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This is intersting.
Occasionally in YC founder circles a new founder will raise a bunch of money and then ask something like "What's the best way to invest all the money our company just raised?"
The responses are always along the lines of "Your startup is already risky. Don't innovate in areas of your business where the status quo is known to work. Innovate your product + technology, don't be innovative with your company's finances, HR, etc"
That advice always stuck with me. It just makes a lot of sense to do things in the most boring way possible, except where it matters (your competitive advantage <-- that's where you innovate, that's where you set yourself apart)
Running a startup is distracting enough. Doing things non-standard just adds to the list of distractions that you don't need as a founder.
YC, like most incubators, has always encouraged their companies to use products and services from other companies in their portfolio.
The simplest explanation is that this is a mostly symbolic move: They want to show that the stable coin and crypto companies they invest in are actually trusted by YC. It starts to look hypocritical if an investor is funding crypto companies and praising them as important breakthroughs, but not actually using them where it’s important.
> YC, like most incubators, has always encouraged their companies to use products and services from other companies in their portfolio.
Advising unproven risky businesses to depend on other unproven risky businesses? Doesn’t that just increase the likelihood that something goes wrong?
> Advising unproven risky businesses to depend on other unproven risky businesses?
Read carefully: They’re not actually advising that startups prefer it. They’re allowing it as an option.
It doesn’t mean that it will actually be used. They just don’t want to appear like they’re avoiding the companies they’re funding. It’s a bad look.
I think you are confused. I don’t care about the announcement, I’m specifically addressing a point from my parent comment, which I quoted. Again, this time with emphasis:
> YC, like most incubators, has always encouraged (…)
“Encouraging” means advising, advocating for, not “allowing as an option”. I don’t know if YC really does that, but that’s the conversation. It’s about the claim made in a comment, not the submission.
Re-read what I wrote: The "encouraged" was about past use of other products, to provide context. I wasn't claiming they encouraged the use of stablecoins. I was adding historical context to the move.
> The "encouraged" was about past use of other products, to provide context.
Yes, I understood that perfectly.
> I wasn't claiming they encouraged the use of stablecoins.
Neither have I claimed you did.
> I was adding historical context to the move.
Yes, I know. All my answers are congruent with that.
Does anyone remember being voluntold to use Skiff for email and calendar, instead of a product that actually handles timezones in event invites?
I'm convinced the point of YC must be something other than launching successful businesses
I mean it’s obvious that successful businesses are only a side effect of what the point is - a successful exit. And if one big success can be strongarmed to help other ventures exit successfully, they’ll do it.
Why wouldn’t they?
This is why we can't have nice things.
Would you consider it risky for a startup to use its own product?
I would consider that a risk decreaser, because the loop creates a stronger fit signal.
Even more powerful, since across a cohort the encouragement is N-way, or really N^2-way, it actually lowers risk on average the more startups act as each others’ early customers.
And co-adopters benefit from getting unusually responsive suppliers with a strong indirect stake in mutual success.
Encourage isnt a requirement. Adopt only if it makes sense.
From the POV of YC, they don't mind too much if it is a bit risky for any given individual company if it increases the legitimacy and stability of their portfolio as a whole.
The already 99.9% likelihood?
YC, like most incubators, has always encouraged their companies to use products and services from other companies in their portfolio.
Are you saying founders don't mount an FTP account using curlftpfs and access it using SVN?
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But what advantages do stablecoins have?
Seigniorage accrues to private entities instead of the state, enriching the owners of those private entities rather than everyone in the state that issues the currency.
Faster and cheaper transactions that don't get locked up by the whims of a bureaucracy. They continue to operate on non-business days.
That’s also a downside: When your funds can be transferred away by anyone who happens to acquire the key without triggering any fraud prevention or additional verification checks, losing your entire bank account at 4AM Sunday morning becomes much easier.
This is why people who happen to own significant amount of crypto typically get hardware wallets
That would make it a single point of failure, no? Not a good idea if your company is riding on it.
multisig exists
Cryptocurrency recapitulates the history of the modern banking system, and illustrates the necessity of regulation on a daily basis.
We only get better wheels by reinventing them.
Our knowledge is constantly expanding, allowing us to build things differently than we used to. Modern cryptography, which makes things like multi-sig possible, is only a few decades old; it didn't even exist when the current banking industry was being established.
Yes, let's go back to hiding cash and gold under our beds. Maybe buy a machine gun so you can defend it from home intruders.
> Yes, let's go back to hiding [...] gold under our beds
The people that did exactly that never had to worry about (hyper)inflation...
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The currency is never the only asset or unit of trade in an economy. As long as value and wealth were being created somewhere, inflation can exist.
Gold is interesting because more of it was being mined and produced all the time. There wasn’t even a finite amount of gold.
Thinking that a gold standard means no inflation (or in practical terms, deflation as the population grows) is a modern fantasy.
In addition to the security issues, they would have to deal with non-negligible transaction costs every time they wanted to convert it to actual money so that they could purchase something. If they were using it as an investment, they had to deal with the opportunity cost of underperforming $SPY.
Still, they have to worry about them and their family not being kidnapped.
Oh but hey, checkmate, burglar who is threatening to cut my daughter’s finger, my wallet is multisig !
It really comes down to the burglar's expectations. If most crypto holders used geographically separated multi-sig, these attacks wouldn't be worth the effort anymore.
It’s the same logic as iPhones bricking themselves after being stolen. Even if your specific phone isn't an iPhone, the fact that most phones are now useless to thieves discourages the crime across the board.
Doesn’t that mean a home invader can break in, torture you a bit and walk off with your millions?
I think there was a rash of this kind of this kind of wrench cryptocurrency robberies in the Netherlands a few years ago.
Break in, bash owner about with a wrench, get coins. <Insert xkcd>
Yep, the meme in crypto community is that you can have all the digital security possible but it'll lose to the $5 wrench attack.
This isn’t just a problem in the Netherlands or a thing of the past. 2025 actually saw the highest number of attacks ever recorded [0].
There are ways to prevent this. Like using multi-sig with geographical separation (so you can't move funds alone) or setting up forced time-delays. Ultimately, being your own bank is a massive responsibility, and I think too many people take that reality too lightly.
xkcd 538, that is
[flagged]
I bet you can. And I bet that raising the limit takes you a few minutes at most. Or you need a better bank.
> Or you need a better bank.
There are no good banks in Canada.
Why do you have a bank? Don’t you use crypto for all your needs? Or does crypto fail you in that?
No one actually accepts crypto
If your bank doesn't want to raise the limits, there's probably good reasons behind that.
No, there's not. There are rarely good reasons behind what banks do because these are organizations that are run by mediocre people who are not incentivized to not suck. They don't care at all about anything. This "fraud prevention" thing only gets in my way and doesn't prevent the less sophisticated people from sending their money to India.
I get money
You get mad because the bank's shut
> If your bank doesn't want to raise the limits, there's probably good reasons behind that.
Why would their having reasons make me feel better when my payments don't go through? We complain when Apple plays nanny and makes their product a walled garden. How is a bank different? They should be doing their job without causing inconvenience for me.
Unnecessary rudeness.
Strong language used for emphasis. I apologize if anyone was offended.
It's also a lie, you can pay for many things without raising limits.
Why does the bank decide what I can pay for? That's bullshit.
What limit are we talking about though? Credit or debit?
Debit I'd agree would suck because it is your money. Credit cards on the kther hand is you lending mkney from the bank.
They both have limits. I tried to buy socks via Apple Pay and it declined.
Because you put your money there and agreed to their rules.
It typically doesn't, it just implements compliance with laws and regulations in your jurisdiction.
Withdrawal and transaction limits are commonly such a thing, politicians get hounded because some people were frauded out of their monies and they feel a need to show that they're doing something about it.
Banking is very international, you can put your money in some other jurisdiction if you'd like to. Many transnational banks are connected to the usual payment providers, you can probably figure something out if you put your mind to it. One way to do it is to start a company, business accounts at banks generally have different limits and then you pay a lawyer or bean counter to clear how to do the books and pay appropriate taxes.
I can only really use Canadian banks because that's what Interac, Canadian system for sending money by email works with. The bank does decide what I can pay for because it limits the amount of money I can spend via Apple Pay (like $500), and in general (like $1000). You need to bring your physical card and call them to temporarily increase the limit to buy anything expensive.
Yeah all of that sounds way more convenient than your grandma irrecoverably losing her life savings because somebody kid fished her for her crypto authentication.
People still lose all their life savings. Look up pig butchering.
Web searching a bit seems to say that e.g. tourists can use their foreign issued cards and typically carry their issuers' limits with them, unless the merchant has their own limits for some reason.
Putting stricter limits on intermediate devices like pocket computers doesn't seem very tyrannical to me. Interac's web site says the typical default limit would be 2-3000 CAD, i.e. 12-1800 euros or so, unless you have a small business account, then it's more like 25000 CAD.
If you often find yourself spending thousands of CAD on a whim, perhaps it would be a good idea to open accounts with a bank that is tailored to people with a lot of money. I'm sure there are some available in Canada.
I'm not spending thousands of dollars on a whim, but I don't want to wait on hold for 40 minutes to spend thousands of dollars when I need to.
Is there some magic in redeeming them? And by redeeming I mean going to issuer and getting the face value in seconds?
You can redeem stablecoins in blocks of a million if you are a registered bank. This is the only way to redeem them. Otherwise you can only trade them.
At the end of the day, for better or worse, the US dollar is backed by the US military. Virtual coins are backed by the greater fool.
What a strange toss-up.
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Usdc is backed by US dollar denominated treasuries for most major issuers.
It's broadly agreed that hasn't been the case for a while now, but that at the moment it's better for everybody if we pretend it still is
Is there actually any proof of this or is it Tether-tier magic money?
But the stable coins are also backed by the US military. All major USD stablecoins have sanctions mechanisms baked into their smart contract.
See for yourself the blacklist features
https://github.com/circlefin/stablecoin-evm/tree/master/scri...
> US dollar is backed by the US military.
No, it's not. It's not possible to come to the US soldiers with a bunch of US dollars and some demands and get what's demanded in return for the dollars.
Only trust of the other market participants backs the US dollar.
It's the other way around. If you don't trade in dollars, the military comes and demands that you do.
Is the peso backed by the Mexican government? Because I'm afraid of all these militaries coming and knocking down my door to use their money.
> Why do stablecoins exist at all?
For states:
They quietly inflate the money supply by forking fiat, achieving monetary base expansion without the political cost of explicit money creation
For issuers:
They convert user deposits into a private mint: risk-free interest on collateralized reserves, with none of the upside shared with holders
For users:
For everyone but the unbanked & criminals, stablecoins are strictly inferior money surrogate: no yield, no guarantees, and no recourse
I don’t think that matters.
It’s a sign of commitment to something they’ve invested in as OPs says.
It's been like 3 years since Silicon Valley Bank got a bailout because a bunch of startups put their money in a bank that wasn't guarded against economist instability.
Like a pyramid scheme?
> What's the best way to invest all the money our company just raised?
You should invest in some YC startups with your YC investment money.
Relevant question: How many YCombinator portfolio companies issue stable coins.
Stablecoin-adjacent YC companies:
• Bridge (acquired by Stripe for $1.1B) — stablecoin infrastructure, now offers "Open Issuance" platform for others to launch stablecoins
• PrimeVault (S2022) — helps enterprises issue & manage digital assets/stablecoins
• BlindPay (W2025) — stablecoin API for payments
• Coinbase (S2012) — issues USDC (with Circle)
I agree, if you just want to not "waste" the cash while it's sitting, keep it very simple with something like T bills or, if you don't need it immediately, maybe a total market fund.
This also makes sense from the investors point of view, they invested in your company to receive growth from your product/business, not from random stocks you bought with it.
That said, I think there is a distinction between trying to be innovative across the company (ex. Gitlab's open employee handbook, CEO shadows, etc.) which is arguably not a bad thing at all, and this specific case of trying to actively invest company funds. In some cases, a more innovative way of doing things may actually be simpler and less complex than the default way for bigger companies, it just depends on the exact scenario.
> if you don't need it immediately, maybe a total market fund
That strikes me as unwise. If there’s a sharp downturn in the total market, that’s precisely when you might need to call upon otherwise unneeded cash reserves.
Agreed. I would think placing it in something more conservative would be a better choice. Presumably the company will want those funds available.
It does seem ironic that a startup would immediately pivot to devoting some of its precious time and attention to becoming a hedge fund just as they've got the funding for their 'startup idea'. On the other hand, any big whack of cash should have an optimisation plan, lest it be wasted. Does YC provide templates?
Oversimplifying:
X = full amount of raised capital
Y = expected spend over 12 months
Z = $ value of percentage contingency for 12 months
Y+Z goes into use-it-however-and-whenever-you-want account (likely low to no interest)
X - (Y+Z) goes into a 12 month higher interest account, ideally staying untouched until maturity (stake the stablecoins in this context)
I'm skeptical of crpyto holding companies though, explicitly because of the lack of regulation. The likes of BlockFi, Celsius, and FTX gives me the cold sweats. Regulation in the US is notoriously lacking even in well established finance and banking, never mind the crypto 'industry' which was always high-percentage grifters, and now the Epstein files has added 'morally corrupt' tags to more of them.
Recipe for sleepless nights, which is already a problem for a startup founders isn't it?
Just a money market account or something (e.g. https://mercury.com/treasury ).
Also X=Y for almost all startups.
The point is, treasury accounts are not designed to manage crypto. So that's another layer of money management that startups have to deal with, when they could simply ignore it using a treasury account.
But of course, YC being YC will fund another startup which will help other startups manage their stablecoin portfolios...
Also note that in most jurisdictions, you cannot pay employees with crypto, stable coins or not. Nor can you pay suppliers. Or AWS/GCP/Azure.
This is literally a textbook example of, in YC's words, a solution in search of a problem.
Is there no treasury desk at YC that takes care of this for everyone?!
Seems sub optimal to drop millions into a founders bank account for couple of years runway.
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Not all stablecoins are intended as investments. For many it's just a way to send money internationally without dealing with the SWIFT system, waiting periods, banks losing payments etc.
I like your writing. Do you have a blog or publish anywhere else?
I second this motion
I third this motion
Yeah but after a series of Big Prints we finally managed to make an inflation spike, a run on Silicon Valley Bank, the US President openly contemplating dollar devaluation, "Sell America trade" working for the first time in 50 years, the marginal buyer of treasuries eliminating the last dove on the path to war, and precious metals whipping around like meme stocks. "Park the money in a USD money market at SVB" used to be not just OK, but universally agreed to be obviously OK, which had value of its own. Now it's just OK. Probably. I hope.
Will we see some pivots into bullshit crypto holding companies? Sure, but VC returns are notoriously lottery-ticket distributed and 0 is 0 however you get there. I'd hazard a bet that the number of otherwise-successful companies who die due to this policy rounds to 0, while the probability of an inflationary wrecking ball that wipes out an entire batch of otherwise promising startups in the absence of such a policy is... north of zero.
To be clear, I don't think this is due to a special property of crypto, just the flexibility to get away from USD in case of emergency.
EDIT: maybe 24/7 trading could be an argument. It would be a meme for the ages if a raft of startups survived because they were up hustling and grinding at 2AM when the boats hit the Taiwan Strait.
You’re describing an event that would wipe out the US economy and trying to protect against that with stable coins, or at least that’s the impression I’m getting.
If the US falls apart, your startup will too. No matter how well preserved your cash reserves are.
The US going to war or entering hyperinflation is probably at the bottom of most founders lists of existential worries. Not a risk to mitigate (it’s a risk you need to accept since there’s nothing you can do - worrying about it won’t help)
Also, worth mentioning that no one lost money with SVB’s collapse. One might argue it was an incredibly smart decision for YC to recommend people bank at SVB since if SVB goes under, virtually all LP’s and everyone in the VC community will go under too (too big to fail, so they won’t, or if they do, everyone else fails too — kind of like AWS us-east-1)
Nah, hedging war is a meme, but I labeled it as such.
Startups that wanted to treasury in BTC or GLD, were told no, and were vindicated in hindsight are not a meme. Startups that were force-fed 10% inflation and a collapsing bank aren't a meme. That happened.
You can complain that it's irrational to hedge against these things which have been happening an awful lot lately, but you aren't the one who gets to decide. If an enterprising alternative VC is peeling away good founders by being flexible on this point, YC's option is to compete or let the deals go.
It probably costs you more than 10% of your time to avoid the 10% inflation.
> kind of like AWS us-east-1
is this the right comparison? us-east-1 goes down a lot to an extent because everything goes down at the same time, rather than as a collective need to stay up. its one of the worst AWS regions if what you care about is stability and up time. too big to fail does not add extra up time guarantees to that region
No one might have lost their money with the collapse of the banks but with the large amount of new money printed, the value of each dollar will continue to erode.
Inflation and hyper-inflation can wipe out debts with future money that's cheaper more easily in some ways. I forget where I had read or learned more about this in other countries that had experienced it.
> the US President openly contemplating dollar devaluation
Why won’t the fed raise rates?
The fear is the loss of safe guards and independence of the Federal Reserve. Trump is actively trying to remove safe guards and independence that would allow the Federal Reserve to counteract anything like this. If for instance Trump wants to hold interest rates low regardless of what anyone is telling him, he wants that power[0][1].
The upcoming decision by the Supreme Court on case Trump v. Cook is about this very issue[2]
[0]: https://www.cnn.com/2026/01/29/economy/federal-reserve-indep...
[1]: https://www.pbs.org/newshour/nation/why-the-federal-reserves...
[2]: https://hls.harvard.edu/today/will-the-federal-reserve-remai...
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If they won’t raise rates for fear of losing independence it’s already over.
If Trump v. Cook is a loss for Trump, they won't be in fear of losing independence, as I understand it.
Which branch of government is the fed under?
Trump v Cook is not upcoming it has been argued already
Edited! Though it was suppose to be written as upcoming decision, as yes the case was argued already but not ruled on
Love your writing style!
Then again, to play devils advocate, doing all the other stuff in a new way might also help your company break out of the cycle that typically impacts startups. It may be that the other things you do apart from your product are what make it successful.
Figuring out a better way to ~~invest~~ speculate with your company's balance sheet is seriously unlikely to improve the trajectory of your company.
MicroStrategy?
It's about to collapse for the second time.
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I mean if you have a significant chunk of free cash sitting around there's almost no reason not to put a portion of it in 3-6 month Treasuries or something.
The return won't be much but it's better than letting the cash sit idle and evaporate due to inflation
In a competitive banking landscape the bank would do it for you, then just give you a competitive interest rate on your account. Is that not present in the US?
Uh, that's not "better".
If you have a huge chunk of change sitting around, you've raised too much or too early, and you've successfully diluted yourself for zero reason.
If you actually had a reason to raise a lot of money, you'd do with the money what you promised the investors (who gave you the money) you would.
I've raised before. I raised what I needed. Not a penny more because I didn't need the money.
Let’s see:
- 12 months runway - $100k/mo. burn rate - 4% APR
Gives you about $25k interest.
Seems worth it to me.
I too have raised before.
I'm not saying raising and then buying T-Bills is better than just raising less.
I'm saying if you find yourself with excess cash, you can't just un-raise. In that scenario, then short term T Bills are strictly better than cash.
The question is why you'd use money you raised for anything but the reason you raised it. You've probably raised a shit ton more than I have, but hear me out - when one raises, there's generally a timeline of fund deployment from the startup's UoF, right? That's how it was done in my case - we tell the investor what we need, why we need it, and when we need it, etc. And then if the investor agrees to invest, it's not just a lump sum sitting in the bank - a good amount of that money gets deployed to help the startup fulfill its mission.
I get that if you're running super lean and you've raised enough to run lean for a while and use cash when you need to, but at the same time why raise more than you have need for?
I've seen VC's who care a lot about understanding how their companies are going to spend the money. And other VC's who don't even ask the question, or accept generalities like "hiring, scaling" with equally loose timelines.
The latter group most commonly in the bay area.
>And other VC's who don't even ask the question, or accept generalities like "hiring, scaling" with equally loose timelines.
Which is crazy to me.
You write a check for a lot of money, and don't care how/when/where the money is spent? Or you accept bullshit vague answers?
That's not due diligence, that's deliberate ignorance.
>if you find yourself with excess cash, you can't just un-raise
I always thought a startup can return cash to investors as long as the payments or dispersements are proportional to the amount of stock owned.
Depends on the funding vehicle. If you're on a SAFE, and still a going concern, then I think returning investor funds would trigger a priced round and you'd end up converting at a (hopefully) high valuation
This comment really shows how far the SV VC culture still is from running profitable businesses with solid fundamentals. No surprise that I am hearing this on the same website where people come to act like hard-done-by factory workers whenever [incredibly bloated and dysfunctional FAANG] lays people off after facing the real-world financial realities.
For the love of God, no. Do not do that. The cycle begins when you take the money. How there are still people here that don’t get this, I don’t understand.
The purpose of VC’s were never to fund companies until they become profitable, it’s the find the “bigger fool”.
Occasionally it’s the public market…
https://medium.com/@Arakunrin/the-post-ipo-performance-of-y-...
Most often for successful exits, it’s to get acquired and shut down the original product with a “Our Amazing Journey” blog post.
That chart is telling about the durability of this business, but do we actually know the precise point at which YCombinator as an entity sold out?
For instance, I know Coinbase may be down -22% from the IPO price, but that doesn't mean YCombinator lost money nor made very little. If they, for instance, sold off during the first few days of the IPO they would have made out quite well.
There's also the whole question of how much money did YCombinator put in vs what they got out.
Without knowing this, about all the chart tells me is YCombinator is not a predicated on building exceedingly durable businesses, but it doesn't mean they lost money on any of these investments either.
YC isn’t the “bigger fool”, their business model is great for them. Of course they made money at IPO. They don’t care about durable businesses. More than likely they sold at IPO.
I realize, but that's my entire point: the durability of the business as represented by these valuations says nothing meaningful about YCombinator startups other than they aren't building alot of highly durable businesses.
Not once in mankind's history has any great product or feat been enhanced or achieved through the use of timesheets.
Don't get bogged down with that stuff.
"A marathon sounds like a really long way to run. Maybe if I simultaneously juggle it will distract me from how tired I am."
You've taken VC money at that point. Hate to say it, but doing that means you're voluntarily going into the cycle with no intent to break it.
Stablecoins make a lot of sense in countries like Argentina where the national currency is a shitcoin. But YC doesn't fund startups in Argentina. Stablecoins can also be used to pay remote employees but that should probably go through an employer of record so that people aren't paid under the table. This sounds like more crypto for the sake of crypto.
Argentina got there with huge tariffs and excessive spending. Good thing the US would never do crazy stuff like that, right? Also the US government is currently debasing USD to increase exports as well as instituting currency controls. There's lots of reasons to be concerned about relying on USD.
FYI, when people talk about stablecoins, they usually mean fiat-backed stablecoins, which are coins that are expected to maintain the same exchange rate against fiat currencies, and which is usually just USD. Some literally have 'USD' in their names.
> There's lots of reasons to be concerned about relying on USD.
So no, even if this statement is true it's irrelevant to this thread.
okay. you realize USDC can be swapped to other currencies in minutes? Do you think Y comb expects founders to just hold the USDC permanently?
Sure, you can swap a USD tethered stablecoin to another currency. You can also do that with USD itself. What is the value add of injecting an extra step by first converting your USD to stablecoin?
Dude, how are techbro fintech innovators going to buy Ferraris? Think of the adult children!
I've never raised money, but I'd imagine that's the expectation. Seems personally pretty insane to dump your company's runway into highly volatilr and purely speculative assets which might lose 10% in a single day.
Will never understand why the US is so fixated with exports and trade balance.
All major export economies (Italy, Germany, Japan, China) have clearly shown in the last decades that being an export economy is a major weakness.
Also, the elephant in the room: the real exports of US, which are services, are not included in the very same trade balance. How much money flows to US through services? From google and meta ads to Netflix subscriptions to financial services and payments, from Hollywood movies to Amazon's/Cloudflare's cloud services, etc, etc?
but stablecoins are usually pegged to the dollar, right?
I'm no fan of the current US administration, however I have questions about this.
What currency controls have been implemented? A cursory search turns up no results, though there is some speculation that capital controls could be coming, they never the less haven't materialized, at least in such a way that no credible news outlet has plainly stated it.
The debasing of the USD is again, a fear, and Trump is absolutely stoking the fire around it, but it hasn't actually happened, as far as I can tell.
If you have evidence of the contrary to either of these I'm quite curious to see it. I wouldn't put it past this administration in the slightest, but there is a difference between implementing them and talking about them and for correctness sake I want to understand.
This is one, at least technically. Though in practice I'm considering more like what you see in China, where they have very strict capital controls.
The Remittance tax has an enormous amount of exemption businesses (because no institution that is subject to the Bank Secrecy Act is subject to it, neither is cryptocurrency, which I find interesting) its functionally a tax on individuals that send money to their home countries, as once you work through all the exemptions its the only transfer function left.
While its deplorable, I thought something much more draconian was afoot
Argentina has debt in foreign denominated bonds though - the US (and UK, Japan, Canada, Australia, NZ, etc.) don't, only issuing bonds in their own currency, which makes a massive difference.
Not to say that Trump isn't wreaking economic havoc and madness, but the USD is resting on a far stronger base than somewhere like Argentina.
Right, it would make a lot of sense for international founders, except that YC already requires them to have a company in one of a few countries (US, Canada, Seychelles, maybe a couple more?) and thus would otherwise be receiving it in USD or possibly another stable currency and storing it in a bank account there.
The first wave of stablecoins isn't replacing fiat currency, but replacing money movement protocols.
Expect most teams to convert stablecoins once they receive it, but even then it's a cheap/fast money movement layer, especially globally. Even in US, cheaper and faster than wire.
On face I don't see why startups would oppose to paying people under the table unless they just have a dogmatic adherence to the law. Like anything, they are likely to do a cost/risk analysis, which could change wildly depending on the context of the remote employee.
I think people are maybe missing a key development with stable coins recently. They can be used by AI agents to pay for access to protected API endpoints or websites. The http 402 status endpoint is finally being utilised, years after it's creation. Ycombinator has a lot of AI based startups and they are given unlimited tokens.
All crypto/browser automation/bot detection companies are jumping on the bandwagon:
https://docs.cdp.coinbase.com/x402/core-concepts/http-402
https://docs.browserbase.com/integrations/x402/introduction
https://developer.mozilla.org/en-US/docs/Web/HTTP/Reference/...
https://docs.datadome.co/docs/monetize-policy
In a world without search engines, LLM chat bots will need to be held to account for the server resources they're using. Seems like a lot of companies are betting on them paying for access or acting as AI shopping agents.
Why the hell would you need a blockchain for automatic payments? Bots that performed financial transactions existed long before “crypto”.
The ordinary financial system is constrained by a lot of regulation and it won't let an AI open an account.
Good, KYC exists for a reason. Why does AI need to open an account, anyway? Just give it a debit card with a limit, not a whole new account and contract with a bank.
The limit of a debit card is the money in your account.
The bank would argue that an AI using your account on your behalf is fraud.
Those are much easier problems to solve, and surely already solved by some fintechs, than bringing cryptocurrencies to the minimum legal compliance and meeting performance requirements.
They don't intend to meet the legal compliance requirements. That's the reason for using cryptocurrencies — avoiding compliance.
My debit card has specific limits, far less than all my funds. There also exist pre-paid cards, ideal for things like this.
How unreasonable that I can’t make my computer pretend to be a fiduciary.
Those awful regulations won’t let me say the “computer ate my homework”. Imagine.
I fail to see the use case where it's useful. I understand how it works and what it might enable but typically I want to cherry pick my API because I trust the source and their pricing (as here we are covering only paid for services).
What situations do you imagine where one :
- changes frequently and/or covers a LOT of APIs
- requires little to no budget oversight
- requires little to no quality oversight
?
(On the small team that helped create x402)
To start, it's great for micropayments globally. There are examples where you want an API once and not again, and you don't want to create an account or link a credit card.
Cloudflare was one of our earliest partners, and they saw a critical need for it for web scraping by AI.
> great for micropayments globally
My personal Website supported WebMonetization (details https://webmonetization.org ) for more than 5 years already so no need to convince me about that, I agree. I also believe one could just as easily have a funding.md with an IBAN and structured communication to make the equivalent.
Anyway that's beside the point, what I still don't get is a use case without or without AI according to the constraints I listed before.
Training data for LLMs immediately springs to mind. They've had a free pass so far but there have been numerous threads on HN talking about server costs ramping up. People are creating zip bombs etc. to combat the LLM companies. Artists are not happy about content being ripped off.
If you consider that AI agents may end up autonomously designing, building and running SaaS-like products, or API microservices, it makes sense that they should be able to pay systems in stable coin. It allows them to operate without the restrictions put in place by traditional financial institutions. That's my futurist opinion.
Is there also an endpoint to get invoices for tax and accounting purposes?
Sir, this is a Wendy’s
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So they get unlimited tokens and how is that limiting their access and usage exactly? Who's paying the bills with real money?
The unlimited tokens thing is a sign that YC are expecting all their startups to integrate AI as a core part of their product. It seems like a natural progression for AI to start purchasing things autonomously. My bet is that YC also think this and are building tech that can do this with stable coin - "AI shopping" regimes.
YC are presumably paying for the usage with fiat.
Automatic payments for AI seems like a completely dangerous wormhole for hacks. In the line of smart contracts security but with the indetermination of AI.
Sounds like a camouflaged IQ test for the founders...
Or perhaps Y Combinator is great at funding startups, but incredibly bad with financial decision making.
In which case it is an IQ test for Y Combinator, which they have failed.
As with all things cryptocurrency, the goal is to bypass financial regulations and external scrutiny.
By putting it on a realtime auditable database available to the public?
A small amount of plausible deniability while they can move to pocket someone in congress and elsewhere to make it fully legal.
Now it’s a congressional conspiracy?
How do you propose auditing an anonymous alphanumeric wallet address?
Too many trivial ways to list. Google can fine some for you.
Tumblers + monero are legal now so yes Google finds all, just not what you suggest;)
"Ask for forgiveness, not permission."
This isn't meant to be cynical. But, two of YC's success stories, Stripe and Coinbase, has a stable coin product.
Stablecoins have their uses. I'm not saying never touch crypto. But the question is what is the point of stablecoins in VC funding specifically? People don't seem to have good answers.
YC companies are constantly spending the money they get from YC right? Why get money, then put it in some stablecoin, only to then immediately cash out on salaries or whatever?
How does that make any sense to the company? Who's out here wanting their salary in stablecoin? And who among those want that and can't receive dollars and then turn them into stablecoin?
There's a sliver of talent that won't have access to the US banking system, but I can't imagine that making it worth putting up with risk + txn costs of stablecoins for the whole company.
This only makes sense to YC, to try and prop up interest in digital assets they heavily inveterate in.
The majority of humans are losing interest in digital ephemera South Park-WoW guys are desperate sell them on, otherwise South Park-WoW guy might have to work to live not just shill hallucinations like a priest.
Two of the fastest growing YC companies are crypto companies built on solana, Kalshi and Axiom. I'm pretty sure Axiom was the fastest to $100m in revenue, ever.
Making money doesn't make your thing not a scam.
One of the biggest YC success story is Coinbase. It has literally got "coin" in its name.
It also trades under the ticker "COIN": https://finance.yahoo.com/quote/COIN/
And after a serious beating it's still value at $48 billion.
Put it another way: of all the companies YC funded, both those who succeeded and the countless who failed, only two companies, AirBnB and Doordash, are valued more than Coinbase.
I don't think YC hates cryptocurrencies as much as the typical commenter on HN.
If you rejected economic orthodoxy and bought Bitcoin/Gold over the last.... decade or so... you won over the economic orthodox believers.
I don't really care about short term gold gambling with ~1-2 year market spans or altcoins if you want to disagree.
The biggest threat to bitcoin and gold is something breaking their scarcity. Gold, nuclear chemistry. Bitcoin... quantum computing or something(ignoring rollback).
Bitcoin is completely removed from fundamentals and if there's a major sentiment shift it will be race to the bottom to sell first or lose more money.
Indisputable evidence that YC loves smelling its own farts. Pure absurdity. America truly is reaping what it’s sowing.
I hope we aren't too close to "territorial currencies" where each feudal lord was authorized (or not forbidden) to mint his own currency, which couldn't be carried over the next feud. Think awarded "miles" by your credit card, or tickets in a games center.
https://ndl.ethernet.edu.et/bitstream/123456789/41452/1/112....
During the Free Banking era of US history (from when Andrew Jackson killed the 2nd National Bank until the Civil War, roughly 1837-1863) essentially every company that could get their state to give them a bank charter (very very poorly regulated) could issue its own paper notes that were treated as currency, with the very poor state regulation alone responsible for ensuring that they didn't print more notes than they had specie to back up.
You'll never guess, but most banks didn't actually have enough specie to back their notes, and banks constantly failed during the Free Banking era. If a bank failed then the notes value went to zero, and so notes always traded at a discount to their face value, and there were even brokers who were paid by local merchants to give them the latest correct discount rates for all the local banks (updating daily), and if a bank note got far enough away from the bank that the local broker didn't know about it, well, then it wouldn't be accepted by a local merchant. So effectively a similar result here in the capitalist, non-aristocratic US for about 15 years.
This is an enormous amount of overhead in actually running an economy, which was why it was ended and we had the National Banking Acts of 1863 and 1864 to try to create a more uniform currency, and the Bureau of Engraving and Printing created in 1862, etc. Because the actual businesses started to demand simpler accounting, and so more financial regulation of the banks.
> You'll never guess, but most banks didn't actually have enough specie to back their notes, and banks constantly failed during the Free Banking era. If a bank failed then the notes value went to zero, and so notes always traded at a discount to their face value, and there were even brokers who were paid by local merchants to give them the latest correct discount rates for all the local banks (updating daily), and if a bank note got far enough away from the bank that the local broker didn't know about it, well, then it wouldn't be accepted by a local merchant.
That sounds like a libertarian paradise. Sign us all up!
I don't see how this relates to that.
Ironically enough though, could feudal currencies actually be better on a blockchain? Think shares in a business. Bitcoin is backed by nothing, but if businesses all trade on Ethereum–style L2s, you could lock in whatever you want. Think: I want 2 tonnes of lumber for my new house build so I will trade whatever for 20000 $HomeDepotLMBR and it entitles me to exactly that amount when I go into the store.
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You know what else entitles you to two tons of lumber? Cash in the amount of two tons of lumber. That transaction even goes into a database for the business reporting.
That relies on a third party to maintain the value of the currency. Maybe I'd prefer to minimise my dependence on third parties. The crypto ecosystem makes it much easier to trade six cows for two tons of lumber and offload all of the exchange risk to speculators. It still can't enforce the physical exchange of goods, but it can atomically negotiate a swap from anything to anything through as many intermediaries as required. With a suitable transaction fee — which may come out of the transaction inputs.
A cryptocurrency system can negotiate that my six cow NFTs (which are not jpegs, I guarantee they are exchangeable for cows) for two Ethereum, of which 0.05 is taken as a fee and 1.95 flows on to Uniswap to buy Home Depot coin which buys two tonnes of lumber at a specific location and time. Except oh dear — Home Depot only trades on Polygon. Well then my 1.95 ether is bridged to Polygon where my 1.94 wrapped ether is traded for 9999999 POL and then for Home Depot coins. Or I buy wrapped Home Depot coins atomically on Ethereum and then unwrap them back to Polygon.
Crucially it all happens automatically.
That infra doesn't exist since cows and lumber aren't being traded on a blockchain, but it's the kind of thing that could be enabled.
Since I only hold ETH, WETH and POL during the transaction, their absolute value doesn't matter.
You just replaced one currency with at least three and who knows whether it's a company-store type situation or rugpull where suddenly the currency has zero value.
Company towns, company money
Epstein was kicking around that idea in some of his newly released emails
If they aren’t a crypto startup where it’s normal to pay others in stable coins, what is the benefit?
Fast, cheap money movement globally (compared to wire or ACH in US).
At this phase, stablecoins are largely best for easy money movement, but the money ends up in fiat.
We are seeing some examples of teams using it for payouts, e.g., Gusto and Deel both support stablecoin payouts. Expect that to grow, but still very early days.
Axium (YC W25) hit $100M revenue in 4-5 months, making it the fastest YC company to that milestone. Startups like that are important to YC.
How do they use stablecoins?
Axiom's pitch is "Trade memecoins, perpetuals, and earn yield" [1] so presumably they've hired a load of cryptocurrency-loving developers, and are eager to pay them in cryptocurrency.
Of course, given that the grandparent said "If they aren’t a crypto startup" - Axiom clearly doesn't apply.
Circular funding / money flows
YC -> Circle -> Coinbase -> YC
Ohhhh... So that's why it's called Y combinator.
Hyping crypto and "stable" coins
Yup. That's it. Because people are realizing crypto isn't worth the effort to support malware authors, money launderers, and North Korea's nuclear program.
And if you didn't know that's what you're supporting with the hype train, well now you do. Those folks all love and greatly benefit from difficult to audit financial instruments.
Relevant question: How many YCombinator portfolio companies issue stable coins. Stablecoin-adjacent YC companies:
• Bridge (acquired by Stripe for $1.1B) — stablecoin infrastructure, now offers "Open Issuance" platform for others to launch stablecoins
• PrimeVault (S2022) — helps enterprises issue & manage digital assets/stablecoins
• BlindPay (W2025) — stablecoin API for payments
• Coinbase (S2012) — issues USDC (with Circle)
YC may not expecting USD to be stable on it's own.
Isn't the whole point of stable coins to:
1. be pegged to the us dollar?
2. be created against a real usd equivalent? You get 1M in USD. You convert it to 1M USD stable coins. You invest the 1M in USD in t-bills at low yield, but still yield. The receiver of the stable coin can spend it as the "real" usd. The stable coin issuer profits on the t-bill yield.
I imagine the stablecoins they plan on distributing will be pegged to the USD.
Maybe they'll do a pot of stable currencies to protect against USD devaluation
Feels like step 1 to providing liqudity further down the toad. Also opening investment to “unqualified” investors. It never made sense that you could buy crypto, buy multiple homes, but sinking 10k into a friends startup was somehow regulated.
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This seems like a distraction for founders / new companies.
How many cool innovations does a given start-up really have? Wouldn't they be better off focusing on working on that innovation rather than what I'll call "creative funding" and worrying about crypto?
Founders can choose how to get paid, so this mostly feels like optics and support for YCs stablecoin bets. Most startups will just need to dump this into a bank to pay salaries and vendors.
Agreed, and I don't think that's a bad thing.
To start, think that stablecoins are great for money movement, even if fiat is used on both sides. For example, Bridge (now part of Stripe) started with a stablecoin sandwich, where the stablecoin was just the money movement piece and both source and destination were fiat. That was cheaper and faster than the other ways to move money.
So I get that stablecoins are less volatile than normal crypto, which makes them more acceptable as a currency for funding. But what is it about them that takes them from “acceptable” to “appealing”? Aren’t they basically just “USD but with extra steps”?
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They are not "less volatile"—they are tied to the course of the USD. They are easier and cheaper to use than real money, because the real money industry is retarded.
Payments suck only in the US. In Europe we have (often free) instant bank transfers from a lot of time.
I know right? And you also don't have to pay for a bank account. My checking account is negative because they keep charging me for having it, but I don't even use it, and I can't close it.
legacy banks often have fees. No cost banks are common though.
They're easier to accept but significantly harder to use
This makes so much sense, especially with the rise of crypto Payment Cards, although I like the idea of keeping things crypto-native (eventually!)
Next step will be to allow founders to capital raise on the blockchain but do it in a way where they don't dilute control even if they do dilute ownership. That could be achieved by having a large number of token buyers to prevent third-party ownership concentration. But could they merge into a voting block?
Surely this has been done before? Is there any way to make newly issued tokens equivalent to conventional equity so no rug-pulls? Are Decentralized Autonomous Organizations currently being used to this effect?
Imagine distributing a firm's revenues directly to shareholders in real-time. Everything stays on the blockchain. That's crazy!
> Imagine distributing a firm's revenues directly to shareholders in real-time.
1) You surely wouldn't want to distribute the revenue but the profit. 2) You still wouldn't want to distribute the profit in "real-time" (whatever that means exactly). Part of the profit usually gets re-invested or put in a reserve, and so the company leadership must actively make a decision how to use the profits vs. what part to distribute. You can't make those decisions on a continuous "real-time" (say, daily or weekly) basis, though. This needs analysis, planning, etc.
Related: metamask announced you can invest in shares via their extension yesterday. The tokens are ec20 versions pinned to the shares or something. Managed by a 3rd party though, and only available in the US.
https://metamask.io/news/metamask-adds-tokenized-us-stocks-e...
Binance moving in a similar direction. I was thinking more in the realm of early-stage private equity. I think Switzerland is in the process of allowing it but there are significant hurdles.
https://gemini.google.com/share/b06020007217 (see bottom)
A black market may arise for this sort of stuff. People won't want to be locked out of investing due to not being eligible due to lack of High Net-Worth status. Is that even validated on the blockchain? Maybe such investing could be classed as gambling in certain places.
YC's previous recommendation was to use Silicon Valley Bank. That ended well.
SVB depositors were mildly interrupted, no doubt, but there's little reason not to exercise extreme moral hazard in banking. OPM will bail you out via FDIC. Theoretically that has a limit but in practice FDIC usually will bail out the full balances even over the nominal limit.
If I had an FDIC account I would basically want a bank that invests my money in the most wildly hazardous ways with the most reckless financial controls to give the max returns and flexibility, then let everyone else bail me out if it went south.
“in practice FDIC usually will bail out the full balances even over the nominal limit”
That’s not true. It takes the systematic risk exemption and agreement between the fdic/fed reserve board and the president to make that happen. I think it’s happened like 4 times out of the thousands of bank bailouts that have happened.
There are other cases where the acquiring bank took on uninsured funds (like jpmc did for first republic) but in that case your gamble is that the other depositors on the banks balance sheet are desireable to the acquirer. Which presumably isn’t the case for your hypothetical max risk run bank.
But didn't it technically not even apply at the end of the day for SVB? They sold the bank to another bank, which is what usually happens, and that other bank assumed all its deposits and liabilities. The FDIC didn't have to pay out any deposits and thus the limit didn't come into play.
No. They got the exemption. The insurance fund was hit both for insured and uninsured deposits. The fdic then issued a special assessment to cover it.
Do all of us paid for bad risk management of the svb customers and the moral hazard is real, just not the default.
Go back to the SVB failure threads here and observe the freak out before the decision was made to reimburse deposits above FDIC limits. Sometimes you’re lucky, but luck is not effective risk management.
> OPM will bail you out via FDIC.
I'm waiting for the demands for a bailout when the next big stablecoin goes bust. Especially if it's Trump's.[1]
[1] https://finance.yahoo.com/news/trump-usd1-stablecoin-hits-5b...
What's the context here? When, where and for what did they recommend SVB?
(FWIW, it did end well, as going with a relatively large federally insured bank meant that no one lost any money during the crash)
SVB was considered the "standard" bank for all startups for decades so it's not surprising that YC would give the same advice. If you run a startup out of a normal bank sometimes you get weird glitches: https://mitchellh.com/writing/my-startup-banking-story
Of course today startups are probably using Mercury/Ramp/whatever.
I don't see any weird glitches there
chase did what they were asked for years
up to the point they were told there had fraud going on, at which point the walls went up
which is entirely as to be expected
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I hope that's not the defacto standard because if you're Australian, cashing out crypto is a taxable item seen as investment payout.
This is the case in the US as well, at least for individuals. One line in a tax form per stablecoin disposition, reporting a gain of $0…
Might help them win crypto deals. Or expand into shady geographies. Otherwise, I guess having a signal that your founders will donate the interest they’re owed is…something.
I look forward to them letting you collect your funds in the Metaverse in a few years
“Stablecoins is one of the key pillars for us,” Dalal said, referring to one of the areas where Y Combinator would like to see more startup ideas. “So we just want to live and breathe that as well.”
I asked ChatGPT for an honest translation:
“We’re actively trying to manufacture demand and legitimacy for stablecoins by forcing them into the startup supply chain.”
I guess this can make sense if the startup is doing crypto, otherwise it seems like financial friction. That said, I believe the entire crypto ecosystem is just a giant scam.
Beyond crypto teams, we're seeing increasing use cases for more teams to use stablecoins to pay. For example, both Gusto and Deel (YC teams) are using stablecoins to offer worldwide payouts.
Here's Gusto's CTO: https://x.com/edawerd/status/2018785968669815011
Interesting. International payments are one of the few use cases that somewhat align with cryptocurrency's underlying value proposition of censorship resistant currency.
Remember when YC funded (and boosted reach of) ~50 crypto scamlike co's during the heyday of the craze? Like the Stablegains scam fiasco:
https://news.ycombinator.com/item?id=31686140
50 crypto scams? Why do you link the same one thrice, then?
https://forum.effectivealtruism.org/posts/5mghcxCabxuaK4WTs/...
It's quite hilarious that you link to an EA forum to make your point when it's a known fact SBF was from the EA movement and they openly discussed --after the SBF/FTX/Alameda fraud was exposed-- whether scamming people to give part of the money they stole to fund things they thought would make EA participants look as white knight was acceptable or not.
The best example is SBF's guru who bought a 15 million GBP mansion in the UK for the EA movement with stolen funds.
Now he's keeping a very low profile because I know for a fact that up to a few years ago there was still assets being clawed back from the Enron fraud (!). So that mansion could be seized one day from the EA movement.
Let's steal money, let's buy private jets and fancy villas for our parents in tax heavens, let's give some to worthy cause (worthy in their own eyes).
Despicable people this EA movement.
And, no, I'm neither taking lessons nor explanations from what are, in the end, just petty scammers / thieves.
Despite still not really showing any utility these tech companies want so so so much for cryptocurrency to catch on.
It feels like the entirety of cryptocurrency, outside of being a thing people used to buy drugs, has been an example of Chesterton's Fence, with half of Silicon Valley in denial of this fact.
I think HN is just getting more old and conservative (lowercase c) and is not interested in new things in this area.
We have people in this thread praising KYC.
The pendulum has swung a little too far that way, for sure. But when the so-called "cryptocurrency" industry either have business models that are barely concealed ponzis/rugpulls, or run their own "cryptocurrencies" that are only marginally better than a centralised database, it's hard to blame the critics.
Satoshi Nakamoto must be rolling in his grave.
I agree, but that doesn’t make this comment correct.
A lot of us were victims of the FTX/Gemini Earn bullshit, where we were taken in by "stablecoins" and promises of safety only to have our stuff stolen.
You could say "bad apples" and fair enough, but even with that as a given, I haven't seen any utility out of cryptocurrency as a whole. I'm sure you can find to a nifty little tech demo for something, but I haven't seen any large adoption for cryptocurrency outside of a "greater fool" investment scheme or buying drugs.
Stablecoins are kind of a cute idea, but as I learned from the unregistered security scam from Gemini, they're basically just a farce.
VC market in America must be spiraling if YC feels necessary to tap into money exfil and laundering circles.
Average Ycombinator reader is now having a melt down.
Where are some of the Corporate Treasury with stablecoins challenges, opportunities, solutions?
Re: a similar question: "Small Businesses vs. Corporations: What Tech Tools Are We Missing?" https://news.ycombinator.com/item?id=42399253 :
> ERP / Accounting + Finance + Corporate Treasury integration (with ILP Interledger)
Scams all the way up. Scams all the way down.
Crime ring.
I vouch for that. The only reasons investing stable coins are taxes weren’t paid or source of the income somewhere btw drugs and child porn, or both. Good luck with these guys and their attitude.
Between this and Canada being dropped as an investable country shortly after the recent US/Canada fracas, I'm starting to wonder about YC's current political affiliations. Also, if you want to put your tinfoil hat on, Michael Seibel and Dalton Caldwell were publicly anti-Trump, and they both left months after the Trump admin took over, a very paranoid take is that the big shot VCs tied to YC made a push to "clean house" or "toe the line" and they were either gently pushed out or decided to leave because they didn't like the new vibes.
> Michael Seibel and Dalton Caldwell were publicly anti-Trump
Neither of these were "publicly anti-Trump" as much as Garry Tan has been.
Actually, where'd you even get that from? I cannot with my life imagine that Dalton would publicly post about politics. I've googled around a bit and found nothing either.
Michael specifically mentions in an older video with Dalton brainstorming things they could do about Trump. I don't recall ever seeing a YC video where Garry leaks any political affiliations, though I don't follow him on social media.
Which video was that? Garry has been an outspoken Trump-critic and moderate Democrat on Twitter.
Either way, my point is it's an extreme stretch to believe their departure, Trump, and crypto stablecoins are somehow related.
I don't recall the specific Dalton + Michael video, and it's not important enough for me to dig up, particularly if Garry is politically outspoken on social media. I'd prefer to believe YC is still a neutral player, but the amount of ring kissing from the big valley VCs makes suspicion rational.
Not endorsing conspiracy theories but one of the YC guys is an investor in flock, which is positioned to benefit from some of the recent political policies.
That's a very misleading way to say that Flock is a YC company [0]!
Where's the misleading part? What GP said is true:
Exploring the simplest version of this - I wonder if stablecoins are cheaper / easier to financially to transfer that much money.
Indirectly it might provide some more public visibility initally anyways.
I would do this and make sure to convert to a privacy coin like Monero the first chance I get. I get audited by the IRS every year, even when I was making minimum wage in college. I hate the regulators and making it as difficult as possible for them would feel like justice.
That being said, there are slim chances I would ever be selected as a YC founder. My ideas are more like ChatGPT, nobody would dare invest in them until after it's already released, then all of a sudden chatbot startups get trillions of dollars.
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How about receiving funds in coffee-shop vouchers and ramen?
Stablecoins work quiet fine as exchange medium for millions of people around the world, including myself, so they are different from vouchers and ramen.
This wasn’t a jab at stablecoins, just a startup joke, but in for a penny:
ramen is at least 1:1 backed by noodles, and doesn’t depeg.
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The headline writes itself. Y Combinator putting the crypto in the grift just like the famous combinator.
Why not in gold while we're at it?
Both are equally stupid, and you have to exchange them to buy most of the things you might need.
> Why not in gold while we're at it?
Crypto more hype-able
Answering this seriously.
Most goods today are denominated in fiat, so stablecoins are a better fit than gold.
And at this stage, stablecoins are great for easy money movement (rather than holding in crypto). I actually think most people won't even know that crypto rails have been used to move their money, with stablecoins like tcp/ip for money movement.
Why not a gold backed stable coin like PAXG?
YC connected people aren't as invested into gold as they are crypto.
I mean, asking for $500 in gold every paycheck would be kinda cool, or getting gold coinage each pay cycle on a rolling basis, as many coins as your repeated $500 contributions buy.
It'd be friction against spending, a little bit of investing, in the case of gold, but friction against spending with crypto only makes sense if you don't lose a lot on moving it into a real bank account.
You can do this, today, if you want, via an IRA or some 401(k)s.
Yeah but my 401(k) tax statement paperwork doesn't make me feel like a pirate.
If you want actual physical custody of gold you'll be paying a lot more than the alleged spot price; what you buy on the metals market is a certificate against gold held by a clearinghouse (which certificates are significantly oversold relative to their reserves, a topic goldbugs will do anything to avoid talking about).
Perth Mint runs click and collect for bullion bars (say 10 ounce) against the AU market spot price.
It costs more as I'd have to drive 250 km round trip to pick it up (or pay extra for transport).
> Yeah but my 401(k) tax statement paperwork doesn't make me feel like a pirate.
solo 401(k) is for you
Guess they want cryptobros, not gold bugs.
Why? Because the US stable coins are an abstraction on top of US treasuries. It's effectively trading in the US debt market, not trading in crypto-hype.
The Fed is interested in converting the debt to another medium, for obvious reasons. Stablecoin looks to be the leader, since a number of the new administration have talked about it in the last decade (re: Scott Besset stablecoin speech).
I can understand why some companies want their runway in a currency that may go up during a transition (a more favorable exchange rate). There's little lossage in the exchange of USDT/USDC in the short term. Seems like a hedge strategy.
> ... US stable coins are an abstraction on top of US treasuries...
Nope. Not until these companies allow an independent external audit. I don't take "trust me" from a crypto bro as proof of backing funds.
Oh, and the current administration is clearly corrupt, so this administration wanting to convert the US to bozo bucks isn't one for the plus column.
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> I don't take "trust me" from a crypto bro as proof of backing funds
This is a good distillation of the inherent issue going forward with crypto. The people in tech I trust _least_ (cryptobros) are selling in a service that I require the _highest_ level of trust (finance). It's a very bad sales pitch.
You don't buy stablecoins because you trust them. You buy them because a greater idiot will. For that reason, I wouldn't be particularly bothered about getting them instead of dollars, though I'd try not to hold on to them terribly long.
You buy bitcoin because you think there's a greater idiot. You buy stablecoins as a step in the path to buying bitcoin. You don't buy and hold stablecoins.
The why stands. If the Fed got involved in transitioning the currency, which seems MORE likely under this administration (because of the grift and corruption), then they will be negotiating with the stable coin providers and the grift will follow the normal trajectory to the moon or whatever. The arbitrary "not until some independent shows the paperwork" will never be on the table.
Independent audits aren't arbitrary. They're the standard by which you can tell whether an organization is lying about their finances. Double entry accounting and receipts makes it pretty difficult to fake especially when the claim is as simple as "don't worry, we hold the backing value in treasuries." Of course, the independent part has to be truly independent and not paid for by the audited. But they refuse independent audits.
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And how are you supposed to convert USD to USDC to local currency at par? The exchange fees end up eating any savings you got from not using the normie SWIFT network, and then at tax filing time you have to account for paying / being paid in specie instead of cash.
- USDC to local currency at par
I edited my comment above to provide answer. Swap whatever stable to PyUSD (negligible) and then send to your Solana address in Paypal. You can also hold crypto in US banks pretty soon.
This all makes sense... if a YC startup is going to spend the majority of its funding outside the US. I'm having trouble thinking of such a scenario though. I'd expect YC money to be spent on rent, founder salaries, and API calls.
> Transferring money across regions with the best 'normie' tools (eg Transferwise/wise.com) is multiple orders of magnitude more expensive than $0.0000015 (tranferring USDC or another GENIUS-compliant stablecoin on Solana).
I don't see how that's relevant to YC startups. Startups can't legally pay their employees in crypto through transfers, any more than they can write checks out of their bank account or pay their employees in cash. I've paid an overseas employee in BTC before, but we still had to go through a payroll provider and do everything above-board to satisfy IRS requirements.
I'm curious why you can't legally pay in crypto? I heard a few times about companies paying in crypto to their remote workers. In fact I heard that a US company was paying in BTC withing the US, though I'm not sure I trust this particular story. I also see that Deel accepts USDC, and to my understanding they convert to local currency of the remote worker. Is that all illegal? Truly want to understand.
It's not illegal, but you have to do all the paperwork the same as if you pay in USD. That means tax withholdings and all that, on a per-pay-period basis. Doing this basically means going through a payroll provider. When I had an employee we paid in BTC, we had to go through a licensed company to actually do the BTC payment to our overseas worker (Circle).
The way it worked was our payroll provider would release the paycheck in USD to Circle, who would do conversion to BTC at prevailing exchange rates same day before executing the transfer.
If we already had the money in BTC, we would have had to convert the money to USD to send to our payroll provider so they could do withholdings and all that, and then have Circle convert it back to make the transfer.
There are foreign transfer reporting requirements and rules about currency conversion at payment time so that you can't skirt paying taxes. If you try to do it yourself you're making a lot of extra work for yourself.
> Startups can't legally pay their employees in crypto
...
> It's not illegal
Why did you write that it was?
> you have to do all the paperwork the same as if you pay in USD
Yes. Obviously.
> Why did you write that it was?
You misread. You can't legally pay through transfers (between wallets). You need an intermediary that verifies identity linked to wallets and does escrow to satisfy anti-fraud requirements.
It's probably legal as long as you do all the same accounting/withholding that you would normally do. I suspect some companies are forgetting to do that, just as many people forget to report taxes on crypto.
Is it really illegal for US companies to pay their employees in cash or cheques?
It's not illegal to pay W-2 employees in US currency as long as you satisfy IRS withholding and reporting requirements. Paying employees in non-currency assets (gold, crypto, etc.) is highly regulated since it's often used as a tax-evasion scheme.
- ACH fees are pretty small, depends on the payroll provider of course, so USD ACH transfer to Wise is pretty much free
- I bet with whatever way I can convert the stable coin to my local currency (EUR), that it will be more expensive than Wise. Certainly Paypal is really expensive (as in SWIFT transfer would be better)
After ACH, which I’m assuming you got for free as you mentioned, US to Poland for 1000 USD on Wise is still 0.46% which is multiple orders of magnitude more expensive.
More expensive then what? The magic that converts USDC into Zloty?
> You can easily put stablecoins in a Lulo savings account and get 5% interest instead of 0.1% or whatever your bank provides. Yes Lulo has insurance.
From Lulo's site[1]: "Lulo’s yield comes from interest paid by traders and borrowers in integrated DeFi protocols. These loans are over-collateralized with assets like SOL, ETH, and BTC, reducing lender risk."
SOL, ETH and BTC as collateral? What if their value goes down? We know what happened when the banks made bad housing loans (2008 sub-prime mortgage crisis). At least the houses had some tangible value - bricks and mortars. Crypto seems like a fiat currency minus the "full faith and credit of the United States government".
> 1234.56 in PyUSD means you get 1234.56 in Chase or Wells Fargo or whatever. In future your bank will hold these assets directly without need to off-ramp at all.
If the appeal of PyUSD is that you can convert it into equivalent USD anytime, why do we need PyUSD at all? What's the value-add, apart from low transfer fees?
[1] https://lulo.fi
> SOL, ETH and BTC as collateral? What if their value goes down?
The lender provides the collateral. If when the value goes down, Lulo does a partial liquidation.
> What's the value-add, apart from low transfer fees?
High interest, with insurance. Mentioned in the comment you're replying to.
I don't know why I'd trust crypto companies with my company's money given the general lack of regulation; outrageous history of massive fraud, scams, security breaches and simply insiders running away with money; short history of these companies; lack of trusted deposit insurance; lack of reversibility; suspicious claims of guaranteed high "risk free" rates of return; and frankly, the general seediness of seemingly everyone involved.
I mean, for goodness sake, "normie"? Come on.
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It mentions it once.
More importantly, not only are those regulations not in effect, the final regulations haven't even been written or approved yet - which brings up certain questions about how a stablecoin could be compliant with them.
And of course, even if a US-based stablecoin is well regulated, it still doesn't make these foreign "savings" account companies offering guaranteed high rates of return is a safe place to park your money.
Everything about it feels scammy. The claim of compliance against non-existent regulations, too good to be true guaranteed high rates of return, companies set up in questionable jurisdictions and the emotional appeals of not being a sucker and fear of missing out? All that's missing is a suggestion that there's a limited time left to act.
> It mentions it once.
> > (tranferring USDC or another GENIUS-compliant stablecoin on Solana).
> > The Genius act regulates stablecoin provision. US-issued stablecoins are backed by government bonds with proof of reserves. USDC and PyUSD are compliant already, USAT exists because USDT isn't compliant.
No.
> More importantly, not only are those regulations not in effect, the final regulations haven't even been written or approved yet - which brings up certain questions about how a stablecoin could be compliant with them.
No. The GENIUS Act is in effect, it was signed on July 18, 2025, becoming Public Law No: 119-27.
> No. The GENIUS Act is in effect, it was signed on July 18, 2025, becoming Public Law No: 119-27.
The law itself isn't the regulations. The law authorizes and directs regulators to create the regulations.
Moreover, the GENIUS Act doesn't become effective until January 18, 2027 (18 months after it was passed) or 120 days after regulators issue final regulations, whichever is earlier.[1][2]
The regulations for it are still being developed across dozens of state and federal regulatory agencies. The only thing someone like Tether did was get an existing bank to issue it which is a basic requirement to qualify as stablecoin issuer at all.
[1] Pub. L. 119–27, § 20
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Markedly less than a few years ago
So there is a chance the situation is improving you think? I sure hope so.
Cookie-cutter "but crypto is a scam" comments are well deserved on HN.
Take it as someone who worked in crypto doing on chain analysis.
It's 99.999% scams, rug pulls, insider trading, ponzis, pump and dumps, and insiders stealing customer funds. It's a zero sum game because crypto does not increase productivity. Crypto is also one of the best ways to transfer wealth from the poor to the rich.
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