JONAH CRANE: Well, welcome, everybody. My name is Jonah Crane. I head up regulatory and policy strategy here at Stripe. So my team helps Stripe mind our current regulatory obligations and try and see around corners, and anticipate and shape the future regulatory frameworks. We’re going to talk about stablecoins today, and I’m going to introduce our panelists in a moment, but this is Stripe. We love data, so let’s start with a chart. This chart shows total outstanding volume of stablecoins over time. Starting many, many years ago when stablecoins first came on the scene, you can see they grew rapidly through a few crypto bull market cycles and then fell off quite a bit in the crypto winter, 2022, 2023. Bottomed out about two-and-a-half years ago at $130 billion. And since then, you’ve seen really steady growth.

Two notable things about that period of growth: one, lots of regulatory activity. Countries like Singapore and Hong Kong, and notably the EU, and, last year, the US, adopted regulatory frameworks for stablecoins. And crypto sort of unmoored itself. Stablecoins sort of unmoored themselves from the broader crypto markets. There’s been a lot of crypto volatility, and yet stablecoins are still sort of up and to the right.

So, with the panelists, we’re going to talk about everything that’s to the right of this chart. What’s next? Where are stablecoins headed? What role is regulation and policy going to play? So to walk us through all that, please welcome our panelists. First up, Katie Biber, chief legal officer at Paradigm, an investor and active builder in this space. We’re also joined by Ondřej Kovařík, former member of the European Parliament and chief architect of Europe’s crypto regulatory framework, MiCA, and John Tullis, head of payments at Gusto.

All right. Ondřej, we’re going to dig in with you. You were, as I noted, chief architect of MiCA, which is a broad crypto regulatory framework for Europe, including a piece on stablecoins. We’re about two years into the life of MiCA. How would you grade performance so far? What grade would you give MiCA at this stage in the process? How is the development of the stablecoin market in Europe going, and what do you see foresee next?

ONDŘEJ KOVAŘÍK: Thank you, Jonah. Well, good question. I think MiCA, as a regulatory framework in general, we’d have a rather positive grade. I would go somewhere between A and B. But I think then if we stick specifically to the stablecoin part, I think we go more to the negative grades because if there is something to criticize on MiCA, at least from my side, but I’m not the only one from the decision makers, it’s actually how strict Mica is on stablecoins as it stands. And I think this is also maybe to remind everybody that when MiCA was designed, which is five years ago, there were discussions about proposition of Libra, or then later Diem, by Facebook and other companies. And MiCA was a reaction to that. So the stablecoins part is extremely heavy. It’s regulatory-heavy. It’s strict. And I think that one of the reasons why we see so far very low value of euro-denominated stablecoins on the market today.

JONAH CRANE: Yeah. They’re like a very small fraction of that chart we saw before, somewhere in the low single digit billions, I believe. We’re hearing rumors that Europe is going to reopen MiCA. We may get a MiCA 2.0 at some point soon. What areas do you think they should focus on if and when they reopen it?

ONDŘEJ KOVAŘÍK: Well, the rumors about MiCA 2 are actually circling around since I think Fall 2022, when it was not even in force. But I think this time it’s real. It will be happening. Obviously, even within current MiCA rules, there is a clause that requires a review of MiCA in a couple of years’ time. We’re expecting consultation to be launched so basically everybody can join and express their interest. From my point of view, what should be the key areas to focus in MiCA review would be precisely the parts regarding stablecoins. So they are called, in MiCA language, “electronic money tokens” and are since referred to as “tokens.” This really needs to have some redesign. Then, we are in the US right now, I mean, we have to do more about the international equivalence regime. MiCA is a regulatory framework that is extremely closed. It only refers to Europe. It doesn’t really look into other jurisdictions’ regimes.

And I think this is somehow not matching the global character of stablecoins. And I think the next issue to be tackled in the review should be also how the crypto asset service providers are treated by regulators.

JONAH CRANE: Very good. Well, Katie, let’s turn to you and turn our gaze homeward to the US. The US adopted the GENIUS Act last year. We’re in the midst of a bunch of rulemaking on that. We are also simultaneously in the midst of negotiations on Capitol Hill for a broader crypto market structure bill that includes some important provisions on stablecoins. What are the most important sort of decisions yet to be made in either implementing GENIUS or in adopting CLARITY, and how do you think those will impact adoption in the market?

KATIE BIBER: That is a big question. There are a couple of pending issues that will help determine whether the US is home to stablecoin startups and new entrants that can really provide consumer choice or whether stablecoins will remain the province of the incumbents and the entrenched industries. Those issues are: yield, which I’ll get back to in just a minute; white labeling, which I know you and I have been in the throes of working on with the OCC; and reporting. So let’s rewind back to last year when the GENIUS Act was signed into law. As we all probably remember, what it did was prohibit issuers from paying yield to stablecoin holders solely for holding that stablecoin. Now that was a very carefully drawn restriction that was written, frankly, against the backdrop of exchanges like Coinbase paying rewards to stablecoin holders. One of the main questions we’re facing right now, as you know, Jonah, is whether Congress is going to permit the bank lobby to strip mine the crypto market structure bill and eliminate the ability to pay yield for the most part.

Thankfully, this is actually trending in the right way. Members of Congress have really stuck up for the industry and pushed back at the bank lobby, but that remains a tiny bit of an open question. In addition to that, the OCC is exploring a couple of options that we do not think contribute well to consumer choice. The first is to expand the prohibition on yield payment to third parties, which is not in the bill and is sort of made up out of whole cloth. And the second is to create an odd burden-shifting structure that would assume affiliated entities are paying yield on behalf of an issuer. These may sound like small technicalities, but in reality, what they do is bestow a lot of discretion in the hands of regulators, which in the hands of a hostile administration—remember when we had one of those—might be deployed negatively to hurt the industry.

Beyond that, there are a couple of other things that we’re watching, which relate very importantly to whether incumbents are going to own this industry or there’s plenty of room for new entrants, crypto-native firms, fintechs, things like that. The first is the concept of white labeling. As I think any founder knows, fully compliant stablecoin companies do not drop from the sky. They need sometimes training wheels at the beginning. They need to work with an issuing partner. They need some help to get compliant and go on their way. If we disallow white labeling, it’ll actually be quite hard for new founders to enter and offer products that consumers actually want to use. So that’s something that we’re hoping the OCC decides correctly. And then secondly, how we choose to require stablecoin issuers to report on their reserves is pretty important. Big companies like Circle can absorb just about any compliance obligations, but we want to make sure that the reporting requirements actually work for smaller companies.

Clearly, we want to make sure that consumers are protected and the whole system is safe and sound, but we can do that through a smaller sort of reporting structure than the OCC is currently contemplating. At the end of the day, we and a lot of others, Stripe included, have been engaging in good faith with the OCC. The folks who work there are really smart, so we have confidence that this is going to end in the right place, and we’re super bullish on what’s possible this year and next in the US.

JONAH CRANE: Good. I’m glad to hear you’re bullish. John, let’s turn to you real quick. You also seem to be bullish. You have referred to stablecoins, I think, as representing a generational shift in money. And Gusto is a global payments company. You’ve been sort of a traditional payments company for a long time, and now you’re incorporating stablecoin. So I think you have a unique perspective to offer. Maybe you can start by just telling us a little bit about Gusto and what you’re doing with stablecoins.

JOHN TULLIS: Sure, absolutely. Gusto is a provider of payroll, human resources and benefit software to about 500,000+ small businesses, mainly in the United States. As it relates to stablecoins, really where we’ve started our journey is in paying contractors globally in 100+ countries on our platform. Really, the insights that we have at Gusto are always rooted in our customers and where they want us to take things. And the core insight really that we saw was that our customers wanted to be paid in USD equivalents, in a method that was fast, in a method that was transparent and that allowed them to keep more of their paycheck. And stablecoin’s really fulfilled all three of those promises and are a place where we’ve definitely had some interesting early traction.

JONAH CRANE: Yeah. You talked about the number of countries, and that feels like a natural… It’s been a natural fit for stablecoins from a use case perspective for a while. But you also mentioned sort of getting paid in dollars. And I’m curious, based on conversation we just had about Europe and where Europe is headed, and sort of the nascent state there, do you see within the Gusto customer base demand for other currencies potentially emerging, or is it too early to tell?

JOHN TULLIS: Sure. I think early interest and some of our early insights were around the US dollar, particularly in markets where the local currency maybe had a good deal of volatility or where there was some degree of distrust. But I think that as the market develops more globally, and as liquidity develops and additional currencies, there’s the potential to pay out in other sorts of digital methods, where the other parts of that benefit, the speed, the cost, the transparency, really provide what’s needed for the customer.

JONAH CRANE: Yeah. And how does a company like Gusto think about, well, how do the evolving regulatory frameworks around stablecoins influence the decision-making at a company like Gusto? I mean, anecdotally, at Stripe, when GENIUS passed, there was just really a flood of inbound interest and demand, which was sort of funny for me to see. I mean, with my lawyer hat on, it was like, well, stablecoins weren’t illegal before. Yes, we have a regulatory framework, but you could do this, but very clearly there was a signal derived from the passage of GENIUS that we’re entering a new era, and we just had a ton of inbound. I’m curious how Gusto thinks about regulation in terms of your willingness to engage.

JOHN TULLIS: Sure, absolutely. Increasing levels of certainty really have given us confidence in making investment in the area and have really been a stimulant that allowed us to do more in this area and that will continue to allow us to do more. I think as the proposed rulemakings come together, and as we get more clarity on what exactly that’s going to mean to us, particularly in the payroll space, I think it is hopefully going to allow us to do even more in this space and develop interesting propositions that are beneficial to our small businesses who are cashflow-constrained and to employees who want to get paid quickly in a digital method.

JONAH CRANE: Katie, I’m curious if what you’re seeing, hearing across your portfolio companies and the projects you guys are involved in, how are you thinking about the regulatory landscape? What areas feel like still sort of a danger zone? Where do you see potential landmines, or where do you see the opportunities maybe?

KATIE BIBER: Yeah, great question. I mean, I think an important thing to start with is to say that stablecoins weren’t illegal before the GENIUS Act. I think what the GENIUS Act did was give confidence to more institutional players that the water was warm, and they could safely get in without their regulator having something to say about it. And something like 70% increase in stablecoin activity, I think it was after the GENIUS Act was signed into law. So all of those signals are positive. And I don’t want to sound like a broken record, but what’s going to help determine whether the US lets a thousand stablecoins bloom, at least until a few of them go out of business, depends on what the OCC does over the next few months. Are they going to allow white labeling by issuers? Are they going to create a reporting structure that is onerous or that permits new entrants? And are they going to follow Congress’s intent when it comes to the GENIUS Act?

One thing I do want to caution founders on though is always to think about what is it that I want to bring to the world? What products do consumers want? What is it that people want to use? A founder who finds a clever regulatory loophole or exploits a piece of legislation to build a product, in my view, is never going to be the most successful founder. The first question to start with is, what does the world need, and how can I bring it to the world? And then you worry about how to fit it within the regulatory framework as opposed to the other way around.

JONAH CRANE: And smart people like you are there to help guide them through the process. Ondřej, you mentioned in your remarks earlier, sort of a need to focus going forward on how the European framework fits in globally, equivalence regimes, et cetera. And it does feel like that’s something that Europe is going to have to figure out. The US is going to have to figure out. Stablecoins are global by default, and yet regulation is domestic by default. And I think there’s a real question as to sort of how much friction, as the regulatory frameworks get put in place, how much friction will that create for the marketplace? So maybe you could say a little bit more about how Europe might think about equivalency.

ONDŘEJ KOVAŘÍK: Actually—it’s a good question—just to showcase the frictions, currently we have a debate in Europe on the so-called multi-issuance issue, which is basically treating those stablecoins that are issued in third country jurisdiction like USDC, pegged to the dollar, and have an equivalent in Europe that is traded on European market under MiCA rules. How difficult is it actually for those issuers to meet rules on both sides of the Atlantic at the same time, which basically requires day-to-day rebalancing of reserves, et cetera, et cetera. So yes, there are frictions, and I think to tap fully in the potential also that John mentioned of use of stablecoins on a global scale, we somehow need to address these frictions. European Union, in its own law, we know the possibility to establish the equivalence or adequacy regimes. So basically assessing how the European and the third country regimes are alike or not. And then, on top of that, being able to acknowledge and recognize the token in this regard, for instance, stablecoin that will be authorized under GENIUS Act, to be traded on the same set of rules in Europe.

As MiCA stands today, or the European stablecoin rules stand today, there is no such a mandate to anyone. So it cannot be, even if there is a will, there is not possibility to do it. So I think what would require, and there’s already discussions on stablecoins that are held on global international fora such as G20, the OECD, Financial Stability Board. So there are actually global discussions taking place. I think it’s really good to follow up on these discussions and come up with concrete solutions on how these equivalents can be established, which then obviously would need to be adopted on both sides into the domestic systems, but I think I don’t see actually any other way to proceed. And at the same time, I see and feel the urgency coming also from the industry to do it as soon as possible because otherwise I don’t think we will, as you mentioned, we would not end up in a situation when something will be completely illegal, but it may be unregulated. And this is also a sort of problematic, especially when there is a broader acceptance of stablecoins by companies, by businesses, by also institutional stakeholders.

JONAH CRANE: Yeah. Yeah. And you mentioned the importance of reciprocity there. It seems unlikely that Europe, say, would recognize another country’s regime without at least some confidence that that would be reciprocated.

ONDŘEJ KOVAŘÍK: Indeed, the reciprocity here is extremely important, but obviously, I mean, there’s a lot of discussions between EU and other jurisdictions on different type of agreements, trade agreements, investment agreements. I think the equivalence or adequacy agreements can be also taken on board throughout these discussions. And I think, as I said, there is already an urgency. So there is actually an interest also from the regulator side to cover this because otherwise, what is at risk that it doesn’t mean that the global payments will stop because there is lack of regulation. The global payments will find a way. The trend is inevitable. So I think the question is, are we creative and nimble enough actually on the regulatory side to address what is already happening in real economy?

JONAH CRANE: Yeah. John, Katie, happy for either of you to address this, or both: how do you think about the sort of reciprocity or equivalence regimes when you think about global markets? When is a market open to you, from your perspective? I know you’re paying out into many countries already. How do you think about expansion from that perspective? When is it sort of safe to move? And how are the companies you guys are working with thinking about that?

KATIE BIBER: Yeah. I mean, I think there are three or four things that we would look to to determine whether or not a market is really open for business. The first is a clear and concrete rule that doesn’t just bestow total discretion in the hands of the regulators. The second is probably at least one company that’s been successfully operating under that regime for some time as a proof point to show that the regulators are going to allow them to do business. The next two are probably a little bit in the weeds. I think the first is a law that actually allows both retail and institutions to trade stablecoins, which is not part of every draft that we’ve seen globally. And the last is what we’ve been discussing already, passporting. It has to be the case that local consumers can access stablecoins that are denominated in currency other than their own, or the system doesn’t work very well.

JONAH CRANE: Yeah. John, any thoughts?

JOHN TULLIS: I’m definitely excited about and optimistic about any sort of standards that create trust and uniformity of expectations for end consumers and that allow the payment system in general to be able to scale. I think those are critical ingredients in the success of any sort of payment system. So definitely excited about the possibility.

JONAH CRANE: Good. Ondřej, I’m going to come back to you, and I want to talk about, I guess what’s kind of a controversial topic, but sort of CBDC in Europe, which has been advanced as sort of the preferred method of tokenizing money by at least the European Central Bank. Where do you think the balance of that debate is among the very many stakeholders who care there on sort of CBDC versus stablecoins versus tokenized deposits, or coexistence? How do you see that playing out?

ONDŘEJ KOVAŘÍK: Well, there has definitely been a very interesting development on it back in Europe because, first of all, the European Central Bank was among the most vocal stakeholder institutional one, but also having a huge impact on policy, declaring that stablecoins, there’s actually no room for stablecoins in Europe. It was as blunt as that. And it was also, one of the motivations was that the ECB has been working on the project of digital euros, the digital central bank currency, since four or five years already now. So the idea of ECB, the thought was that first we need to launch the CBDC, and then we can actually allow for more digital and programmable money in the European market. But obviously the market developments were much faster than the ECB people. Not surprising, but that, this is what happened. So now, since the past year, ECB is actually officially saying that stablecoin… There is a room for stablecoins in European economy, but again, the digital currency should be launched first.

KATIE BIBER: So interesting, because they… Sorry, go on.

ONDŘEJ KOVAŘÍK: Yeah. So there’s definitely this distinction between what’s happening in the US and what’s happening in Europe. There will be an effective launch of digital euro in a wholesale area this fall, so it will happen in any case. And I think just to follow up on your question, to me, it seems at least in European context, as a sort of inevitable part of farther digitalization of tokenization of money. If you look at the two-tier monetary system, as we knew it for centuries, where on one hand we have central bank money, and then we have commercial bank money, circulating together. I think we are, if not in this decade, but definitely in ’30s, we would see live basically a monetary two-tier system and tokenized version, where we on one hand will have a digital central bank money—digital euro in European case—and then I think most likely tokenized deposits as an equivalence of commercial bank money in circulation.

And I think this is where we’re heading. We still have a lot of political debates about how the CBDC should be designed, and I think it will have a final impact on the entire ecosystem in Europe. But I sometimes totally disagree with the ECB, what they were proposing, but I think they right, or they may be right, on one thing: that the tokenized central bank money can actually help in Europe to build use cases for euro-denominated stablecoins. And this is also what is missing. Not only the regulation in Europe is very heavy on stablecoins, but we so far miss use cases like, for instance, John is describing in their case. So I think the CBDC can actually help build this, also, with a trust that, believe or do not, the ECB still has a lot of trust in the system. And I think this can be one of the anchors, but, yeah, we need to see how the CBDC debate develop, and how it actually works in practice once it’s launched, later is here. But I believe as I’m optimist by nature, I really believe that this can actually help and then accelerate the stablecoin market in Europe with the right redesign of MiCA rules with it.

JONAH CRANE: Yeah. The European policymakers seem somewhat schizophrenic on the topic. They want to push CBDC on the one hand, but they’re worried about harming the banking system, and so they want to make it really unattractive on the other. And so, you get policy muddle at some level. Katie, you were going to interject, I think with a point about the US.

KATIE BIBER: Yeah. I’m just hearing this. I marvel at how different the politics can be on this issue. CBDCs are so unpopular in DC right now that Congress is literally trying to ban them, even though there’s no danger of anyone proposing one. So you’ve got a growing number of members who consider it to be a major privacy issue and compare the US to the CCP for even thinking about something like a CBDC. I think it will be a long time before someone has the courage to even propose one here. And I would imagine that it would fail pretty colossally in Congress.

ONDŘEJ KOVAŘÍK: But I was just describing the institutional debate. I was not saying that the digital euro is popular in, back in Europe, but the debate is extremely diversified, and there are opposite camps, but this is how the institutions approach the issue.

JONAH CRANE: Yeah. All right. We’ve got a handful of minutes left. Maybe we’ll start with you, John, and go down the line. What advice do you have for founders and builders in the audience who are either working with stablecoins actively, stablecoin curious? How would you recommend they approach the topic?

JOHN TULLIS: Sure. Yeah. I would echo, I think one of Katie’s earlier points on focusing on the need that you’re trying to solve out there in the marketplace and doing that in a way, expanding into this particular discussion, doing it in a way that you’re creating an ecosystem and creating the world that you want to be part of in the future, and that you’re partnering with others in the space who are pursuing that same sort of end goal. We’ve definitely found a lot of value in partnering with others, or others who are deeper in the stablecoin space than we are and are every day, to help to advocate for some of the policy that we want to see in the end, out in the market.

JONAH CRANE: Ondřej, any advice?

ONDŘEJ KOVAŘÍK: Well, to be honest, I mean, I passed these two days just listening how agentic commerce, agentic payments, agentic world will be driven by stablecoin. So I don’t think the question is like, what to do with stablecoins. It’s there and it’s actually, there’s a lot of use of it for it. So I think maybe the advice to the business is just be persistent. I mean, if you see there’s a well argumented use case for it, just keep using it. And I think the regulatory framework will somehow have to match and fit to the reality. But I think that one of the key questions that I think we touched upon today is how we treat this issue globally. And I think this should be something that once we sort of have solutions on the domestic front, let’s also come together and speak what we can do about finding a sort of frictionless solution on global level.

KATIE BIBER: Great comments. I would add only that the water’s warm. Come on in. EY released a study earlier this year, which showed that something like half of firms that are not yet using stablecoins are considering using them, which is a staggering statistic. Many of you are probably aware of Tempo, the payments blockchain that was coincubated by Stripe and Paradigm. There are a number of really interesting case studies on Tempo’s website, and you can see how real businesses are using stablecoins to thrive. Just one example, it’s as a result of its Tempo integration that DoorDash can now pay Dashers immediately. No waiting over the weekend, no financing schemes, no couple of days wait. You drop the delivery on Mrs. Smith’s doorstep and you can immediately get paid. That’s a meaningful difference for DoorDash’s business and a meaningful difference, frankly, to the lives of its Dashers. All sorts of cool things can be done with stablecoins. And if you wait until the ink is dry on the very last regulation two years from now, you will be meaningfully late to the game. So the time is now.

JONAH CRANE: All right. Katie, instilling some FOMO in the crowd. Excellent. I think the point about really seeing real world adoption and real use cases is a critical one. And we flash the chart at the beginning of total stablecoin volume outstanding. In some ways, a more interesting number is just the actual amount of transactions being done in stablecoins. And I think that in 2025, which feels like a long time ago now, but the sort of best estimates around sort of real world stablecoin transactions are that they hit about $400 billion, which is small in the grand scheme of payments, but I think a very sizable increase. So we’re starting to see lots of that real world adoption take place, thanks in part to many of those projects and initiatives like Gusto’s.

Well, we are just about out of time, but there are no fewer than eight or 10 countries thinking about rethinking, reworking, reproposing stablecoin frameworks this year. So the regulatory picture will continue to evolve. We will get more and more clarity as we go on. Stripe will be engaging on every single one of those on behalf of our users. So yes, if you’re stablecoin and crypto native or just stablecoin cure curious and want to keep up the conversation, feel free to get in touch and join me in thanking our panelists for a great discussion.