Both are equally stupid, and you have to exchange them to buy most of the things you might need.
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.
https://ndl.ethernet.edu.et/bitstream/123456789/41452/1/112....
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.
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.
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.
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.
https://forum.effectivealtruism.org/posts/5mghcxCabxuaK4WTs/...
(FWIW, it did end well, as going with a relatively large federally insured bank meant that no one lost any money during the crash)
Either way, my point is it's an extreme stretch to believe their departure, Trump, and crypto stablecoins are somehow related.
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.
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.
Of course today startups are probably using Mercury/Ramp/whatever.
That sounds like a libertarian paradise. Sign us all up!
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.
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.
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.
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...
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.
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.
Of course, given that the grandparent said "If they aren’t a crypto startup" - Axiom clearly doesn't apply.
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
Don't get bogged down with that stuff.
The return won't be much but it's better than letting the cash sit idle and evaporate due to inflation
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.
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 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)
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.
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.
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.
Indirectly it might provide some more public visibility initally anyways.
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.
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.
Why won’t the fed raise rates?
We have people in this thread praising KYC.
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...
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.
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.
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 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).
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.
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
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.
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.
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.
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.
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.
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.
> 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.
solo 401(k) is for you
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
- 12 months runway - $100k/mo. burn rate - 4% APR
Gives you about $25k interest.
Seems worth it to me.
Satoshi Nakamoto must be rolling in his grave.
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?
What a strange toss-up.
See for yourself the blacklist features
https://github.com/circlefin/stablecoin-evm/tree/master/scri...
It's an interesting point about currencies being backed by military force though. Given the recent technological advancements in drones and robotics, it makes me wonder if someone will launch a non-GENIUS-act-compliant cryptocurrency and then back it simply by military force.
[1] https://www.congress.gov/bill/119th-congress/senate-bill/158...
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?
Also X=Y for almost all startups.
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.
The latter group most commonly in the bay area.
It’s a sign of commitment to something they’ve invested in as OPs says.
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!
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.
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.
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.
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.
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
?
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.
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.
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)
Break in, bash owner about with a wrench, get coins. <Insert xkcd>
Are you saying founders don't mount an FTP account using curlftpfs and access it using SVN?
Advising unproven risky businesses to depend on other unproven risky businesses? Doesn’t that just increase the likelihood that something goes wrong?
• 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)
The people that did exactly that never had to worry about (hyper)inflation...
Oh but hey, checkmate, burglar who is threatening to cut my daughter’s finger, my wallet is multisig !
I'm convinced the point of YC must be something other than launching successful businesses
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.
It costs more as I'd have to drive 250 km round trip to pick it up (or pay extra for transport).
YC are presumably paying for the usage with fiat.
You should invest in some YC startups with your YC investment money.
Seems sub optimal to drop millions into a founders bank account for couple of years runway.
ramen is at least 1:1 backed by noodles, and doesn’t depeg.
The bank would argue that an AI using your account on your behalf is fraud.
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.
Those awful regulations won’t let me say the “computer ate my homework”. Imagine.
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.
Why wouldn’t they?
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.
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.
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?
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.
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.
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.
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.
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?
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.
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.
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.
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.
Here's Gusto's CTO: https://x.com/edawerd/status/2018785968669815011
Do all of us paid for bad risk management of the svb customers and the moral hazard is real, just not the default.
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.
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.
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.
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.
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.
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
> ERP / Accounting + Finance + Corporate Treasury integration (with ILP Interledger)
> 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.
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.