[ MUSIC ] Welcome to Balancing the Ledger where tech and finance intersect. I'm Jen Biechner. I'm Jeff Roberts. And today we're joined by Rachel Mayer, the Head of Circle Invest. Thank you so much for being here Rachel. Great to be here. Okay. So some big news out of the SEC. They've announced that Ethereum, the cryptocurrency, is definitively not a security. This was some guidance that people have been highly anticipating for a while, verses, there were some reports that the SEC might go back and designate Ethereum is not a security, which would obviously have major implications for how exchanges list Ethereum, and many other cryptocurrencies. Rachel, does this now pave the way for exchanges to list more crypto currencies without having to worry about the SAC? I think the more guidance we get at the federal level, the better. As product builders, we can operate under clear, concise rules, and that will include the guidance on further listing new assets and circles various products too. I saw recently this news on Coinbase, that they added Ethereum Classic into their platform this week. And with Circle Invest, the product that we're working on, we included Ethereum Classic from the beginning when we came out of beta three months ago. So Circle Invest launched with Bitcoin, Bitcoin Cash, Litecoin, Ethereum and Ethereum Classic. And we're continuously adding more and more. We recently added Z cash and [ INAUDIBLE ] arrow. We constantly operate under our current licensure so, every single listing goes through a bidding process with inside our trading policies. We have a working group that establishes for prior to our securities framework. So, everything that we do is listed and consistent with our current license insurance from money transmission and for the [ INAUDIBLE ] states. And the bit license here in New York. But part of our mission is to bring the breadth and variety of crypto assets to life for consumers, and that will always include adding and listing new types of assets. Rachel, I've got a question that circle you've had, it seems the regulatory picture is brightening, we're getting more clarity people have long wanted. And yet, the price slumps have been pretty bad. BitCoin's down a lot. There's rumors of, you know, price manipulation and stuff like that. So what's going on? It seems we're getting good news from the SCC, and yet cryptoprices are slumping. What's going on? Yeah, I think it's down 70 %, I think, from the peak in December. Yeah I mean this is a market that is still in its early days. Liquidity is still highly thin and most of the demand even throughout last year that we saw is driven by purely consumer and individual interest. And with that, any news break has a compounding effect, specifically when it comes to sell offs And it's very much driven by emotional investing from a consumer and retail audience. But even at Circle and very specifically at Circle Invest, we wanna focus the narrative away from bare markets and price fluctuations, and more into a long- term approach. To really bring back value into what this technology is trying to achieve. And increase Crypto financial literacy to the everyday person and focus away on the price and more on like what is the theorem actually trying to achieve This study that came out this week about the manipulation was about how [ UNKNOWN ] which is stable coin [ UNKNOWN ] the US dollar may have been used to influence as much as half of their increase in BitCoin we saw last year I know [ UNKNOWN ] is used as a currency on [ UNKNOWN ] which is owned by Sacco and you guys have also know there is gonna be a launching a stable coin. Can you talk a little bit about what the advantage is such a coin offers. So I think what that study highlighted was some of the concerns around Tether specifically. They tend to operate under lack of financial and operational transparency and offshore jurisdictions and in closed loop forums with unclear audit or banking partners. In circles trying to achieve solve all of those problems by introducing our own stablecoin called USDC and really solve some of those pain points. So USDC is a fully backed stablecoin one to one with the dollar. It is powered by an open architecture call center within open and transparent governance model membership. There will be many issuers. We're operating under money transmission laws here in the US. So just overall increasing transparency into the StableCoins space will ultimately unlock the value of [ UNKNOWN ] Payments, and it will be listed as a primary market on Poloniex. And so, you are running Circle Invests which allows people to, I think, buy the markets, so to speak, in one click. Can you explain how that works? So, Circle Invests is our consumer investing product for a mass market audience. It is aimed to make it more accessable and straightforward for the everyday person to invest and learn about Crypto assets in the long run we soft launched about 3 months ago and since then we have been slowly iterating and learning what consumers want and how they want to understand this information of what is Crypto assets why should i be putting my money into this space to begin with and in the meantime, we've added in new assets. We've added in z cash and really, By the Market was the culmination of our hard launch so we hard launched about a few weeks ago By the market specifically is a very easy way for anyone to get invested in all seven coins that we offer in a market weighted fashion. So you used to own Trigger Finance. This was the start up that you founded the Circle acquired in the fall. What I think has triggered it was it allowed some kind of rules- based investing Or functionality for investors looking for maybe some guidance on when to trade. Do you think, will there be more functionality to circles offerings in the future that will help investors With when to buy and things like that? Absolutely, I mean, the mission and the vision of Trigger was to have a rules- based approach to investing, really removing the emotional aspect that consumers generally tend to have with money and with highly volatile and speculative currencies. First, removing that through automation, so simple, you know, conditional, automated trades that can happen based off of Either a price moving or a tweet or announcement, or you hitting a certain target threshold. The idea of rules- based crypto trading intrigues me. I know it's really days but What might some of the inputs be? I mean I know rules based with traditional investing might be the federal reserve does X, or Apple shares fall Y and a response kicks in. In the case of crypto what would be the kind of macro factors to trigger that? Yeah. That's super interesting. I mean a trigger we saw around 40 to 50 % of all triggers being created, and this was. Last year in 2017. Mostly right now they would be technical indicators so specifically all of the active trading type of audience they'll trigger on the Balochi sequences, moving day averages, volume. You could have the flipping trigger, you know, if therom surpasses BitCoin market cap etcetera And you know, because crypto is so news driven heavy, then you could also have, you know, tweet based triggers. If Italy is tweeting about something or parsing the SEC news announcement For an active trader that absolutely makes sense, to have a conditional approach to automation. Given the selloff that Jeff mentioned earlier, not just this week but since December, have you seen any trends in terms of the flows or interests from investors and wanting to buy the market? Maybe buying the dip so to speak? Yeah, I mean some of the trends on Circle Invest specifically, you do see them perhaps waiting a little bit to buy the dip, holding a little bit more reserves in dollars. They generally tend to buy the market more, which is great, and that's the behavior that we want to incentivize too. More than buying individual cryptocurrencies? Yeah we want them to get exposure to all of them and this is a growing market. So really not picking or choosing but easily investing constantly throughout all of their life. We see it more as a stake in a movement rather a stake in a specific coin or what not but. really for them to have exposure and be emotionally invested into the industry as a whole as we continue to add in more assets into the platform .>> What you're talking about is really diversification which is something, you know, investors are always told to do in regards to the stock market or their traditional portfolio but does cryptocurrency offer that same sort of diversification? Don't these things kind of just move in tandem? I think it is still early days to understand most of these assets have been newly listed in less than two years, from a financial modeling prospective it is tough to say so what we are trying to do is have a more Thematic approach to investing, a more guided approach. To say this is a technology that's really gonna change the world and have more financial inclusion over the next 10 or 20 years. We're not really sure of which assets are gonna be the winning use cases at the end of the day. And so constantly invest, constantly have a portfolio, and buy the market. Rachel, before we wrap up, we were talking in the green room earlier about real world use cases of cryptocurrency, namely Venezuela. Right now. An issue you're passionate about. Do you wanna tell us a little bit about why you're so intense or so focused on Venezuela and crypto right now? Yeah, I think being in the US and being in crypto, we often forget about the real use cases, and we dive down into the nitty gritty, but it's happening live before our eyes. So Venezuelans are actually leverage some of the subsidized electricity that's powered by the government to actually mine these coins. Cuz it's their only means of actually attaining any sort of values internally. But are these payments on the ground? I know it's sort of like novelty for us. You might find one coffee shop in New York to use it, but are people using it as sort of means and exchange here? They're using it mostly as a store of value externally for goods and services, less so for day to day sort of coffee buying activities. That might start to happen. Right now even though the country is mostly illiterate, they still have Androids, they have smart phones, they have free electricity. And they've grown up in a digital age, and they're very resourceful. [ LAUGH ] [ LAUGH ] When it comes to skirting dictorial regimes. So I expect to see more and more use cases of actual economies surface with BitCoin. Well I think that's all we have time for today, but thank you so much, Rachel, for being here. Thank you so much for having me. I'm Jen [ UNKNOWN ]. And I'm Jeff Roberts. For more Balance and Ledger, please go to Fortune. com. We'll see you next time. [ MUSIC ]

Balancing The Ledger: The Crypto Market Slump, Making Cryptocurrencies More Accessible, and the Benefits of Rules-Based Investing

The_Ledger

Circle’s Rachel Mayer sits down with team Ledger to discuss the latest crypto and blockchain news.
