Privy co-founder Henri Stern on the Stripe acquisition and crypto's mainstream moment

but well, we got to find out how to get the audio. Yeah, we do. Um, oh, there was audio, says Fannis. So, we will figure that out. And, uh, and now there. Now, without further ado, we have our first in-person guest of the show. Welcome to the stream. How are you doing? Good to see you. Get to stand next to you.

See what it feels like. Welcome to the Ultra Dome. Hopefully uh you're you're looking cozy in that in that sweater. Hopefully you're enjoying the the rainy day in Los Angeles. I was told come to LA. It'll be nice. It'll be warm. And it's only it's like 300 330 days a year. It feels very warm in here.

It's actually more of a neutral temperature. But uh through the power of movie magic, it appears that we are in front of a warm heart. Anyway, please introduce yourself to the stream. I'm uh Henry Stern. I'm one of the co-founders of Privy. We build embedded wall software.

I was told to come here to help translate the French television. I'm French originally. I watch uh France. Are you a France 2 fan? I'm a a France 2 fan. Is France too fan? France 1, two, three, four, five. I think it goes into the 40s.

If I We're working on on iterations at this at this point in time politically and uh and I think uh TVPN is is welcome respite for uh for all French political watchers out there. That's fantastic. Yeah, it was fun uh telling the story of what happened over the summer.

It felt like flashback because the AI talent wars I'm sure you tracked them like in real time uh in July getting acquired. You were busy but still I mean I'm sure they broke through to you and you were aware of we saw these you saw it of course.

Um and everyone's wondering like hey what what's my comp package going to be next year? Well, we we so we normally don't do uh life stories on TVPN, but when did you actually uh when did you leave France, assuming you grew up there? Uh I grew so I grew up uh there till I was like 12 or 13.

Then I came to the US, which is how I shed my accent to some extent. Yeah, it's barely I don't even notice it. Um and and got very Americanized. So I'm a I'm an American uh person in so far as startups are concerned and I'm a French person in so far as like you know voting, passports and food is concerned. Sure. Sure.

Makes sense. Uh give us give us a playbyplay of the last few months. It's been busy. Uh it's been very busy. Um well there's like two parallel worlds. On the one side there's uh we we got acquired by Stripe. So um we had uh the great folks at Stripe reach out. I think you ganged us already.

I'll second gong because you closed uh retroactive gong. You got to hit one for closing, one for the announcement, one for closing course. uh and and basically so they they reached out in in around April. Um that's pretty quick and went through really what was a very very fast uh time.

So huge shout out to to the M&A team over there and and frankly to uh the entirety of But had you not had you not talked surely you you' never heard of Stripe before that? I didn't know what it was. No I I um No.

So obviously we knew Stripe and and frankly a lot of how we shaped our company and the way we wanted our product to work was based on what we saw Stripe doing.

We'd had talks with their crypto team and in general and we did a lot of work with the team at Bridge uh through joint customers that we serve together and the outreach was some version of listen we think wallets as uh distributed global bank accounts are an extraordinarily powerful primitive to have as part of the stack that we're hoping to serve.

Yeah, we'd love to talk to you about this the way that the way these work. Um, so we had a conversation and it very quickly led to to where we were and I think we we talked through what would it take for us to be uh excited beyond the general excitement of Stripe about like joining forces.

What would it take for us to accelerate? Um, and uh and we got there and then you know to their credit we moved really quickly. So by uh by May we were uh signed with a term sheet by uh I guess mid June we announced and uh and we closed in July. That's correct. Uh yeah. How how uh what was the pitch around like synergy?

Was it obviously they're well capitalized so you don't have to go out and raise anymore. They have a huge customer base of people who have saved credit cards through Stripe Link. Uh but then they also have a bunch of merchants who have done developer integrations with the API.

Like what stood out to you as like the most important piece and what was maybe less important than people might think? Yeah, I I think there are two parts to it. The first is how do we get this tech to mainstream? How do we get it to customers who otherwise don't care about crypto whatsoever?

And one of the things Stripe has been excellent at is basically hiding the rails behind, you know, extremely complex infrastructure. Exactly.

And you take these like you know hundreds of banking partnerships, you turn them into an API that just works and you enable, you know, in their case like commerce on the web for the last 15 years. And the question is as this stack evolves, how do we do the same for crypto? So that felt like very natural.

But I think for us the point was one it is uh being able to strengthen our teams across security infra and obviously across distribution to customers we wouldn't be talking to otherwise.

Um and two being able to plug into money money movement rails like making it that fiat and crypto are married to the point where they become indistinguishable from one another and where as a consumer of this API you no longer have to think about one versus the other.

So I think the the way I look at it is broadly we have two prerogatives. uh if stripe is AWS for money then this is a rail they should be uh leveraging and they are intent on leveraging and building up uh this is why they acquired bridge.

This is why they acquired us and broadly we want to be the best purveyors of money movement and storage systems on the web so that you can build completely global businesses uh on modern financial rails. That's one. Yeah. And then two is beyond the tooling that we provide.

Can we make it that every existing Stripe user today can benefit from these rails so they can provide you know cheaper faster global payments and they can enable anyone to hold dollars anywhere in the world. How do you think about the modern onboarding of the consumer?

Um going back to maybe 2021 2022 the way people would start I mean a lot of people were on centralized exchanges like oh I want exposure to Bitcoin or something. I'll go buy some and I'll go through the setup flow and KYC and whatnot.

And then uh the wallet era I felt like started with um NFTTS, different tokens that were sort of like getting traction on on Twitter. People would talk about them and then you'd have to be oh well to buy this I got to set up this this wallet. I have this specific wallet for Salana or I have a specific one for Ethereum.

Um and and people it was very it was a very like proumer activity. How do you think it evolves to a more consumer world uh going forward?

Is it like well my my my framework is there's the speculation era people are signing up for different services to speculate but I think what you had seen probably prior to starting the company is that eventually there would be this like more functional use case of like I'm going to sign up for products in general for specific purposes whether it's to buy things you know you know pay you think start with signing up or will it be like PayPal where it's like I get an email and I'm like I got to go claim that and then I set up the wallet.

I think there's going to be two and true.

I mean, broadly what we're seeing, so to your to your question of like, you know, what what's been happening these last few months, there's obviously what we've been doing at the the preview level, the stripe level, but then there's the space overall and the amount of institutional adoption that's coming.

And I think we broadly see it on three fronts. We see crypto as an asset class. So, how do you unlock basically access to these assets for traditional uh consumers? And you see it through, you know, JP Morgan giving access. You see it through I think Morgan Stanley is going to unlock spot trading on Erade.

uh you see it through we're working with uh Deutsche Bank um uh uh JV called All Unity on a European stable coin for support. Um, so broadly that's that's the the first part and quickly there.

So someone has a an account with a bank that has a brand that's probably been around for 50 or hundred or hundreds of years and and that particular web app or mobile app is like provisioning a wallet for them that they might not even know that is provisioned for them. Is that how you think that plays out?

I think we're see I mean this is I think where it leads to start I guess the the the the the broadly there's access to the asset class there's obviously stable coins and global distribution and the last is you know overall tokenized assets beyond you know things like tokenized equities or tokenized deposits is where you see players like you know Apollo or Blackstone getting involved and the way we're seeing this develop is you broadly have a move from cryptonnative startups to fintex and so what you just talked about is exactly what's happening with Neo Bank stack and a number of NEO banks that we're seeing provision wallets exactly as you're saying it which is as part of your traditional Neo banking app.

You'll have the ability to move your checking deposit or balance into a wallet that you control through which you can get for example uh yields on DeFi in a way that as interest rate go down becomes more interesting.

So that'll be phase two to then right now if you want to buy Bitcoin on Erade for example like you buy the ETF which is like a very abstracted like multi levels of abstraction it's not even self-custody and so yeah okay that that's break down maybe what's what are the institutions focused on like what are the kind of the categories they're focused on so one would be stable coins hey the these are going to be big we want to have a play here so whether that's uh leveraging them in the business or launching their own stable coin is There's opening up access to crypto markets to their users are another one.

What are kind of the other maybe are you thinking about uh less like sexy use cases for crypto like things like back office stuff or is that more on the bridge side of the business? Um it's a great question.

uh we are in so far as basically setting up you know you can think of a wallet in this in this new instantiation where the wallet is just this embedded product that sits within your existing stack as a way to do broad treasury management.

So bridge you know is working for example with SpaceX on remittances across uh SpaceX's global operations uh but you know this is a random example but you can imagine uh a company like Coca-Cola who is bottling plants all over the world needing to have capital put to work and so this is where the wallet stack becomes useful.

Um, broadly it breaks down largely as you've said it, which is to say it's uh access to crypto as an asset class.

It's stable coins and that's on two fronts issuing the own and you know for example stripe and bridge have uh launched open issuance where you can actually launch and own the economics of the stable coins that you're putting forth but broadly we're seeing a lot more people starting to do this um as well as using stable coins for things like uh remittances and payroll.

We you know see folks like deal or remote that are doing stable coinbased payroll. We see folks like Zeps, Remittly, Felix who are doing uh remittances using stable coins. And then the third is uh broadly trying to see can we open up tokenized deposits and other things to uh financial markets globally through uh crypto.

So this is where I think the the Apollo of the world are playing and want to become in a sense like you know lenders on chain for folks across the world who have not had access to to to private credit.

So if I'm if I'm a contractor for SpaceX at Quadrilen ATL or something and I don't have USD or I don't have a USD uh bank account, SpaceX HR effectively or financing might send me an email, hey sign up for this to claim your, you know, your payment, your payroll, and it's just a stable coin wallet.

They provision the wallet right then. Exactly. I mean, and then they have it and they can move it where and then they can interact in crypto, but then they'll also be able to move it outside. In the specific case of the the SpaceX bridge work, I think it's used for internal treasury operations.

But that's exactly the sort of thing that we're seeing coming. Exactly. Got it. That makes sense. That goes back to your question of, you know, how are people going to get wallets in the future, 2021, 2022, you have to be this proumer.

You have to be extraordinarily sort of high activation energy of I want this and I'm going to self- select into this.

Um, I think we're going to basically just start seeing myriad of ways in which this starts to bleed into your life as a participant in global financial markets and that's how you get into Do you think it's uh do you think there's how many fewer crypto companies are being started today than in than in 2021 2022?

Is it is it like uh I could imagine it's like 20% as many even though there's a bigger more than ever. I feel like but but but here's the thing. I mean, I feel like I feel like crypto crypto uh this should be the excite most exciting moment ever in crypto history, right?

All the institutions like it's not just like the Robin Hoods coming in and saying, you know, we're going to add support for Bitcoin. It's it's the biggest financial institutions in the world. Yep. And yet there's less it feels like less excitement from like look at the YC batches.

You would think you would think a YC batch would be like 50% crypto right now given the institutional opportunity and now regulatory clarity and all these things.

So, it's really great if you're if you're privy or bridge or or you're you know some sort of established crypto company because you're not getting that that it doesn't feel like you're getting the same influx of of new competitors even though the opportunity has never been more obvious or bigger.

I mean, I I you know, I think we had to eat [ __ ] for a few years to to get here, which which which I think speaks to it, but you're right.

I mean, from my standpoint, the EV of starting a company right now related to, you know, crypto or stable coins or or I wonder to what extent, by the way, just fintech and crypto are going to become one and the same and indistinguishable, but uh but the EV as compared to some of the competition I'm seeing in AI, for example, is absolutely wild.

So, I do think it's fewer than in 2021. Probably at least 50 to 70% fewer that I'm seeing. But the fun thing is I'm I'm here in LA for an event for partners of ours called LightSpark that have a Bitcoin L2.

And at the event uh they're presenting the work that they're doing with uh SoFi, there's folks from Apple, Meta, like everybody is actually paying attention to the opportunity and coming in. So, I think the next 18 to 24 months are going to be incredibly high leverage.

And I think we'll look back and we'll have the same conversation, call it in 2027 and say, you know, it was so quaint in, you know, late 2025 when we were talking about distribution starting off and so on.

How how long until the average bank account in America when you want to send a payment, you're getting a drop down like do you want to send a wire? Do you want to send a stable coin payment? It feels like that might be two years, three years away.

But how quickly are the institutions actually now that there's regulatory clarity, now that it's sort of fair game, how quickly can they actually adopt? I mean on on pace of adoption, the reality is extremely fast. The rails are actually a lot of the rails have been tested.

I think this is by the way where a lot of the crypto native usage for trading and for speculation has proved useful for the financial rails and that it's helped harden the financial rails and then you have things like uh tempo uh getting started for you know payment specific use cases to enable uh you know stripe level uh payments utility on blockchains.

Um so the TLDDR is I think it the rails are ready the places where work will have to be done is on the last leg of distribution uh for global payouts.

So, banking partnerships on the ground in various countries where you'll want to move back to fiat, but this is where, you know, I'm going to keep plugging away my my Stripe things, but obviously Stripe's doing a lot here.

Uh, this is where, for example, Bridge and Visa are working together and you see the card issuers uh moving into providing this. So, you could pay out in stable coins using a card directly rather than needing to move back to fiat via your banking partner on the ground.

So, yeah, I I think we're going to see a lot of pressure from neo banks pushing traditional institutions to pick this up. And I don't think your two-year timeline is crazy at all. I think it'll be one.

That's why that's why it's wild that there's so it it feels like there's massive reduction in new crypto uh company formation at a time when the entire mar like every key partnership will be like decided in the next like two to three years.

The the other interesting point this was like you know crypto cope circa 2022 but it was like you know crypto is the only net new technology AI serves the incumbents because you have data and distribution modes and I actually think stable coin changes that because stable coins uh play to the strength of existing networks distribution modes and so on and so forth and so I think the shape of crypto companies that will become valuable is also like not obvious which is a really good opportunity and interesting time to start something what uh What regions or countries specifically are most hostile to crypto adoption today?

I assume like North Korea, Russia, uh, uh, countries that already have, you know, intense capital controls, but yeah, I mean, there's probably a joke about North Korea somewhere in here in terms of crypto hostility. They certainly do a lot of crypto work, unfortunately, uh, in terms of cyber security.

But, um, did you I'm sure you got a bunch of applicants over the years. We're all in person, which helps tremendously. remote. It was always the remote North Korean engineers.

There was a there was a computer scientist from Caltech who went to North Korea, smuggled himself across the border from South Korea, gave a talk on Ethereum as like a way to kind of move money, not maybe above board.

And and he went to jail because Virgil, I forget his last name, but I know I know exactly what you mean. No.

So, so the honest answer is um the way you'll see it is there's a lot of adoption today in LA latam and parts of I mean obviously Europe and the US but the opportunity is quite different there because the stable coin opportunity where the pitch of you know just hold dollars is a little bit different if you look at tether tether keeps 100% of its yield which speaks to how valuable holding a dollar is if people are willing to make no money on top of their sitting balance so uh so is that why there's so many stable coins is this like like it feels like we we had like a few dominant winners.

It felt like it was going to be maybe a duopoly or like power law winners were going to happen.

And then I hear stories about like uh the state of Montana is going to launch their own coin and I'm like do like I I I kind of like the idea of just one standard, but I I don't know enough to really make that argument beyond just like it would be nicer if everyone used the same dollars.

I think we'll probably see two things which is one a broad like mesh of interconnectivity under the hood so that your coin for every single place you launch it.

So again you know bridge worked with phantom to launch cache they're working with meta mask you'll be able to interoperate between them without having to think uh but on the flip side which ones will have a brand y um is going to be a separate question. So in so far as like stable coins are products, they are programs.

They can be programmed. The way in which yield is managed, the uh way in which you put those underlying sort of collateral assets to work, all of that is configurable, which is why it makes sense that you'd have a proliferation like economic entities should be able to own how their balances are held and and managed.

Uh but the actual rails through which you you know plug all these together will make it seamless. Yeah. What's the what's the headline KPI that the stable coin industry is obsessed with?

I remember during the bitcoin era everyone was talking about like number of bitcoin wallets or number of people that have have have bought some bitcoin and there was like oh eventually everyone will hold a little bit and that's will drive the value.

Uh are you looking at like number of wallets, number of transactions per user, DAUs, MAUs?

At what point do you is it is it worth tracking how many bank accounts are created daily globally versus how many wallets because I imagine that will flip at some point but maybe that's not the right it may have already even flipped in so far as there's an issue of civil resistance which is it's you know costless and instantaneous to create a wallet and you can do so very easily.

So that's part of the value but obviously it means that you'll get a lot more noise in that in that data. Yeah. Um, I think today the obsessive sort of stable coin metrics are uh volume moved. So that we're moving I think about $5.

3 trillion of stable coins annually at this point as well as aumumumumumumumumumumumumumumumumumumumumum how much collateral is locked up in stable coins and last I checked I think we're at about 300 billion. Do you have a comp for that uh that transaction volume?

Because the bitcoin folks would always say like uh well gold is 10 trillion. You think about as digital gold like maybe it'll comp there.

Uh, but when I think about like the amount of money that's moved, you'll hear about like one highfrequency trading firm is moving five trillion because they're just like trading a billion dollars back and forth every second. Uh, like what is the actual pie?

Are we talking like quintilions of dollars a day floating around or something? Like is it so high that we're like very early or is five trillion actually like a meaningful chunk?

No, I think these are just the starting days and and to your point that the metric I'd love to invite by the way is open data by the folks like Visa, Mastercard, Stripe to actually show how much is going to end users through payments rather than potentially you know uh trading that's happening that has less of an impact on uh consumers but um you know in an agentic world where ostensibly most commerce will happen via automated means this is you know something stripe is very focused on but it stands to isn't that a like natively digital payment method will be the choice way through which agents actually get to purchase goods and pay each other.

So imagine now not just every bank account has a wallet but every agent has a wallet and that can be used you know on Jord's behalf to pay for something with you know some cap every day that you set for it. Um Thompson was talking about the MCP hopefully the future MCP standard has crypto in there stable coins. Exactly.

just as a payments method. And so I think we're just scratching the surface because the the denominator is not just global payments today. It is global payments in an agentic world where most money movement comes online. Yeah. And it feels like that's coming very very soon.

I mean Fiji Simo has telegraphed it with OpenAI and like there's a ton of startups that are working on this stuff. It makes a ton of sense. Is talent the primary constraint for you guys right now? Yes. Uh I'm I'm trying to come up with a pathier answer. The the sort the short answer is yes.

I think Stripe has been a major accelerant to our work. We're, you know, working with a lot of customers. Patrick and John just firing off like I'm going to fire off like 10 intros right now and it's like, you know, the most significant financial institutions in the world and it's like good luck.

Just sending sending you the blog post fast and being like we'd love to add you here. So, keep going. Uh, no, I mean this is as exciting a time to join. So, obviously we're hiring. I know bridges as well, Stripe is as well, but talent is absolutely the main for doing this.

A lot of it software engineering, a crossbow of sort of smart contracts to build up the actual sort of capabilities to build whole new currencies. So if you're an economics, how much of that is a new Yeah. How much of that is a new skill?

Like is it CS plus economics or CS plus a specific language that you've worked in a long time or just experience in uh smart contracts specifically? The honest take is we found the people who do best are like generally spiky and then specialize over time.

So you could argue like we want, you know, solidity devs which is the the smart contract language on Ethereum. But I actually think people who are just like very deep in what they do and excited about the space and to pick it up uh have an opportunity to come here and shape the space in real time.

So do you put engineers out with your customers? that is uh we are we are we were early to the I spent some time at Palanteer uh and so we were early to the FDE uh resurgence and and so basically that's exactly what we do.

We we mostly basically uh embed with our customers to build alongside them to get repeatable use cases and then those are product ties and that's most of what you see on on the preview website but that's a lot of how we do the work today. Cool. Well, thank you so much for coming by. This is fantastic.

Progress is absolutely wild. Congratulations. Thank you.