What Comes After Stablecoins? (ft. Circle CEO Jeremy Allaire and Chris Dixon)

Summary

Circle CEO Jeremy Allaire and a16z crypto’s Chris Dixon, interviewed by Robert Hackett, discuss why Circle built Arc, its new blockchain, and how stablecoins, blockchains, and AI could reshape economic activity.

Why Circle Built Arc

Allaire traces Circle’s original ambition to programmable money: public blockchain networks could act as computers for applications and support a digital-dollar protocol.

Circle first explored building on Bitcoin, then issued USDC on Ethereum. As congestion, fees, and performance limitations became more pressing, it pursued a multichain approach, working with networks including Solana and developing tools to move assets across chains.

Circle’s view shifted as institutions began considering blockchain for money and securities, while regulators increasingly expected infrastructure to meet financial-system standards. Circle says it saw a need for a network designed around those requirements.

Arc is presented as an open-source, public, permissionless network: anyone can connect, build, and deploy software. Its validators, however, are known organizations selected for operational, security, compliance, and legal commitments. Circle describes this as a middle ground between fully anonymous validation and tightly controlled systems.

The design aims to provide fast, deterministic settlement and governance suited to institutional use while bringing in infrastructure participants from different regions. Allaire says Arc began with roughly 10–11 participants and may eventually have about 40 validator slots, with existing validators voting on expansion.

Circle’s Products and Competitive Advantages

Allaire describes Circle’s business as having several reinforcing network effects:

• Stablecoins and tokenized assets: USDC is the central product, alongside a euro stablecoin and other digital-asset products, including tokenized Bitcoin and a tokenized Treasury or money-market product.
• Usage and liquidity: More applications supporting USDC make it more useful to developers, while deep liquidity helps users and markets move capital efficiently. Allaire says Circle mints and redeems about $150 billion per quarter and cites liquidity across primary channels and on-chain markets.
• Cross-chain connectivity: Circle’s Cross-Chain Transfer Protocol (CCTP) moves USDC between blockchain networks. Allaire calls it the most widely used interoperability protocol across networks and says it accounted for around half of cross-chain value at one point, rising as high as 70% in some recent quarters. Arc assets—not just USDC—are intended to benefit from CCTP’s distribution and connectivity.
• Institutional payments: Circle’s Circle Payment Network (CPN) is described as a financial-institution network using stablecoin and blockchain rails. Allaire says nearly 200 financial institutions have joined.

Allaire argues that Circle’s advantages include the combination of stablecoin adoption, liquidity, regulated infrastructure across markets, and interoperability—not just the underlying software. He also expects stablecoins to become a multinet­work market rather than one in which a single provider takes nearly all the share.

Adoption, Applications, and the “Next Big Thing”

The speakers compare crypto’s current stage to the long, uneven development of mobile technology. Early products and apps often failed to reach ordinary users; later, better devices, operating systems, interfaces, and incentives made mobile computing mainstream. They argue that blockchain applications may similarly be early, and that many future users may not even realize they are using crypto.

Dixon distinguishes between moving familiar activities—such as payments—onto new technology and creating genuinely new kinds of markets. Allaire suggests that programmable money, financial contracts, and AI could enable new forms of lending and credit, with more kinds of participants able to issue or access financial products.

They point to early experiments on Arc as examples of this open-ended development:

• “Fly Brain” reportedly turns information about a fly’s brain into bytecode running on Arc, with an AI-created interactive environment. Allaire says he does not yet know its purpose or economic incentives, but sees it as an example of unusual experimentation.
• Arc Studio is a “vibe coding” tool intended to help users deploy smart contracts within a safer environment, addressing the security risks of contract deployment. Allaire says it has been used for financial applications and economically structured games.
• A project for arbitration of AI work is described as combining AI or human arbitrators with security and staking mechanisms to resolve disputes and manage payments when AI agents, or people, hire AI to perform tasks.

Dixon’s idea that the “next big thing looks like a toy” is tied to exponential improvement, blockchain composability, and network effects: early experiments can look trivial or strange before the underlying technology and ecosystems mature.

AI and the Machine Economy

Both speakers expect AI agents to become major users of online economic infrastructure. Allaire argues that software can interact with deterministic APIs and blockchain systems, while AI-assisted development is making it faster to create and deploy new applications. Dixon sees blockchain’s open services, global access, and low fees as a possible counterbalance to AI’s tendency to concentrate power in companies with the most resources.

Allaire describes Arc as open and publicly usable, but not fully decentralized in the strictest sense because its validators are known and accountable. He argues that institutional and government adoption requires clear operational commitments and governance, while acknowledging that some crypto advocates prioritize anonymous, censorship-resistant validation.

Looking five years ahead, Allaire predicts that machines could perform much more creative and cognitive work, dramatically increasing the volume and speed of economic activity. Dixon similarly expects machines to make up a growing share of internet activity. Allaire recounts finding around 15,000 daily bot visits to an unpublished app he built, apparently from automated probes seeking secrets and vulnerabilities—an example of how extensive machine activity already is.

These forecasts are presented as expectations, not certainties; both speakers emphasize how difficult it is to predict the specific applications that will emerge.

Reviews, Guides, or Tutorials

No product review, step-by-step guide, or tutorial is presented. The conversation is primarily a discussion of Circle’s products and infrastructure, blockchain adoption, and possible AI-driven applications.

Main Speakers and Sources

• Jeremy Allaire — Circle co-founder and CEO; discusses USDC, CCTP, CPN, Arc’s design, and the potential machine economy.
• Chris Dixon — a16z crypto founder and managing partner; discusses blockchain platforms, network effects, AI, and decentralization.
• Robert Hackett — host and interviewer; introduces the discussion and poses questions.