I'm a fintech, if I'm a creator of an application, I don't need to call Circle. I can just connect because it's open protocols on the public internet, and this is a global payment system that does trillions of dollars of transaction volume.
It has network effects, and when you plug into it, you know that, oh, I know it's going to work with all these other users and applications because they already have it. That is very powerful. You don't need to build a global payment system. You basically plug in for free. That's incredibly valuable. If you're a fintech and you're building a product anywhere in the world and you don't integrate to USDC, you're at a competitive disadvantage. People will adopt this because it adds utility for their users, and that's really valuable. It's sort of like when the web grew. If you didn't have a website, you're at a huge competitive disadvantage. Or when Facebook took off, it was like, if you didn't have a presence on Facebook as a business, you were at a competitive disadvantage.
This is a similar thing that is happening with digital currency money around the world. The second part of the answer is related to something I said earlier. Half of the money in circulation is non-interest bearing. It is payment capital, cash, working capital money. The world doesn't sit around saying, "Where's my interest?" Asset managers do, family offices do, corporate treasurers do. But there is a huge amount of the world that just knows that there is working capital money and cash money that just needs to be active and available, and that will continue to be the case. There will continue to be just huge amounts of that that are out there. Certainly we see that very much. If you look at incentivized versus un-incentivized USDC, it kind of looks the same kind of way.
Mm-hmm. How do you think about Circle on- platform USDC? Obviously, that is very important, but how important is that to drive growth in that part of the business? Maybe talk about why entities are putting USDC on Circle's own platform.
Yeah. Look, the way our structure works is when customers are using our infrastructure, our treasury infrastructure, our wallet infrastructure, our products, we get 100% of the income that comes from that. We are incentivized to grow that. Likewise, when key distribution partners build on our technology, that creates stickiness, and that kind of allows us to maybe grow the rest of the franchise with those firms. It is a sort of shared wallet opportunity as well. That also gives us the ability to construct win-win economics with those distribution partners as well. It kind of plays across all of those areas. I think it is one piece of the puzzle for sure.
Mm-hmm. Okay. I think you mentioned, so USDC on- platform, it is still 100% RLDC margin. That is the starting point, in terms of the economics. There is no payout to Coinbase. Perhaps there is some impact from the Hyperliquid deal. More broadly, should investors consider this to drive the bulk of the RLDC growth as more USDC is increasingly ported onto your platform at higher margins?
Not necessarily. I think as Jeremy Fox-Geen likes to say, there's a lot of puts and takes w hen you look at what kind of goes into that RLDC and RLDC margin. For example, Binance, there's an on-platform deal, but we're building aggressive economics to make sure that the world's largest platform preferences USDC so that we win. On one hand, that's going to drive network effects that drive o ff platform, but drive un-incentivized growth. As they scale, they'll earn their fair share. That's a 'take' out of the margin economics, but it's a 'give' in terms of growing network effect, growing network utility, and growing un-incentivized distribution as well.
Yeah.
On-platform does not necessarily mean it's 100% pass-through.
Mm-hmm. That's just the starting point, and then you're-
That's the starting point of the waterfall-
Right
that kind of flows through-
Sure
all of our distribution arrangements.
Yeah. Maybe explain to people the relationship between the incentivized and the un-incentivized USDC, and just what you are able to track internally on that. Just because I feel like that is not talked about as much across the investment community.
Yeah. Obviously, we can track all that. I think what we publicly report is our margin a nd our RLDC margin. We obviously publicly report, because it is disclosable, the sort of on-platform numbers. Coinbase does as well. But we do not kind of break out the incentivized, un-incentivized, et cetera. I think it is conceptually important for the Street to understand kind of internally, that that is the case.
Yeah. But I guess the thinking is you would incentivize USDC growth. That could lead to, obviously
Yeah
That transitioning into some un-incentivized-
Yeah
USDC down the road, and there's the flywheel. That's how you guys think about it.
That's exactly right.
Yeah.
That's exactly right. For example, if you've got a platform with 350 million users, or take Coinbase themselves, a platform with, whatever it is, 130 million users. While they're kind of keeping their economics on USDC, users on Coinbase, the USDC flows out. It flows out into on-chain protocols, applications, other services, wallets around the world. The same thing with a Binance or a Nubank or a Block or any of these other companies that have different types of integrations with us and into the USDC ecosystem. It drives broader circulation demand. It drives effectively all these other products and services that plug into our network, effectively creates that aggregate demand outside of those distribution platforms that we have.
Okay. I think we have 10 minutes left, so if anyone has a question for Jeremy, feel free to raise your hand and we'll call on you. Okay, Matt.
Sam Altman, he recently did a podcast, and he talked about and kind of agentic in mid-August, they published sort of an official developer cookbook showing OpenAI agents using SDK and x402 to micropayments with USDC. In the background of this time, Amazon Web Services and Cloudflare have launched some infrastructure that will support x402, as well. Just generally, how big of a priority do you think this is for OpenAI and some of the labs? They seem focused on it. Is there evidence that USDC is kind of their stablecoin of choice? Are any of these upcoming sort of development days a place where maybe we can learn more about what they're doing here?
Yeah. It's a great question. For those that aren't aware. We're leaning pretty hard into agentic, not just payments, but sort of agentic economic infrastructure. I think our general view is that a larger amount of the work that's conducted in the economy is going to be conducted by AI agents. Cognitive work, other work, and labor will convert into AI. A lot of that agentic work is going to cross firm boundaries and is going to be essentially AI working with and hiring other AI consuming data services, and other services over the internet. I think our general view is that the vast majority of transaction volume in the internet financial system will be mediated by AI. That is just our basic view right now, and I think we're in early stages of that.
Now, specifically, alongside a couple of other major industry players, a couple of years ago, we helped to develop a protocol for AI systems to be able to make transaction payments directly. That is the x402 standard. We are now a founding member of the open-source consortium run by the Linux Foundation, alongside the likes of Amazon, Cloudflare, Coinbase, and others. This is really important. This is essentially a standard protocol for the internet for AI to make and receive transactions. It is now starting to grow nicely. Of the transactions that are happening with this protocol today, as of last week when I looked, 99.6% of those transactions are done in USDC. As I like to say, the machines have chosen their money. USDC is a great medium for these, and I think we really like the early position that we have.
In terms of prioritization, I think the AI labs, the cloud companies, and infrastructure companies, they are all seeing this, and they all have efforts to stand up tooling to support this. I think that is there, and we see that in exactly what you just talked about.
Amazon, Cloudflare, any website publisher that uses those has the ability today to turn on a feature where when AI comes to consume your content or data, you can block them, and you can tell them what the fee is, and basically that gets done in USDC. That is a new capability just in the past couple of months that has started to come in. The AI developer tooling that integrates these standards is also very new. It is in these developer toolkits, things like that. We are in the very first inning of this, in my opinion. I think one of the very big things that is going on right now is, essentially enterprises, developers of applications, end users are sort of asking, "How can I trust an agent?
Under what conditions would I trust an agent to do something economically for me, and to know that what it is doing is not just a black box that might do something wrong?" Alongside these standards for how AIs move money, we also need standards for essentially having AI agents be able to prove the veracity of their work, so that basically we have trust and verifiability of the work of the AIs. That is a core capability that we are delivering as part of Arc. We demonstrated this last week at the Arc Mainnet launch. You can go watch the videos. There is something called Arc Agent Sector, an agent virtual machine.
These are basically ways that essentially the inference compute that executes the AI agent work can essentially have its work encapsulated in a system that proves how it's using the data, the work that it completed, and it can prove that in a defined way to the internet. That kind of technology is essential if we want to be able to trust the machines, basically, to do real economic work. This kind of convergence of these economic operating systems like Arc and these AI operating systems like the foundation models, the agentic economy as a general thesis, and we really see these technologies needing to work much more closely together. You will see more and more from Circle in this space.
You will see us pursuing more and more strategic partnerships, ecosystem partnerships, product development, and other things that accentuates this connection between AI systems, AI agents, and our on-chain infrastructure.
Anyone else? Otherwise, I can keep going. Okay.
I guess maybe you could talk to us about why you think the market structure is sort of like the one coin should win them all thesis. I guess the underlying question to that is, as we will hear from today, there is a number of infrastructure providers who seem quite focused on interoperability between coins, between chains. Just how do you think about why over time we should maybe converge back to one or two very significant coins. How do you think about sort of the intermediary time where there may be a lot of people trying?
Yeah. A couple things, and this is a theme that we talk about a lot. What we say, it is a winner- take- most, not a winner- take- all market. Winner- take- all would be there is one coin. Winner- take- most, there are several. I think this is a winner- take- most market structure with three to five players over time. There is going to be a most of the most. We are currently the most of the most in the regulated sphere. We intend to maintain that leadership position. The core of it is that stablecoin networks are platform utilities that have intrinsic network effects. They have liquidity network effects that liquidity kind of drives preference, and they have utility network effects. The products and services that integrate to the network create demand flywheels.
We have seen that, and that is exactly the story that has played out for USDC. Our position has only strengthened over time. The transaction volume of USDC has grown and grown and grown. As of the end of June, according to Visa, we had 70% market share of transaction utility. The second player after that was Tether, and then all other dollar stablecoins combined had less than half a percent of the transaction volume. Even though there are stablecoins where basically the stablecoin issuers are paying people to hold it, no one is using them. There is no transaction volume. There have been over $100 stablecoins launched. There are many regulated dollar stablecoins that have launched. Stripe had created a product to let people issue white- label stablecoins. They have done stuff with lots of different players. None of them have any traction.
None of them have any circulation, none of them have any transaction volume. It is a very, very difficult market to compete in. The moats are getting higher and higher. The liquidity moats, the utility moats, the global moats, the regulatory moats, the infrastructure moats are getting higher and higher and higher. This is a platform utility game. It is like cloud platform utilities or other internet platform utilities. That is the competitive basis for it. Now, I am humble in that I know that there will be efforts that achieve some success, that achieve some market distribution, and there is an incentive for the market to have multiple opportunities and opportunity sets. I think fundamentally that is what is behind that market structure. At the same time, we completely agree that interoperability is a major goal.
In fact, Circle runs the most widely adopted interoperability infrastructure in the blockchain space on the internet. Our interoperability protocol, CCTP, accounts for the majority of all traffic amongst blockchains. We did a major thing last week. When we launched Arc, we launched something called CCTPx, which is a new version of our interoperability protocol, and it opens up that interoperability protocol to any asset issuer. If you issue a tokenized stock on Arc, if you issue a stablecoin on Arc, a dollar stablecoin, a euro stablecoin, a pound stablecoin, any stablecoin. If you issue a tokenized commodity, any tokenized asset that you issue on Arc, you could actually ride the interoperability rails that we have already put onto over 20 networks around the world.
Arc becomes a great place for asset issuers as a liquidity hub, but also a great place for asset issuers that want to get distribution through interoperability. We are deeply committed to interoperability. We are deeply committed to providing that interoperability infrastructure to our competitors as well. If you have a competitive stablecoin and you launch it on our network, you can use our interoperability infrastructure as well. We view that as really important. We are the thought leader in interoperability. Obviously, that's an advantage for us with USDC, but we are also acknowledging that the market needs assets to be able to move across these ecosystems more readily.
Maybe just last one quick, then I think we will have to leave it there. Hal, do you want to go quick?
No, you can just-
I can try.
Yes.
I'm curious to get your thoughts in terms of the institution al adoption outlook, you know, where we are today, obviously, even though the country has been taking a regulatory and some political offsets. What's your outlook for that space?
Yeah. A couple things. I think, the first is it's very easy for us sitting here in the United States to get focused on the United States and the United States alone. The United States is a small part of the global ecosystem. What we look at is what's happening everywhere. Digital asset rules are proliferating everywhere, in markets everywhere. That's tremendous. In fact, adoption of digital assets, the vast majority of the adoption is not in the U.S. It's global. The mega trend here is there are digital asset rules and stablecoin rules that are proliferating in every major market in the world. We saw that happening through 2026. We continue to see it happening through 2027.
Just yesterday or this week because of UNGA in town, I'm meeting with leaders from many, many different emerging market governments. They're all passing their rules to light up this market. We just sort of see that is just a continuing trend. With respect to the U.S., very clearly, we have a legislative initiative that obviously did not pass right now, but very clearly, this legislation will find its way to the president's desk. I think everyone's committed to do that. There's obviously some large open issues around ethics that seem to have stopped the bill from passing through the Senate.
However, it is not slowing down the progression of rulemaking. We're now seeing accelerated rulemaking and accelerated guidance, and that's giving banks, asset managers, brokerages, custodians, other participants in the system the clarity that they need to be able to actually stand up and launch products. If you talk to the world's leading players in the financial sector, they're not slowing down. I think our general outlook is more and more products are going to be coming. You're going to see more and more accelerated products from established capital markets players as well as the emerging venues and others. The regulators here in the U.S., I think in the current environment are doing a very, very good job of promoting innovation, providing exemptions where needed, and promoting competition.
I think one of the things that you're seeing out of the U.S. regulators, SEC, CFTC, and the bank regulators, even the OCC as an example, is they want to see new competition. They want to see competition from new technology. They are not just letting the incumbents own this. They see that this is a disruption. They want to allow a free and fair market for all players to compete there. We're seeing all that happen right now, and we're very encouraged about it.
Great. I think we'll have to leave it there. Jeremy, thanks so much for taking the time and thanks for everyone for sitting in.
Thank you.