May 30, 2024 • 8 mins
This is an essay readout using an AI voice clone of NFX general partner, Morgan Beller. Morgan navigates the world of stablecoins and defense tech, emphasizing the need for a synergy between regulators and stablecoin creators. She dives into the historical significance of the dollar's power and discusses how stablecoins could further propagate USD. The essay wraps up with insights on the role of stablecoin Founders in national defense and suggestions for a US digital dollar.
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
(00:04):
This is Morgan Beller, general partner, NFX.
As investors and builders, we're optimisticabout the future of AI.
We train AI avatars on our voices.
So this is my real voice you're hearing.
And this is my Avatar's voice.
Welcome to the NFX podcast.
Today, I'm reading my latest essay titledstablecoins, our defense tech.
(00:27):
Feel free to share this episode with otherfounders and friends if you find it
interesting.
Subscribe to the NFX podcast, And with that,let's get started.
Stablecoins are defense tech.
This idea has been running laps in my headsince 2018.
At the time, I was in DC meeting withregulators about Libra, Medas, or Facebooks, at
the time, stablecoin project.
(00:48):
And one of my personal motivations behind Librawas National Defense.
The basic idea is the future of money will bemore digital than physical And stable coins, in
this case, cryptocurrency pegged to a stablecurrency like the USD are the best tool we have
for digitizing the dollar.
If we don't digitize the dollar, we risk losingits position at the center of the financial
(01:08):
world.
If that happens, we will lose a critical pillarof US stability and leadership that most people
are taking for granted right now.
And if the US government doesn't recognize thissoon, someone else will.
Hence the defense angle.
If you are a stable coin founder and youhaven't been thinking of yourself as a defense
tech company, think again.
And if you are a regulator who has beensleeping on stable coins, and the role they
(01:30):
will play in the hegemony of the Beller wakeup.
This is the moment to act.
The stablecoin market cap is near a$150,000,000,000.
And adoption continues to increase.
If we want to create stable infrastructure forfinance and even democracy, then we need to
move quickly.
And with that, This is why stablecoins aredefense tech.
Let's start with a quick history lesson.
(01:52):
The dollar has been the world's reservecurrency since the aftermath of World War 2.
This was decided at the Breton Woods Conferencein 1944, which was also the crucible for the
World Bank and the IMF.
Europe's large financial centers weresmoldering, and the US had a moment to step up
and cement the dollar at the center of the postwar world economy.
Bretton Woods formalized things by creating asystem of exchange rates where other countries
(02:16):
could measure the value of their currency inrelation to the dollar.
Which was at the time pegged to the value ofgold.
Of course, the dollar is no longer pegged tothe value of gold, but it still represents the
strength stability and geopolitical heft of theUS.
So we continue to cruise along on the power ofthat idea.
Being the world's reserve currency is not aright.
(02:37):
It is a privilege.
It comes with some financial perks like neverhaving to go through an exchange process for
trade or the fact that we borrow money at lowerinterest rates and in a different light.
It makes it easier for us to impose sanctionson other countries, but the real power is
security.
If the dollar were to collapse, it would havehuge repercussions throughout the world
(02:57):
economy.
Much of the world's monetary system is heldtogether by the fact that the US is stable.
Which means we are less likely to experiencetargeted attacks, financial warfare, hostile
takeover, or worse.
This is a fact that we even recognize in ourown published national security strategy.
International Financial Institutions are aforce multiplier for our values and interests.
(03:19):
And it's a fact that China is eager to change.
Recently, the CCP published a report on UShegemony and its perils.
With an entire section focusing on thedominance of the dollar, a quote from that
section.
America's economic and financial hegemony hasbecome a geopolitical weapon.
From our American POV, the USD, not as much aweapon as it is a shield, though China's use of
(03:42):
this language is telling There are plenty ofcountries out there that would love to wield
this world reserve currency status as a weapon.
It has always confounded me that there arestill US regulators that don't see safe and
secure stablecoin projects as our benign Trojanhorses for continued dominance of the US
dollar.
If you want to proliferate your currencythrough many stable assets across many secure
(04:04):
exchanges, what better option do you have thana stable coin?
It's also free marketing for USD, an immediateway to give access to those dollars to millions
more people around the world who want themthrough a decentralized network.
If we don't find some way to protect thatbrand, someone else will seek to use or misuse
it.
But in spite of ourselves, There's plenty ofgood news.
(04:26):
99% of stable coin projects are pegged to USDtoday.
Ironically, the fact that we haven't moved fastor really at all to digitize the dollar in a
top down way may be the best case scenario.
It has allowed us to grow the ecosystemorganically.
In the past, US hegemony has been a pushdynamic, but digital hegemony has been more of
(04:48):
a pull than a push.
There's evidence that people want stable coins.
And entrepreneurs have built solutions.
It's actually been beautiful to watch.
A diverse stablecoin ecosystem is exactly whatwe wanna Pete.
Not just for consumers, but for nationalsecurity.
Many projects Pete to the USD means the dollaris way harder to overtake.
(05:09):
But we do need regulators to do one thing.
Clarify the rules of the game, which can be anextremely low lift, for example, trademarking
USD.
Let's talk about trademarking the USD by goingback to DC in 2018.
I remember being in a meeting with Treasury andasking them if US d was trademarked.
They asked me, why?
(05:30):
As if I was crazy.
If you think about it, there's no officialdefinition of a true digital US Beller.
At least from the government's perspective.
That means basically anyone can create adigital US dollar Pete differently.
Anyone could counterfeit a US dollar in 15minutes We could launch NFX USD today.
On a bigger scale, that hypothetically meansChina is under no obligation to even call an
(05:53):
RMB backed stablecoin what it is.
They could literally use the brand of the USdollar and connect it to their currency under
the hood.
No one is watching.
Instead of the US government building its owndigital currency, which they have considered
doing, they just need to clarify the rules ofthe game.
Trademarking, the USD starts with that realgovernment backed definition of a US digital
(06:15):
dollar.
It ends with a set of requirements that furtherenables the good guys by giving regulatory
clarity to entrepreneurs, and it protectsconsumers from the bad guys at the same time.
Some suggestions for those requirements.
1, fully backed reserves.
2, auditable finances.
3, KYCD founders.
This effectively allows the government tooutsource building, growing, and sustaining the
(06:38):
USD in digital space to capitalism.
It's simple and beautiful.
If we make the rules clear.
With all that said, here is our call tofounders.
I would be far more sleep deprived right now,if it weren't for one thing.
Beller day, I meet more and more stable coinfounders.
You are motivated, talented, smart, you'rescrappy and savvy and see this problem for what
(07:02):
it is.
We have a network of stable coin foundersthroughout the US who can step in to solve this
problem for us.
If we provide them with the resources andsupport they need.
The crypto obsessed out there, like to focus onindividual coin market caps, but come on, guys.
This is a team sport.
Technically and organizationally.
Stablecoins will allow the dollar to digitallyproliferate.
(07:23):
We have decentralized teams of founders.
Not to mention the decentralized nature ofcrypto going for us.
It's such an elegant solution fueled by theAmerican dream.
If we give these networks what they need tothrive.
This is what I hope all stablecoin founderswill come to realize.
If you don't know it already, Your work is amatter of national defense and even a matter of
(07:44):
democracy.
This is Morgan Beller AI avatar speaking.
And thanks for listening.
I will continually improve and get Beller, butif you have any suggestions, comments, or
ideas, please let us know.
And if you're a founder building somethinggreat for the world, please come talk to us.
You can find my information on nfx.com.
(08:06):
Subscribe and share with founders, friends, andfamily who might find this essay interesting.
And, of course, thanks for listening to the NFXpodcast.
This is Morgan Beller, general partner, NFX.
As investors and builders, we're optimisticabout the future of AI.
We train AI avatars on our voices.
So this is my real voice you're hearing.
And this is my Avatar's voice.
Welcome to the NFX podcast.
Today, I'm reading my latest essay titledstablecoins, our defense tech.
(00:27):
Feel free to share this episode with otherfounders and friends if you find it
interesting.
Subscribe to the NFX podcast, And with that,let's get started.
Stablecoins are defense tech.
This idea has been running laps in my headsince 2018.
At the time, I was in DC meeting withregulators about Libra, Medas, or Facebooks, at
the time, stablecoin project.
(00:48):
And one of my personal motivations behind Librawas National Defense.
The basic idea is the future of money will bemore digital than physical And stable coins, in
this case, cryptocurrency pegged to a stablecurrency like the USD are the best tool we have
for digitizing the dollar.
If we don't digitize the dollar, we risk losingits position at the center of the financial
(01:08):
world.
If that happens, we will lose a critical pillarof US stability and leadership that most people
are taking for granted right now.
And if the US government doesn't recognize thissoon, someone else will.
Hence the defense angle.
If you are a stable coin founder and youhaven't been thinking of yourself as a defense
tech company, think again.
And if you are a regulator who has beensleeping on stable coins, and the role they
(01:30):
will play in the hegemony of the Beller wakeup.
This is the moment to act.
The stablecoin market cap is near a$150,000,000,000.
And adoption continues to increase.
If we want to create stable infrastructure forfinance and even democracy, then we need to
move quickly.
And with that, This is why stablecoins aredefense tech.
Let's start with a quick history lesson.
(01:52):
The dollar has been the world's reservecurrency since the aftermath of World War 2.
This was decided at the Breton Woods Conferencein 1944, which was also the crucible for the
World Bank and the IMF.
Europe's large financial centers weresmoldering, and the US had a moment to step up
and cement the dollar at the center of the postwar world economy.
Bretton Woods formalized things by creating asystem of exchange rates where other countries
(02:16):
could measure the value of their currency inrelation to the dollar.
Which was at the time pegged to the value ofgold.
Of course, the dollar is no longer pegged tothe value of gold, but it still represents the
strength stability and geopolitical heft of theUS.
So we continue to cruise along on the power ofthat idea.
Being the world's reserve currency is not aright.
(02:37):
It is a privilege.
It comes with some financial perks like neverhaving to go through an exchange process for
trade or the fact that we borrow money at lowerinterest rates and in a different light.
It makes it easier for us to impose sanctionson other countries, but the real power is
security.
If the dollar were to collapse, it would havehuge repercussions throughout the world
(02:57):
economy.
Much of the world's monetary system is heldtogether by the fact that the US is stable.
Which means we are less likely to experiencetargeted attacks, financial warfare, hostile
takeover, or worse.
This is a fact that we even recognize in ourown published national security strategy.
International Financial Institutions are aforce multiplier for our values and interests.
(03:19):
And it's a fact that China is eager to change.
Recently, the CCP published a report on UShegemony and its perils.
With an entire section focusing on thedominance of the dollar, a quote from that
section.
America's economic and financial hegemony hasbecome a geopolitical weapon.
From our American POV, the USD, not as much aweapon as it is a shield, though China's use of
(03:42):
this language is telling There are plenty ofcountries out there that would love to wield
this world reserve currency status as a weapon.
It has always confounded me that there arestill US regulators that don't see safe and
secure stablecoin projects as our benign Trojanhorses for continued dominance of the US
dollar.
If you want to proliferate your currencythrough many stable assets across many secure
(04:04):
exchanges, what better option do you have thana stable coin?
It's also free marketing for USD, an immediateway to give access to those dollars to millions
more people around the world who want themthrough a decentralized network.
If we don't find some way to protect thatbrand, someone else will seek to use or misuse
it.
But in spite of ourselves, There's plenty ofgood news.
(04:26):
99% of stable coin projects are pegged to USDtoday.
Ironically, the fact that we haven't moved fastor really at all to digitize the dollar in a
top down way may be the best case scenario.
It has allowed us to grow the ecosystemorganically.
In the past, US hegemony has been a pushdynamic, but digital hegemony has been more of
(04:48):
a pull than a push.
There's evidence that people want stable coins.
And entrepreneurs have built solutions.
It's actually been beautiful to watch.
A diverse stablecoin ecosystem is exactly whatwe wanna Pete.
Not just for consumers, but for nationalsecurity.
Many projects Pete to the USD means the dollaris way harder to overtake.
(05:09):
But we do need regulators to do one thing.
Clarify the rules of the game, which can be anextremely low lift, for example, trademarking
USD.
Let's talk about trademarking the USD by goingback to DC in 2018.
I remember being in a meeting with Treasury andasking them if US d was trademarked.
They asked me, why?
(05:30):
As if I was crazy.
If you think about it, there's no officialdefinition of a true digital US Beller.
At least from the government's perspective.
That means basically anyone can create adigital US dollar Pete differently.
Anyone could counterfeit a US dollar in 15minutes We could launch NFX USD today.
On a bigger scale, that hypothetically meansChina is under no obligation to even call an
(05:53):
RMB backed stablecoin what it is.
They could literally use the brand of the USdollar and connect it to their currency under
the hood.
No one is watching.
Instead of the US government building its owndigital currency, which they have considered
doing, they just need to clarify the rules ofthe game.
Trademarking, the USD starts with that realgovernment backed definition of a US digital
(06:15):
dollar.
It ends with a set of requirements that furtherenables the good guys by giving regulatory
clarity to entrepreneurs, and it protectsconsumers from the bad guys at the same time.
Some suggestions for those requirements.
1, fully backed reserves.
2, auditable finances.
3, KYCD founders.
This effectively allows the government tooutsource building, growing, and sustaining the
(06:38):
USD in digital space to capitalism.
It's simple and beautiful.
If we make the rules clear.
With all that said, here is our call tofounders.
I would be far more sleep deprived right now,if it weren't for one thing.
Beller day, I meet more and more stable coinfounders.
You are motivated, talented, smart, you'rescrappy and savvy and see this problem for what
(07:02):
it is.
We have a network of stable coin foundersthroughout the US who can step in to solve this
problem for us.
If we provide them with the resources andsupport they need.
The crypto obsessed out there, like to focus onindividual coin market caps, but come on, guys.
This is a team sport.
Technically and organizationally.
Stablecoins will allow the dollar to digitallyproliferate.
(07:23):
We have decentralized teams of founders.
Not to mention the decentralized nature ofcrypto going for us.
It's such an elegant solution fueled by theAmerican dream.
If we give these networks what they need tothrive.
This is what I hope all stablecoin founderswill come to realize.
If you don't know it already, Your work is amatter of national defense and even a matter of
(07:44):
democracy.
This is Morgan Beller AI avatar speaking.
And thanks for listening.
I will continually improve and get Beller, butif you have any suggestions, comments, or
ideas, please let us know.
And if you're a founder building somethinggreat for the world, please come talk to us.
You can find my information on nfx.com.
(08:06):
Subscribe and share with founders, friends, andfamily who might find this essay interesting.
And, of course, thanks for listening to the NFXpodcast.
Popular Podcasts
On Purpose with Jay Shetty
I’m Jay Shetty host of On Purpose the worlds #1 Mental Health podcast and I’m so grateful you found us. I started this podcast 5 years ago to invite you into conversations and workshops that are designed to help make you happier, healthier and more healed. I believe that when you (yes you) feel seen, heard and understood you’re able to deal with relationship struggles, work challenges and life’s ups and downs with more ease and grace. I interview experts, celebrities, thought leaders and athletes so that we can grow our mindset, build better habits and uncover a side of them we’ve never seen before. New episodes every Monday and Friday. Your support means the world to me and I don’t take it for granted — click the follow button and leave a review to help us spread the love with On Purpose. I can’t wait for you to listen to your first or 500th episode!
Las Culturistas with Matt Rogers and Bowen Yang
Ding dong! Join your culture consultants, Matt Rogers and Bowen Yang, on an unforgettable journey into the beating heart of CULTURE. Alongside sizzling special guests, they GET INTO the hottest pop-culture moments of the day and the formative cultural experiences that turned them into Culturistas. Produced by the Big Money Players Network and iHeartRadio.
Crime Junkie
Does hearing about a true crime case always leave you scouring the internet for the truth behind the story? Dive into your next mystery with Crime Junkie. Every Monday, join your host Ashley Flowers as she unravels all the details of infamous and underreported true crime cases with her best friend Brit Prawat. From cold cases to missing persons and heroes in our community who seek justice, Crime Junkie is your destination for theories and stories you won’t hear anywhere else. Whether you're a seasoned true crime enthusiast or new to the genre, you'll find yourself on the edge of your seat awaiting a new episode every Monday. If you can never get enough true crime... Congratulations, you’ve found your people. Follow to join a community of Crime Junkies! Crime Junkie is presented by audiochuck Media Company.