Stablecoins to $4 Trillion? Chainlink Founder Sergey Nazarov On Future Of Finance
Summary
Stablecoins and US Treasuries: Stablecoins are becoming significant holders of US Treasuries, positioned between Japan and Germany, with projections of growth to $4 trillion, driven by the US government's encouragement through the Genius Act.
DeFi and Monetary Policy: The Federal Reserve's rate cuts impact DeFi yields, which range from 5% to 14%, potentially increasing DeFi's total value locked as traditional yields decline, making DeFi more attractive.
Blockchain Adoption: Chainlink, a blockchain oracle network, is crucial for integrating real-world data into smart contracts, facilitating over $25 trillion in transactions and partnering with major institutions like the US Department of Commerce.
Tokenization of Assets: The tokenization of cash, equities, commodities, and funds is seen as the next evolution of the financial system, with the US positioned to gain market share if it adopts these technologies swiftly.
US Legislation and Crypto: The upcoming market structure bill aims to clarify regulations for cryptocurrencies and tokenization, legitimizing digital assets and potentially boosting the US's global financial standing.
Chainlink's Role: Chainlink's partnerships with financial institutions and governments, including providing economic data on-chain, highlight its role in advancing blockchain technology for traditional finance.
Geopolitical Implications: As financial systems move on-chain, the US is advised to capture the crypto market to maintain its financial system's relevance and influence in the global economy.
Transcript
The US will be well served to capture as much of the crypto market as humanly possible. Those stable coins will keep eating more of the treasury market. Stable coins as a group were the 18th largest holder of US treasury above Japan and below Germany. Treasurybacked stable coins are definitely going to grow which through the Genius Act the US government is uh highly encouraging. The question is, does your financial system have the best stuff for them to choose from? And if enough of them are in your financial system, then your financial system is really important. Our guest today is Sergey Nazro, co-founder of Chainlink, the industry's standard blockchain oracle network. Chainlink has become the critical infrastructure powering over $25 trillion in transaction value, connecting smart contracts to real world data across 60 plus blockchains. Major institutions including the US Department of Commerce rely on chain links technology. Sergey himself was present with Donald Trump and other US regulators a few months ago during the summer when the Genius Act was signed into law. We'll be getting his take on what the Genius Act means for the future of global finance. What's next for US legislation that could completely change DeFi and cryptos and what's next for blockchain adoption in our society. Welcome to the show, Sergey. Good to see you today. Thanks for being here. Happy to be here. Thanks for having me. I want to start by talking about something that's been on um a lot of investors minds. How the uh Fed pivot uh is going to affect DeFi. So the Fed as you know cut their uh uh lending rate by 25 basis points last week. We saw crypto markets initially rallying in response and then dip. From your perspective uh running critical infrastructure on DeFi traditionally how has DeFi um reacted or what goes on under the hood when monetary policy shifts? So the yield you can get on the US dollar in DeFi is um I think anywhere from 5 to 14%. Depending on the protocol and how they do something called looping. Generally speaking, uh if the Fed funds rate goes down and DeFi continues to have a large gap in the yield it can provide because of the demand for US dollars in the DeFi ecosystem. Uh that is actually the largest driving force of DeFi total value locked or assets under management is how you would put it in the traditional world. Right now, the total value locked in DeFi is at 360. It's fluctuating as high as 380, 386. Those are alltime highs. That's because of the yield rate you can get in DeFi. Now if the yield rate for the US dollar disappears more and more in other places and it remains even reasonably high in DeFi and access to DeFi the rails and the user experiences to access DeFi become more accessible. So the friction goes down that means more people can access that yield. then the total value uh locked within DeFi could grow past 500 billion, past the trillion. Uh and that is that's the historic largest force is is the is the ability to gain yield on assets in DeFi versus in centralized and traditional um methods. Okay. Now, we're talking about a world in which people are um viewing not just Fed policy, but also trade policy to make financial decisions. Now, you're building infrastructure that essentially operates on a financial system without central banks or political interference or pressure. How do you feel this moment where traditional monetary policy is trying to manage risk uh while DeFi is potentially offering an alternative uh way to manage financial risk altogether? In other words, is this the pivotal moment where we have massive institutional and retail flows into the DeFi world um to mitigate risks away from uncertainty around trade and monetary policies. So there's a few things going on there with monetary policy and trade policy. The biggest impact that monetary policy has had is all the money printing and and the PPP checks and things like that which many people put into crypto assets that floated the price and value of crypto assets much higher which then did capture a sufficiently large portion of institutional attention that institutional adoption of crypto grew. One good example of this is stable coins. So stable coins when they were below half a percent of all US treasuries were not that interesting to the US government. Once they crossed half a percent, the US government started to take a lot of notice because it's the treasury market, right? It's it's the core market the US government cares about and sees as a national security priority. So all of that um cheap money flowed into crypto. You need stable coins to trade in crypto. the stable coin um kind of volume grew that grew the the share of treasuries and then growing the share of treasuries it legitimized blockchain technology for the government and and for the capital markets. Now the trade policy force is much more a force of deglobalization. And so separately from monetary policy, I feel that crypto currencies and stable coins and what what are known as real world assets or digital assets, which are the capital markets versions of cryptocurrencies um are all going to be much more useful in a delobalized world because in delobalized world, what happens is you start to shut down the existing rails. So when you start shutting down the existing trad rails or you make them harder to use or you make them less able to to transact with people already now look towards crypto rails and stable coin rails as a frictionless alternative. Uh you can see this in some of the crossborder payment developments. You can see this in the adoption of stable coins like Tether in emerging markets that don't want to get on traditional rails. So the the the delobalization force is is driven by the trade policy of of the present that does create demand for an alternative financial system for payments, transfer of assets and and everything the financial system does. So those two forces right now are both very pro- crypto, right? Because the monetary policy force is still printing money, is still putting out, you know, a large amount of of um risk on appetite for valuation growth and the trade policy force is creating a lot of um degbalization fears. And so people are asking themselves, well, could I use a stable coin to pay an invoice instead of being in some system where because of del globalization, they could turn off the system. So both of those forces are extremely pro pro crypto, pro blockchain, pro real world assets, pro- stable coin. 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For investors looking for publicly traded ways to get exposure to Salana's momentum, Upexi might be one to watch. check out their investor presentation and latest updates using the link in the description down below or scan the QR code here. So this is what um well first of all before I'm going to show you a statement from Scottent Treasury Secretary but what is in your opinion the future of stable coins will mostly be reserve backed or will we see a resurgence in popularity of algo stable coins in other words a return of something like Lunatra? So you already have a return of algo stable coins through things like Athena and a few others that provide you the yield with like uh you know delta neutral type strategies. So you hey that return has happened already. It's it's managed on on the risk side a little bit differently but you know it's kind of algo stable coins are are are definitely doing well and growing. You also have um a growth in reservebacked stable coins which the stable coin bill the genius act requires them to be backed by treasuries. So you you you definitely have a growth in treasurybacked stable coins and that's really significant because those stable coins will keep eating more of the treasury market the US treasury market. When I looked into this last year, I think stable coins as a group were the 18th largest holder of US treasuries. I think above Japan and below Germany somewhere in the 18th spot. I'm positive they've grown far past that point now because of the growth in stable coins. The projections on stable coins right now are anywhere in the 1 to four trillion range while right now they're in the hundreds of billions, one two 300 billion. So I think algo stable coins will definitely be here. they'll still need collateral and in many cases that collateral will still be treasuries and the um treasurybacked stable coins are definitely going to grow because they're the most legitimate form of stable coins which through the Genius Act the the US government is uh I wouldn't say requiring but highly encouraging. Yeah. So this leads me to uh Scott Passen statement. Uh this groundbreaking technology he's talking about stable coins will buttress the dollar status as the global reserve currency, expand access to the dollar economy for billions across the globe and lead to a surge in demand for US treasuries. I believe you said in another interview on altcoin daily that uh we can see tokenized cash grow from 200 billion to 2 trillion relatively quickly. So, uh, going back to Scottan's statement, what will exactly happen to demand for US treasuries? I mean, is that is it necessarily true that we're going to see, you know, more demand right off the bat? Is it going to be phased in? Is it going to take on various other forms? Uh, or is this just another way to um, you know, sell uh, US assets to the world by the administration? there's going to be a huge surge in net new treasury purchases um from the stable coin community. I think what'll happen is the existing treasuries out there will be given to them as collateral and so there'll be downstream effects where the people that give them the treasuries like the custodians and the banks they end up buying more treasuries to fill the demand but I think that'll that'll happen gradually. I think it's really uh valuable for the US government as a source of diversification of who holds the treasuries because the consistent uh concern of many people in DC is the treasury market's vulnerability to countries dumping US treasuries. And so the difference between stable coin holders and countries is that if you have a few hundred million or billion stable coin holders, they all got to make a decision at the same time, right? Which is which is kind of not as not as easy as a single country or a single central bank saying I'm going to dump my US treasuries. So I think it's also viewed as an kind of diversification by the US government away from governments holding the US Treasury and onto consumers holding the US Treasury and not just US consumers but global consumers which which fundamentally what that does is it puts the US dollar in more people's hands which has a has a net beneficial effect of contributing to the perception of the US dollar as stable which is or or at least as a safe haven, you know, highv value stable asset, which is kind of, you know, what the US dollar needs most is that perception. And so, the more people you get to put their savings in the US dollar, the more you presumably uh but that perception. I'd like you to get to get your response, please, to uh this clip. It's a special advisor to Putin, Anton Kobakov. He's like he's kind of alluding to the fact that the US is using stable coins to devalue the dollar and wipe out its death. Take a listen. Foreign speech. Foreign speech. Foreign speech. pushing everyone into the crypto cloud. Um, what's your immediate response to what was just said? Even if the US revalues all of its gold to $15,000, it doesn't make enough of a dent. And when you look at its Bitcoin reserves and other digital asset reserves or stockpile, it makes less of a dent. So, it's just the numbers aren't big enough for something like that to work. Um, it it it isn't the arithmetic isn't there. You know, you can the the re the highest repricing value that I've heard for the gold reserves is $15,000. That's the highest number I've heard floated around. Even at that number, that 35 36 trillion doesn't you know, you don't reduce that by even 10%. 20%. It just doesn't doesn't happen. So, it's uh it's it's it's not um the arithmetic doesn't work on on on on that on that theory working or not working. it wouldn't it wouldn't make a big enough dent. Well, you were in the room actually when the uh Genius Act was signed. Um ultimately, if someone were to say a layman were to ask you, "Hey, uh Sergey, I'm just following the space. I'm just following the news." And I'm wondering how exactly the landscape of US commerce is going to change following the enactment of the Genius Act. In other words, once stable coins becomes more mainstream, once we have a large number of real world assets tokenized on mass, how will that ultimately change the US economy? How would you answer that very broad question? I think it's really the next generation of the of the financial system, the US financial system. And the question really is whether the US is going to adopt tokenization of their current financial system and what the market share gain or loss of the United States financial system is going to be relative to the global financial system. So my view is that the tokenization of cash through stable coins, tokenization of equity, tokenization of commodities, the tokenization of funds is a is an inevitable outcome for the global financial system. And this type of reformatting of the financial system only happens every maybe 50 years, 50 to 70 years. Last time it happened was basically in the 70s something like that with the appearance of the first databases and computers in the financial world. So during that migration of the financial system, the US because they had the internet and they were leaders in the database industry and the internet industry were able to you know put their financial markets on the internet before others and that led to a lot of success and market share gain for the US financial system relative to the rest of the global financial system right as as a share of it. I would say it's pretty much the same situation. So the the the financial system that tokenizes and creates all the efficiencies and benefits of tokenizing cash, equity, commodity and funds is going to gain share. Now obviously their existing position in the financial system and having a big domestic market like the US has and having relatively well reggulated and stable legal systems and markets like the US has that's all obviously a huge benefit and so that's a very serious foundation which you know someone else could come and erode by uh tokenizing more than the US for faster or better but if the US tokenizes faster and better than all other economies with the the large financial market they have and the stable regulatory environment and relatively low levels of fraud that they have relative to other markets then I think the US financial systems market share of the global system grows which is something by the way that now um it's pretty clear to the uh folks in Washington DC thanks also partly to them in this well on this road to us uh to tokenization. Uh chain link is playing a big role. So just last year for example, Swift UBS asset management chain leak successfully completed innovative pilots to bridge tokenized assets with existing payment systems according to a press release. Uh tell us about um your partnership with large financial institutions and ultimately why financial institutions are working with chain link um on this on this journey. Sure. So, Chainlink has enabled over $25 trillion US in transaction value, been live on production for for well over 5 years now, secure and reliably operating. There's no other system like Chain Link that can say that. And also, Chainlink has all the different capabilities that banks and asset managers and financial market infrastructures all need in order to do complex transactions. So blockchain transactions in the web 3D retail world are relatively simple. I'm on a chain, you're on a chain. We don't need to identify each other. We don't need to go through any uh pricing process. I send you my three cat coins, you send me your five dog coins, the Bitcoin price goes up, and we all make money. Great day for us. In the traditional financial world, however, you have accounting requirements, you have um security requirements, you have data requirements, you have all kinds of uh identity requirements. All those requirements need to be met by what's called an oracle or an Oracle network, which is what chain link pioneered. And so basically, chain link is the only system that can provide all those things that I told you in a single system. So only with chain link today can you make a token that's enabled crosschain connected back to identity getting reliable valuation data about the value of the underlying asset that's also compliant with the regulator and that uh meets all the accounting and books and records requirements for the transaction to happen. Those are all requirements that you don't have in web 3 but you do have in in the trady world. How far away are we until banks, large banks, put deposits and assets on chain such that when I'm chain, when I'm wiring somebody money, it's done through the blockchain. JP Morgan already has tokenized deposits uh on chain. Uh there's a number of other large banks that have tokenized deposits in uh in their internal systems. there is uh definitely a trend to go into production now uh this year and next year. So I would say we're now at the stage of of production implementation of those things. There are already banks with private chains where they use them to settle their internal client transactions. So in some form these these volumes are not public but they already exist. If you're talking about public chains, I would say that this year, next year are all the time. And do you think in the future when this happens, uh, consumers will or, uh, bank users will have a choice between whether or not to put their deposits on chain or will it happen automatically, uh, behind the scenes with all deposits? I think I think initially they'll there'll be a choice and there'll be a separate product and a separate experience because it'll be built by a separate team that's offering all kinds of digital asset things and you know they'll carve out a category of the of the banks and the asset managers users who want exposure to those blockchain things. I think eventually it's it's inevitable that it just powers everything and so it becomes a completely um given given outcome. It it it uh it's not like you choose, you know, what database the bank runs or how they secure that data. Like this stuff is not really something you care about, right? You just care about a transaction. You care about yield. You care about cyber security, but they don't tell you how they do the cyber security. They just kind of do it. Uh I I think it's it's inevitably going to become how everything works. And then there won't be a choice. The the challenge for our industry is in the in the early stages here in the trady world to show value, operational value, clearing and settlement value, the value of better collateral management, basically utility for tokenized things. That isn't just about the speculative value of the tokenized thing going higher. That that is what I think is now going to get proven out is that oh okay when I own an equity over here I can only trade it five days a week. When I own a tokenized equity I can trade it 24/7 365. Oh look at this. When I have a tokenized uh when I have a traditional fund I can't post it as collateral. When I have a tokenized fund I can't post it as collateral. Isn't that nice? Oh look at this. I have um a tokenized commodity contract. I can use it. I can use the value there and and relate to the collateral management system which is on only 215 21 hours 5 days a week. Or if I have a tokenized version of this commodity contract, I can do collateral management 24/7 365. Well, look at that. Isn't that nice? So all of these things require an ecosystem and that ecosystem is now coming into existence. Where where will these tokenized uh funds, equities, stocks, bonds, uh assets be traded? Is this still going to be on the same exchanges or are we looking at completely different exchanges and clearing houses for these products everywhere? That that's the fascinating thing about our industry. There's a certain transparency benefit which by the way regulators love whether they know it or not. Some of them do now, some of them still don't. So the transparency benefit is there. There's the trust minimization and tamperproofness benefit where transactions can't be manipulated. Everyone loves that whether they realize it or not. Then there is also the permissionless innovation benefit and I want to be clear what that means. That doesn't mean that anybody can just do anything. You will have contracts on chains that require AMLKYC verification in order for you to join that liquidity pool or for you to trade in that venue. But the difference is that everyone can spin up that venue or that liquidity pool in a lot of places. Now I still think there will be a lot of value in brokers, in the onboarding process, in advice, in the ability to aggregate liquidity into active markets and venues and liquidity pools. that will all have value, but I I don't think that'll be inherently um exclusive anymore to certain specific clearing and settlement systems or venues or or or a lot of other systems. uh I I think the challenge now will be how do you provide value separate from those core services of clearing and settlement or collateral management because everybody everybody everybody just gets that out of the box and just on that note let's talk about ISO 200022 it's a global standard for financial messaging that's used as a universal language for the financial industry uh many people don't understand its significance though can you just explain in plain in English, why it matters for global payments and tokenization. And for the second part of the question, uh, in Swift's pilot, uh, UBS's digital transfer agent raised a subscription and redemption on chain and then Swift's transaction manager triggered an ISO 200022 payment message. So, how does chain link fit into making that workflow seamless? Sure. So IC ISO 2022 is kind of like the English language of financial transactions. Like you and me are speaking English now. We can communicate and banks and asset managers and all the systems in finance they need to communicate and they need a standard way to send each other you know requests and information and define transactions and that's the 2022 uh kind of set of standards. Swift is is uh is is that set of standards for specific message types on specific topics. And what chain link does is it converts those ISO 2022 Swift messages and and others into blockchain transactions and events. So one of the things that chain link does is it takes existing financial infrastructure and systems like Swift and it converts them into blockchain events so that the Swift system can properly uh execute uh the necessary the necessary blockchain events. And then the reason that's valuable for UBS is that UBS and a lot of other banks and institutions are already on the 2022 standard and there's no reason to get rid of it. Right? So instead of describing in the ISO 2022 standard, I want to do this transaction and I want to execute my clearing and settlement operation over there. Now you describe the same transaction except you say I want to execute on a blockchain. But then something has to execute it on a blockchain for you which is what chain link does. So chain link will take the um the swift message and it'll essentially uh affect it on chain and then return all the proof back to the to the system the swift system and therefore get it back to UBS. I see. All right. Just going back to tokenization uh of real world assets one more time. This is a message well this is a question from a viewer directly to you actually Sergey. Uh he's asking you to respond to what Larry Frink of Black Rockck said. take a listen. Ethereum will have to approve an Ethereum ETF. And is that a function of something the SEC has to do or do you think that all these things have to go to court first? I couldn't respond to that. I I I see value in having an Ethereum ETF. As I said, these are just start stepping stones towards tokenization and I I really do believe this is where we're going to be going. We have the technology to tokenize today. If you want to talk about think about this if you had a tokenized security and you have a tokenized identity you Andrew the moment you buy or sell an instrument it's known it's on a general ledger that is all created together um you want to talk about issues around money laundering and all that this eliminates all corruption by having a tokenized system okay uh the question specifically is uh think said we have the technology to tokenize today what is this technology he's referring I would say it's uh smart contracts, blockchains and oracle networks like chain link. All of technologies need to work together. The blockchain is essentially the data um you know the data store of of of the transaction and the ledger. The smart contract is the token itself and how the token behaves. And then the oracle networks uh are the connection point to all the data to value the token, the ability to move the token across chains, the ability to add identity to the token. So for example, he mentioned adding identity to the token or to a token transaction. You can't add identity without an identity oracle which chain link is a very large provider of so you are basically in a world where you know the blockchain is like this public shared ledger database. The smart contract is the actual financial terms of the agreement, the actual ownership record, and then the Oracle networks are all the systems around the contract that need to operate for it to successfully do what it's supposed to do, value the contract, move the contract across chains, provide identity proofs, so on and so on. Um, I'd like to talk to you about uh Chain Link's partnership with the government. Now, it's becoming closer and closer with the government. So last month I believe um a major announcement was released where uh there was a partnership with the government and uh key economic data including uh GDP data from the Bureau of Economic Analysis uh PCE index and uh and uh private sales, private domestic purchases are now accessible on chain through chain link data feeds. Can you tell us about this initiative and ultimately why you're partnering with the government to do so? Yeah. Yeah, absolutely. Happy happy to chat about it. So we work closely with different regulators, different departments of the US government, thinking with them and working with them on how they're going to adopt uh smart contracts, Oracle networks, including how they're going to get data on chain. In this case, it was about putting economic data on chain for the US commerce department as uh the kind of largest provider of that service and providing the most data from the US commerce department onto the most chains. we we were able to provide um you know valuable data set essentially to the blockchain community which is what the US commerce department wanted right they wanted the blockchain community to have access to this data and to build things around it and we're still working through how to how to go to the next stage and how to get more and more of the of the blockchain community building on this data there's a lot of other engagements and work and conversations we're having with the with the US government different departments different regulators is our work with many central banks in other countries and our work with the largest financial institutions I think put us in a pretty unique place to work with the regulators and the departments of the US government which I I think they they share that view as well. um economic data as you know the releases are incredibly timesensitive. A lot of traders uh stake millions if not billions of dollars trading data that comes out at exactly a certain time of the day uh prescheduled. How do you how can you ensure that chain links decentralized oracle network can match that level of precision when it comes to data releases on chain across multiple blockchains. That is sure well well the data is coming from the uh official US commerce department APIs. So that's the data source and then it's a matter of the Oracle networks doing what they're supposed to do and publishing the data in a timely fashion. And the chain link network has the best uptime, the most timely delivery of data across the many many chains and it's the longest running Oracle network with the best track record. So I think the track record we have for delivering this data reliably speaks for itself. Uh finally uh you you you mentioned uh in another interview that we're kind of mirroring the internet era of of crypto and defy adoption. So what's next per your projection? We've got the stable coin um trend. We've got the real world asset tokenization trend. What do you think the government is planning next after the Genius Act? What is the next landmark legislative change that we can look forward to, Sergey? That that's the market structure bill that's currently being uh worked on in the in the Senate and that is about clarifying how regulation applies to cryptocurrencies and tokenization on blockchains in general. Uh, I think what that'll do is it'll legitimize the issuance of a token, the creation of a cryptocurrency, the launch of a memecoin, the launch of an NFT, and make it legal and and eliminate the legal risk of launching a cryptocurrency, launching a memecoin, launching an NFT. I think it'll also provide some comfort to those that want to make digital assets. So, tokenized equity, tokenized commodity, tokenized funds. It won't completely comfort them because commodities, equities, and funds have long-standing regulatory guidance and laws and rules that still need to be meshed even after the bill is uh the bill is signed. But I definitely think the market structure bill will be a huge step forward. It won't just be about stable coins. It'll be about all tokenized things. And I think that'll be a big big milestone for our industry. That's that's definitely what's next. I know that's definitely what the White House is focused on. That's definitely what uh folks in the Senate Banking and Finance Committee and other committees are focused on. Uh who we talk to regularly and have good conversations with about the importance of this bill and uh would really like to see it, you know, come to fruition. Uh final question, are we witnessing the moment where blockchain uh stops becoming the technology for just cryptos alone, but is now the technology where will soon become the techn technological backbone for the entire financial system and not just for the crypto asset class? Yes, I I think what's going to happen now is you're going to have enough tokenized cash to create enough market demand for more tokenization of real world assets. So the bigger the the bigger the stable coin market gets, the more of a market you have to easily sell digital assets to, right? So if you have a market of 200 billion, that's one thing. If you have a market of two trillion, that's another thing. That's going to encourage the creation of more digital assets that can be easily and frictionlessly bought via stable coins. Once the digital assets, the real world assets appear, you will start to see the growth of an ecosystem. an ecosystem around trading, secondary markets, various exciting new forms of collateral management. And I think when this ecosystem appears, what you'll see is that the benefits of a tokenized equity, a tokenized commodity, and a tokenized fund so far outstrip what a traditional equity, traditional commodity, and traditional fund are capable of that everyone will just say like, look, you know, I really would prefer if you could give me this equity as a tokenized thing or I really would like it if you could do it for me, if I could get this fund in a tokenized form because then I can post it as collateral which is valuable to me because you know it saves me cash it saves me stuff on the other side. I think once that ecosystem provides that utility value of tokenized financial products and smart contract powered financial relationships, uh there will be a kind of realization moment where the financial system says basically what you saw Larry Frink say which is like this is way better, right? Larry Frink basically looked at it and said, "This is way better, and I'm I'm sure it's way better." And the rest of the financial system, they're so busy doing what they're doing on a day-to-day basis, you know, they're not as deeply thoughtful as Larry Frink, they haven't looked into it. But once they start using it, they'll they won't have a choice. The system will provide them the value and they'll they can't ignore it anymore because the value is there. that ecosystem of secondary markets, trading venues, collateral management relationships, smart contract uh risk relationships, automated risk management, automated compliance. It doesn't exist yet. You know, chain link is powering a lot of the first pilots of it and first production usages of it. But once it exists, it's it's going to speak for itself. Uh final question, I'll let you go. I wonder how this will impact geopolitics. You know that as you know the US has weaponized swift has weaponized the dollar. It is able to use the swift system to sanction a lot of countries around the world including Russia including North Korea including Iran. If everything moves onchain the US loses that power. What happens next? I think the US will be well served to capture as much of the crypto market as humanly possible. there there isn't anymore a world in 2030 years where people people don't have a choice. I think they have a choice. I think the question is does your financial system have the best stuff for them to choose from? And if enough of them are in your financial system, then your financial system is really important. And if if if your financial system doesn't have the best stuff, then it's not so important. Okay. Thank you very much. So, where can we learn more about you and uh follow your work in the meantime? Uh chain.link. On Twitter, it's chain link. And my Twitter, what is my Twitter? I think it's my first name and my last name. Sergey Nazerof. We'll put the Yeah, we'll put the X handle down below. Um we'll we'll find it for you. Yeah, it is your first name and last name. And uh so yeah, make sure to follow Sergey there. We'll put the links down below. And uh appreciate your time, Sergey. It was a pleasure meeting you and thank you for coming on the show. My pleasure. I appreciate your thoughtful, well thoughtout questions. Thank you. Thank you. And thank you for watching. Don't forget to like and subscribe.
Stablecoins to $4 Trillion? Chainlink Founder Sergey Nazarov On Future Of Finance
Summary
Transcript
The US will be well served to capture as much of the crypto market as humanly possible. Those stable coins will keep eating more of the treasury market. Stable coins as a group were the 18th largest holder of US treasury above Japan and below Germany. Treasurybacked stable coins are definitely going to grow which through the Genius Act the US government is uh highly encouraging. The question is, does your financial system have the best stuff for them to choose from? And if enough of them are in your financial system, then your financial system is really important. Our guest today is Sergey Nazro, co-founder of Chainlink, the industry's standard blockchain oracle network. Chainlink has become the critical infrastructure powering over $25 trillion in transaction value, connecting smart contracts to real world data across 60 plus blockchains. Major institutions including the US Department of Commerce rely on chain links technology. Sergey himself was present with Donald Trump and other US regulators a few months ago during the summer when the Genius Act was signed into law. We'll be getting his take on what the Genius Act means for the future of global finance. What's next for US legislation that could completely change DeFi and cryptos and what's next for blockchain adoption in our society. Welcome to the show, Sergey. Good to see you today. Thanks for being here. Happy to be here. Thanks for having me. I want to start by talking about something that's been on um a lot of investors minds. How the uh Fed pivot uh is going to affect DeFi. So the Fed as you know cut their uh uh lending rate by 25 basis points last week. We saw crypto markets initially rallying in response and then dip. From your perspective uh running critical infrastructure on DeFi traditionally how has DeFi um reacted or what goes on under the hood when monetary policy shifts? So the yield you can get on the US dollar in DeFi is um I think anywhere from 5 to 14%. Depending on the protocol and how they do something called looping. Generally speaking, uh if the Fed funds rate goes down and DeFi continues to have a large gap in the yield it can provide because of the demand for US dollars in the DeFi ecosystem. Uh that is actually the largest driving force of DeFi total value locked or assets under management is how you would put it in the traditional world. Right now, the total value locked in DeFi is at 360. It's fluctuating as high as 380, 386. Those are alltime highs. That's because of the yield rate you can get in DeFi. Now if the yield rate for the US dollar disappears more and more in other places and it remains even reasonably high in DeFi and access to DeFi the rails and the user experiences to access DeFi become more accessible. So the friction goes down that means more people can access that yield. then the total value uh locked within DeFi could grow past 500 billion, past the trillion. Uh and that is that's the historic largest force is is the is the ability to gain yield on assets in DeFi versus in centralized and traditional um methods. Okay. Now, we're talking about a world in which people are um viewing not just Fed policy, but also trade policy to make financial decisions. Now, you're building infrastructure that essentially operates on a financial system without central banks or political interference or pressure. How do you feel this moment where traditional monetary policy is trying to manage risk uh while DeFi is potentially offering an alternative uh way to manage financial risk altogether? In other words, is this the pivotal moment where we have massive institutional and retail flows into the DeFi world um to mitigate risks away from uncertainty around trade and monetary policies. So there's a few things going on there with monetary policy and trade policy. The biggest impact that monetary policy has had is all the money printing and and the PPP checks and things like that which many people put into crypto assets that floated the price and value of crypto assets much higher which then did capture a sufficiently large portion of institutional attention that institutional adoption of crypto grew. One good example of this is stable coins. So stable coins when they were below half a percent of all US treasuries were not that interesting to the US government. Once they crossed half a percent, the US government started to take a lot of notice because it's the treasury market, right? It's it's the core market the US government cares about and sees as a national security priority. So all of that um cheap money flowed into crypto. You need stable coins to trade in crypto. the stable coin um kind of volume grew that grew the the share of treasuries and then growing the share of treasuries it legitimized blockchain technology for the government and and for the capital markets. Now the trade policy force is much more a force of deglobalization. And so separately from monetary policy, I feel that crypto currencies and stable coins and what what are known as real world assets or digital assets, which are the capital markets versions of cryptocurrencies um are all going to be much more useful in a delobalized world because in delobalized world, what happens is you start to shut down the existing rails. So when you start shutting down the existing trad rails or you make them harder to use or you make them less able to to transact with people already now look towards crypto rails and stable coin rails as a frictionless alternative. Uh you can see this in some of the crossborder payment developments. You can see this in the adoption of stable coins like Tether in emerging markets that don't want to get on traditional rails. So the the the delobalization force is is driven by the trade policy of of the present that does create demand for an alternative financial system for payments, transfer of assets and and everything the financial system does. So those two forces right now are both very pro- crypto, right? Because the monetary policy force is still printing money, is still putting out, you know, a large amount of of um risk on appetite for valuation growth and the trade policy force is creating a lot of um degbalization fears. And so people are asking themselves, well, could I use a stable coin to pay an invoice instead of being in some system where because of del globalization, they could turn off the system. So both of those forces are extremely pro pro crypto, pro blockchain, pro real world assets, pro- stable coin. 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For investors looking for publicly traded ways to get exposure to Salana's momentum, Upexi might be one to watch. check out their investor presentation and latest updates using the link in the description down below or scan the QR code here. So this is what um well first of all before I'm going to show you a statement from Scottent Treasury Secretary but what is in your opinion the future of stable coins will mostly be reserve backed or will we see a resurgence in popularity of algo stable coins in other words a return of something like Lunatra? So you already have a return of algo stable coins through things like Athena and a few others that provide you the yield with like uh you know delta neutral type strategies. So you hey that return has happened already. It's it's managed on on the risk side a little bit differently but you know it's kind of algo stable coins are are are definitely doing well and growing. You also have um a growth in reservebacked stable coins which the stable coin bill the genius act requires them to be backed by treasuries. So you you you definitely have a growth in treasurybacked stable coins and that's really significant because those stable coins will keep eating more of the treasury market the US treasury market. When I looked into this last year, I think stable coins as a group were the 18th largest holder of US treasuries. I think above Japan and below Germany somewhere in the 18th spot. I'm positive they've grown far past that point now because of the growth in stable coins. The projections on stable coins right now are anywhere in the 1 to four trillion range while right now they're in the hundreds of billions, one two 300 billion. So I think algo stable coins will definitely be here. they'll still need collateral and in many cases that collateral will still be treasuries and the um treasurybacked stable coins are definitely going to grow because they're the most legitimate form of stable coins which through the Genius Act the the US government is uh I wouldn't say requiring but highly encouraging. Yeah. So this leads me to uh Scott Passen statement. Uh this groundbreaking technology he's talking about stable coins will buttress the dollar status as the global reserve currency, expand access to the dollar economy for billions across the globe and lead to a surge in demand for US treasuries. I believe you said in another interview on altcoin daily that uh we can see tokenized cash grow from 200 billion to 2 trillion relatively quickly. So, uh, going back to Scottan's statement, what will exactly happen to demand for US treasuries? I mean, is that is it necessarily true that we're going to see, you know, more demand right off the bat? Is it going to be phased in? Is it going to take on various other forms? Uh, or is this just another way to um, you know, sell uh, US assets to the world by the administration? there's going to be a huge surge in net new treasury purchases um from the stable coin community. I think what'll happen is the existing treasuries out there will be given to them as collateral and so there'll be downstream effects where the people that give them the treasuries like the custodians and the banks they end up buying more treasuries to fill the demand but I think that'll that'll happen gradually. I think it's really uh valuable for the US government as a source of diversification of who holds the treasuries because the consistent uh concern of many people in DC is the treasury market's vulnerability to countries dumping US treasuries. And so the difference between stable coin holders and countries is that if you have a few hundred million or billion stable coin holders, they all got to make a decision at the same time, right? Which is which is kind of not as not as easy as a single country or a single central bank saying I'm going to dump my US treasuries. So I think it's also viewed as an kind of diversification by the US government away from governments holding the US Treasury and onto consumers holding the US Treasury and not just US consumers but global consumers which which fundamentally what that does is it puts the US dollar in more people's hands which has a has a net beneficial effect of contributing to the perception of the US dollar as stable which is or or at least as a safe haven, you know, highv value stable asset, which is kind of, you know, what the US dollar needs most is that perception. And so, the more people you get to put their savings in the US dollar, the more you presumably uh but that perception. I'd like you to get to get your response, please, to uh this clip. It's a special advisor to Putin, Anton Kobakov. He's like he's kind of alluding to the fact that the US is using stable coins to devalue the dollar and wipe out its death. Take a listen. Foreign speech. Foreign speech. Foreign speech. pushing everyone into the crypto cloud. Um, what's your immediate response to what was just said? Even if the US revalues all of its gold to $15,000, it doesn't make enough of a dent. And when you look at its Bitcoin reserves and other digital asset reserves or stockpile, it makes less of a dent. So, it's just the numbers aren't big enough for something like that to work. Um, it it it isn't the arithmetic isn't there. You know, you can the the re the highest repricing value that I've heard for the gold reserves is $15,000. That's the highest number I've heard floated around. Even at that number, that 35 36 trillion doesn't you know, you don't reduce that by even 10%. 20%. It just doesn't doesn't happen. So, it's uh it's it's it's not um the arithmetic doesn't work on on on on that on that theory working or not working. it wouldn't it wouldn't make a big enough dent. Well, you were in the room actually when the uh Genius Act was signed. Um ultimately, if someone were to say a layman were to ask you, "Hey, uh Sergey, I'm just following the space. I'm just following the news." And I'm wondering how exactly the landscape of US commerce is going to change following the enactment of the Genius Act. In other words, once stable coins becomes more mainstream, once we have a large number of real world assets tokenized on mass, how will that ultimately change the US economy? How would you answer that very broad question? I think it's really the next generation of the of the financial system, the US financial system. And the question really is whether the US is going to adopt tokenization of their current financial system and what the market share gain or loss of the United States financial system is going to be relative to the global financial system. So my view is that the tokenization of cash through stable coins, tokenization of equity, tokenization of commodities, the tokenization of funds is a is an inevitable outcome for the global financial system. And this type of reformatting of the financial system only happens every maybe 50 years, 50 to 70 years. Last time it happened was basically in the 70s something like that with the appearance of the first databases and computers in the financial world. So during that migration of the financial system, the US because they had the internet and they were leaders in the database industry and the internet industry were able to you know put their financial markets on the internet before others and that led to a lot of success and market share gain for the US financial system relative to the rest of the global financial system right as as a share of it. I would say it's pretty much the same situation. So the the the financial system that tokenizes and creates all the efficiencies and benefits of tokenizing cash, equity, commodity and funds is going to gain share. Now obviously their existing position in the financial system and having a big domestic market like the US has and having relatively well reggulated and stable legal systems and markets like the US has that's all obviously a huge benefit and so that's a very serious foundation which you know someone else could come and erode by uh tokenizing more than the US for faster or better but if the US tokenizes faster and better than all other economies with the the large financial market they have and the stable regulatory environment and relatively low levels of fraud that they have relative to other markets then I think the US financial systems market share of the global system grows which is something by the way that now um it's pretty clear to the uh folks in Washington DC thanks also partly to them in this well on this road to us uh to tokenization. Uh chain link is playing a big role. So just last year for example, Swift UBS asset management chain leak successfully completed innovative pilots to bridge tokenized assets with existing payment systems according to a press release. Uh tell us about um your partnership with large financial institutions and ultimately why financial institutions are working with chain link um on this on this journey. Sure. So, Chainlink has enabled over $25 trillion US in transaction value, been live on production for for well over 5 years now, secure and reliably operating. There's no other system like Chain Link that can say that. And also, Chainlink has all the different capabilities that banks and asset managers and financial market infrastructures all need in order to do complex transactions. So blockchain transactions in the web 3D retail world are relatively simple. I'm on a chain, you're on a chain. We don't need to identify each other. We don't need to go through any uh pricing process. I send you my three cat coins, you send me your five dog coins, the Bitcoin price goes up, and we all make money. Great day for us. In the traditional financial world, however, you have accounting requirements, you have um security requirements, you have data requirements, you have all kinds of uh identity requirements. All those requirements need to be met by what's called an oracle or an Oracle network, which is what chain link pioneered. And so basically, chain link is the only system that can provide all those things that I told you in a single system. So only with chain link today can you make a token that's enabled crosschain connected back to identity getting reliable valuation data about the value of the underlying asset that's also compliant with the regulator and that uh meets all the accounting and books and records requirements for the transaction to happen. Those are all requirements that you don't have in web 3 but you do have in in the trady world. How far away are we until banks, large banks, put deposits and assets on chain such that when I'm chain, when I'm wiring somebody money, it's done through the blockchain. JP Morgan already has tokenized deposits uh on chain. Uh there's a number of other large banks that have tokenized deposits in uh in their internal systems. there is uh definitely a trend to go into production now uh this year and next year. So I would say we're now at the stage of of production implementation of those things. There are already banks with private chains where they use them to settle their internal client transactions. So in some form these these volumes are not public but they already exist. If you're talking about public chains, I would say that this year, next year are all the time. And do you think in the future when this happens, uh, consumers will or, uh, bank users will have a choice between whether or not to put their deposits on chain or will it happen automatically, uh, behind the scenes with all deposits? I think I think initially they'll there'll be a choice and there'll be a separate product and a separate experience because it'll be built by a separate team that's offering all kinds of digital asset things and you know they'll carve out a category of the of the banks and the asset managers users who want exposure to those blockchain things. I think eventually it's it's inevitable that it just powers everything and so it becomes a completely um given given outcome. It it it uh it's not like you choose, you know, what database the bank runs or how they secure that data. Like this stuff is not really something you care about, right? You just care about a transaction. You care about yield. You care about cyber security, but they don't tell you how they do the cyber security. They just kind of do it. Uh I I think it's it's inevitably going to become how everything works. And then there won't be a choice. The the challenge for our industry is in the in the early stages here in the trady world to show value, operational value, clearing and settlement value, the value of better collateral management, basically utility for tokenized things. That isn't just about the speculative value of the tokenized thing going higher. That that is what I think is now going to get proven out is that oh okay when I own an equity over here I can only trade it five days a week. When I own a tokenized equity I can trade it 24/7 365. Oh look at this. When I have a tokenized uh when I have a traditional fund I can't post it as collateral. When I have a tokenized fund I can't post it as collateral. Isn't that nice? Oh look at this. I have um a tokenized commodity contract. I can use it. I can use the value there and and relate to the collateral management system which is on only 215 21 hours 5 days a week. Or if I have a tokenized version of this commodity contract, I can do collateral management 24/7 365. Well, look at that. Isn't that nice? So all of these things require an ecosystem and that ecosystem is now coming into existence. Where where will these tokenized uh funds, equities, stocks, bonds, uh assets be traded? Is this still going to be on the same exchanges or are we looking at completely different exchanges and clearing houses for these products everywhere? That that's the fascinating thing about our industry. There's a certain transparency benefit which by the way regulators love whether they know it or not. Some of them do now, some of them still don't. So the transparency benefit is there. There's the trust minimization and tamperproofness benefit where transactions can't be manipulated. Everyone loves that whether they realize it or not. Then there is also the permissionless innovation benefit and I want to be clear what that means. That doesn't mean that anybody can just do anything. You will have contracts on chains that require AMLKYC verification in order for you to join that liquidity pool or for you to trade in that venue. But the difference is that everyone can spin up that venue or that liquidity pool in a lot of places. Now I still think there will be a lot of value in brokers, in the onboarding process, in advice, in the ability to aggregate liquidity into active markets and venues and liquidity pools. that will all have value, but I I don't think that'll be inherently um exclusive anymore to certain specific clearing and settlement systems or venues or or or a lot of other systems. uh I I think the challenge now will be how do you provide value separate from those core services of clearing and settlement or collateral management because everybody everybody everybody just gets that out of the box and just on that note let's talk about ISO 200022 it's a global standard for financial messaging that's used as a universal language for the financial industry uh many people don't understand its significance though can you just explain in plain in English, why it matters for global payments and tokenization. And for the second part of the question, uh, in Swift's pilot, uh, UBS's digital transfer agent raised a subscription and redemption on chain and then Swift's transaction manager triggered an ISO 200022 payment message. So, how does chain link fit into making that workflow seamless? Sure. So IC ISO 2022 is kind of like the English language of financial transactions. Like you and me are speaking English now. We can communicate and banks and asset managers and all the systems in finance they need to communicate and they need a standard way to send each other you know requests and information and define transactions and that's the 2022 uh kind of set of standards. Swift is is uh is is that set of standards for specific message types on specific topics. And what chain link does is it converts those ISO 2022 Swift messages and and others into blockchain transactions and events. So one of the things that chain link does is it takes existing financial infrastructure and systems like Swift and it converts them into blockchain events so that the Swift system can properly uh execute uh the necessary the necessary blockchain events. And then the reason that's valuable for UBS is that UBS and a lot of other banks and institutions are already on the 2022 standard and there's no reason to get rid of it. Right? So instead of describing in the ISO 2022 standard, I want to do this transaction and I want to execute my clearing and settlement operation over there. Now you describe the same transaction except you say I want to execute on a blockchain. But then something has to execute it on a blockchain for you which is what chain link does. So chain link will take the um the swift message and it'll essentially uh affect it on chain and then return all the proof back to the to the system the swift system and therefore get it back to UBS. I see. All right. Just going back to tokenization uh of real world assets one more time. This is a message well this is a question from a viewer directly to you actually Sergey. Uh he's asking you to respond to what Larry Frink of Black Rockck said. take a listen. Ethereum will have to approve an Ethereum ETF. And is that a function of something the SEC has to do or do you think that all these things have to go to court first? I couldn't respond to that. I I I see value in having an Ethereum ETF. As I said, these are just start stepping stones towards tokenization and I I really do believe this is where we're going to be going. We have the technology to tokenize today. If you want to talk about think about this if you had a tokenized security and you have a tokenized identity you Andrew the moment you buy or sell an instrument it's known it's on a general ledger that is all created together um you want to talk about issues around money laundering and all that this eliminates all corruption by having a tokenized system okay uh the question specifically is uh think said we have the technology to tokenize today what is this technology he's referring I would say it's uh smart contracts, blockchains and oracle networks like chain link. All of technologies need to work together. The blockchain is essentially the data um you know the data store of of of the transaction and the ledger. The smart contract is the token itself and how the token behaves. And then the oracle networks uh are the connection point to all the data to value the token, the ability to move the token across chains, the ability to add identity to the token. So for example, he mentioned adding identity to the token or to a token transaction. You can't add identity without an identity oracle which chain link is a very large provider of so you are basically in a world where you know the blockchain is like this public shared ledger database. The smart contract is the actual financial terms of the agreement, the actual ownership record, and then the Oracle networks are all the systems around the contract that need to operate for it to successfully do what it's supposed to do, value the contract, move the contract across chains, provide identity proofs, so on and so on. Um, I'd like to talk to you about uh Chain Link's partnership with the government. Now, it's becoming closer and closer with the government. So last month I believe um a major announcement was released where uh there was a partnership with the government and uh key economic data including uh GDP data from the Bureau of Economic Analysis uh PCE index and uh and uh private sales, private domestic purchases are now accessible on chain through chain link data feeds. Can you tell us about this initiative and ultimately why you're partnering with the government to do so? Yeah. Yeah, absolutely. Happy happy to chat about it. So we work closely with different regulators, different departments of the US government, thinking with them and working with them on how they're going to adopt uh smart contracts, Oracle networks, including how they're going to get data on chain. In this case, it was about putting economic data on chain for the US commerce department as uh the kind of largest provider of that service and providing the most data from the US commerce department onto the most chains. we we were able to provide um you know valuable data set essentially to the blockchain community which is what the US commerce department wanted right they wanted the blockchain community to have access to this data and to build things around it and we're still working through how to how to go to the next stage and how to get more and more of the of the blockchain community building on this data there's a lot of other engagements and work and conversations we're having with the with the US government different departments different regulators is our work with many central banks in other countries and our work with the largest financial institutions I think put us in a pretty unique place to work with the regulators and the departments of the US government which I I think they they share that view as well. um economic data as you know the releases are incredibly timesensitive. A lot of traders uh stake millions if not billions of dollars trading data that comes out at exactly a certain time of the day uh prescheduled. How do you how can you ensure that chain links decentralized oracle network can match that level of precision when it comes to data releases on chain across multiple blockchains. That is sure well well the data is coming from the uh official US commerce department APIs. So that's the data source and then it's a matter of the Oracle networks doing what they're supposed to do and publishing the data in a timely fashion. And the chain link network has the best uptime, the most timely delivery of data across the many many chains and it's the longest running Oracle network with the best track record. So I think the track record we have for delivering this data reliably speaks for itself. Uh finally uh you you you mentioned uh in another interview that we're kind of mirroring the internet era of of crypto and defy adoption. So what's next per your projection? We've got the stable coin um trend. We've got the real world asset tokenization trend. What do you think the government is planning next after the Genius Act? What is the next landmark legislative change that we can look forward to, Sergey? That that's the market structure bill that's currently being uh worked on in the in the Senate and that is about clarifying how regulation applies to cryptocurrencies and tokenization on blockchains in general. Uh, I think what that'll do is it'll legitimize the issuance of a token, the creation of a cryptocurrency, the launch of a memecoin, the launch of an NFT, and make it legal and and eliminate the legal risk of launching a cryptocurrency, launching a memecoin, launching an NFT. I think it'll also provide some comfort to those that want to make digital assets. So, tokenized equity, tokenized commodity, tokenized funds. It won't completely comfort them because commodities, equities, and funds have long-standing regulatory guidance and laws and rules that still need to be meshed even after the bill is uh the bill is signed. But I definitely think the market structure bill will be a huge step forward. It won't just be about stable coins. It'll be about all tokenized things. And I think that'll be a big big milestone for our industry. That's that's definitely what's next. I know that's definitely what the White House is focused on. That's definitely what uh folks in the Senate Banking and Finance Committee and other committees are focused on. Uh who we talk to regularly and have good conversations with about the importance of this bill and uh would really like to see it, you know, come to fruition. Uh final question, are we witnessing the moment where blockchain uh stops becoming the technology for just cryptos alone, but is now the technology where will soon become the techn technological backbone for the entire financial system and not just for the crypto asset class? Yes, I I think what's going to happen now is you're going to have enough tokenized cash to create enough market demand for more tokenization of real world assets. So the bigger the the bigger the stable coin market gets, the more of a market you have to easily sell digital assets to, right? So if you have a market of 200 billion, that's one thing. If you have a market of two trillion, that's another thing. That's going to encourage the creation of more digital assets that can be easily and frictionlessly bought via stable coins. Once the digital assets, the real world assets appear, you will start to see the growth of an ecosystem. an ecosystem around trading, secondary markets, various exciting new forms of collateral management. And I think when this ecosystem appears, what you'll see is that the benefits of a tokenized equity, a tokenized commodity, and a tokenized fund so far outstrip what a traditional equity, traditional commodity, and traditional fund are capable of that everyone will just say like, look, you know, I really would prefer if you could give me this equity as a tokenized thing or I really would like it if you could do it for me, if I could get this fund in a tokenized form because then I can post it as collateral which is valuable to me because you know it saves me cash it saves me stuff on the other side. I think once that ecosystem provides that utility value of tokenized financial products and smart contract powered financial relationships, uh there will be a kind of realization moment where the financial system says basically what you saw Larry Frink say which is like this is way better, right? Larry Frink basically looked at it and said, "This is way better, and I'm I'm sure it's way better." And the rest of the financial system, they're so busy doing what they're doing on a day-to-day basis, you know, they're not as deeply thoughtful as Larry Frink, they haven't looked into it. But once they start using it, they'll they won't have a choice. The system will provide them the value and they'll they can't ignore it anymore because the value is there. that ecosystem of secondary markets, trading venues, collateral management relationships, smart contract uh risk relationships, automated risk management, automated compliance. It doesn't exist yet. You know, chain link is powering a lot of the first pilots of it and first production usages of it. But once it exists, it's it's going to speak for itself. Uh final question, I'll let you go. I wonder how this will impact geopolitics. You know that as you know the US has weaponized swift has weaponized the dollar. It is able to use the swift system to sanction a lot of countries around the world including Russia including North Korea including Iran. If everything moves onchain the US loses that power. What happens next? I think the US will be well served to capture as much of the crypto market as humanly possible. there there isn't anymore a world in 2030 years where people people don't have a choice. I think they have a choice. I think the question is does your financial system have the best stuff for them to choose from? And if enough of them are in your financial system, then your financial system is really important. And if if if your financial system doesn't have the best stuff, then it's not so important. Okay. Thank you very much. So, where can we learn more about you and uh follow your work in the meantime? Uh chain.link. On Twitter, it's chain link. And my Twitter, what is my Twitter? I think it's my first name and my last name. Sergey Nazerof. We'll put the Yeah, we'll put the X handle down below. Um we'll we'll find it for you. Yeah, it is your first name and last name. And uh so yeah, make sure to follow Sergey there. We'll put the links down below. And uh appreciate your time, Sergey. It was a pleasure meeting you and thank you for coming on the show. My pleasure. I appreciate your thoughtful, well thoughtout questions. Thank you. Thank you. And thank you for watching. Don't forget to like and subscribe.