Skip to content
From The Forest

Rails, not religion.

· From The Forest

We don't want a stance on tokens. We do want payment rails that don't take three days, charge 3%, or require a meeting with a compliance team.

For a long time those two wants were hard to reconcile. Stablecoins fixed that.

Payment infrastructure

A previous post laid out how we see blockchain: an implementation detail, not a product. The same logic applies to payments. Blockchain payment rails are genuinely better than ACH on most axes — settlement in seconds, cents per transaction, programmable at the edge, globally available, open to anyone who wants to build on them. What they're not is a belief system. We want the latency, the cost, the programmability. We don't want the ideology that usually comes attached.

So we pick the piece of infrastructure that delivers those wins with the least ideological baggage: a fiat-backed stablecoin. Specifically, USDC.

We use USDC. Explicitly.

USDC is a tokenized US dollar. One USDC is redeemable for one USD, backed by cash and short-dated Treasuries held at regulated custodians, and publicly attested monthly. It settles on several blockchains in seconds for a fraction of a cent. It has no native value narrative — it is just a dollar that can move like an email.

In our products USDC and USD are the same number. When you see a $100 balance, it could be denominated in either and the math doesn't change. When we take payments, USDC and USD land in the same column in our books. When we pay you, we'll ask which rail you prefer — if you don't care, we'll pick the cheaper one. The unit is a dollar. The rail is an implementation detail.

You will never have to care about our plumbing to use our products. If you want your money by ACH, we'll send ACH. If you want it on-chain because you are building something that needs machine-speed settlement, we'll send USDC. Same dollars, different envelopes.

The risks are real — and familiar

We will say the quiet part out loud: USDC is not risk-free. In March 2023, $3.3B of Circle's reserves were stuck at Silicon Valley Bank when SVB failed over a weekend. USDC briefly depegged — trading as low as $0.87 — until federal regulators stepped in and made depositors whole. That was scary, it was a real failure mode, and we are not pretending otherwise.

But look at why it failed. USDC depegged because the bank holding its reserves had a run. That is a fiat-banking risk, not a crypto risk. The same weekend, every US business with more than $250K at SVB was staring down the same cliff; the FDIC's intervention saved them too. If you held your cash in a checking account at SVB that Friday, you lived through the exact same story.

All fiat has this problem. Every dollar you hold that is not paper currency is a liability on somebody's balance sheet — a bank, a money-market fund, a custodian. That chain of custody can fail. It has failed, including in 2008 and 2023. USDC does not invent this risk — it just makes the collateral legible enough that people notice it.

We're comfortable with that trade-off. Transparent custody with public attestations is, to us, better than opaque custody with an FDIC sticker — especially when the FDIC backstop is capped at $250K per account and most business deposits sit well above that line.

The boring version

  • Customers can pay in USD or USDC. Whichever is easier.
  • Payouts can go out as either. Whichever is cheaper or more useful to the recipient.
  • Our internal ledger treats them as the same unit.
  • We will never ask you to buy a token from us. Not USDC, not anything. If you already have USDC, great. If you don't and want to pay that way, your bank or exchange will sort it out.

We picked one stablecoin. The choice is load-bearing in our payments stack and invisible to most users — that's the goal. Good plumbing doesn't announce itself.