How Privy Is Fixing Crypto’s Onboarding Problem

Host Bam Azizi sits down with Henry Stern, co-founder of Privy, to unpack one of crypto’s biggest adoption problems: onboarding that still feels far too hard for everyday users. They explore why the assumption that users should “want crypto” is flawed, and how embedded wallets, seamless authentication, and invisible blockchain rails are changing the way products get built.

From Henry’s founder journey and the lessons behind building Privy, the conversation expands into where the market is heading now — stablecoins driving real usage, enterprises entering with practical use cases, regulatory momentum around the GENIUS Act, and what changed after Privy became part of Stripe. They also dive into the future of digital asset accounts, agentic wallets, AI-driven security, and the bigger question facing the industry: should crypto stay visible to users, or disappear completely into the background?

Connect with the Hosts & Guest

Bam Azizi: https://www.linkedin.com/in/bam-azizi-54117310a/

Henri Stern: https://www.linkedin.com/in/henri-stern/

About Stable Pulse

Stable Pulse is a fast-paced, news-driven podcast covering the most important developments shaping the stablecoin and digital asset ecosystem. Each episode dives into timely conversations with industry leaders, operators, and policymakers, offering sharp insights and real-world perspectives on where the market is heading. With a focus on clarity and relevance, Stable Pulse breaks down complex topics into accessible, actionable takeaways for anyone building in or exploring the future of finance.

Transcript

Intro

Intro 0:00

The passage of the stablecoin legislation drafted by the Senate, dubbed the Genius Act, because analysts say a wave of competition can complicate things. Stablecoin is your debut right here at the NASDAQ.

Bam Azizi 0:13

Welcome to CEO Beat from Stable Pulse. This is Bam Azizi. Today we are joined by Henry Stern, co-founder of Previe. Henry, welcome to the show. Thank you. Thank you for having me. Yeah. Henry and I, we go way back and uh we uh worked together uh uh like uh like for for many many years and excited to uh learn more and share some of those learning with the with the founders and audience that are listening today to the today's

From France To U.S. Tech Life

Bam Azizi 0:47

show. Uh but um uh let's go back a little bit to your childhood. I would love to uh hear your background and and the founder journey, if you don't mind, share some of the uh early achievements in your life, and then how did you end up in the US and uh doing what you're doing now?

Henri Stern 1:06

Yeah, I uh I can try. Um so I I grew up in France um for for the most part until I was uh uh in the in middle school and uh and basically moved to the US then. I think my parents uh were both lucky enough to work jobs that um enabled them to work from the US, and I think you know, very rightfully so. They were like, man, uh these children need to speak English if they're gonna have a shot at building careers in uh in the global workspace and the global workforce. Uh and so I think actually, oddly enough, I kind of lucked into many successions of being lucky with timing. In this case, my my parents were very lucky in bringing us to the US when I was a teenager. And so basically I went through end of middle school, high school, and then college uh in the US. And so even though uh my uh whole extended family is in France, and that's where I grew up, that's where I feel, you know, in many ways most at home uh professionally, I became very American. And likewise, I think through college, uh, you know, I had these very exciting dreams growing up of becoming a lawyer or banker or all of these things that like kids typically don't say this is what I want to be. And um and I think through college, I uh I started just seeing more and more on computers. I think I saw uh this is very geeky, and I don't know that I've shared this, but like I saw the social network, which had an impact of me on like, man, I software will eat the world, in fact. And no matter what I want to do, if I don't know how to speak to computers, then I will not be able to sort of be as highly leveraged as I'd like as a professional, regardless of profession. So I think that was the second lucky break, is I I started my my college at Stanford. I transferred to Columbia and it was a smaller computer science department where uh I really felt like I could build a lot of connections with professors and with um folks in the department. And so I ended up doing computer science, which is very lucky. And I remember at the time uh what I liked most about computers was determinism, which is to say, if you're doing something and the compiler doesn't compile, then you know it's your fault. You haven't understood the rules of the game. And uh, and unfortunately, we've moved to an era of non-determinism. So I'm I I guess my entire life plan has been foiled by AI now, where uh we're now in a non-deterministic computing computation era. But that's uh that's initially how I I got into computers. Started a company out of college with a really good friend of mine, went through YC. It didn't work, and then I went back to grad school and then I ended up studying uh cryptography and computer security, and that's how I got into crypto, which which led me here.

Bam Azizi 3:44

Nice. That's great. Um, so the fact that you didn't drop out of college, that's that's your French part. That's the immigrant mindset. You either needed a PhD or a doctor or lawyer. I'm sure your mom is proud of you now that you didn't drop out.

Henri Stern 3:59

Well, she she still doesn't understand what crypto is, so I I had to go and build privy because of it. But otherwise, um I I think you're right. I'm very very conformist in that in that standpoint.

Bam Azizi 4:08

So did you feel like you're always entrepreneurial? Um, like you you mentioned social network. When I watched that movie, it was like it was a dilemma for me. Should I be a scientist or should I go and run a business? Both are as exciting. Um, but did you feel like you're more on the entrepreneurial side and you want to build a business, or you were more of a nerd that you want to get a break codes and things, build things in the in the academia award?

Henri Stern 4:34

I think very much the latter. I I would say two things happened, which is one, I followed this friend of mine, and this friend of mine has since gone on to build uh a company called Row, which is a direct-to-consumer healthcare company that's very successful. And he was extraordinarily entrepreneurial minded. And we just wanted to work together. And so I think coming out of undergrad, I kind of stumbled into it and followed him. I remember we we we went to uh Columbia at office hours with YC partners, and we had office hours with Sam Altman, who was a YC partner at the time. And he was like, You guys are great, your idea sucks, but you should come and visit. And uh, and I was like, this is awesome. Like, what the hell is Y Combinator? Like, is there office Midtown or downtown New York? Like, where are we going? And then we ended up on the flight that same night to go to SF to pitch, you know, Paul Graham and the entire partnership. Um, but I really stumbled into that part of the world that that wasn't at all something that was in my in my sort of reference field of things that someone could do. And then I think starting that first company, which was called Shout, um I was kind of blown away by the fact that investors gave us money, by the fact that people took us seriously. I mean, we worked our asses off and we made so many mistakes. Uh, the company ended up, you know, shutting down after you, you know, we find product, we found product market fit for for a few months right there, and and then we never got it back and and we lived in in in in in hard search of that that feeling again. But um, but I think the fact that people took us so seriously and the fact that it felt like we were doing something that wouldn't happen without us ended up being the thing that really drove me to continuing to try to do this, which is uh I want to wake up and know that if I weren't doing what I'm doing, it wouldn't happen. And uh and that's kind of you know the the things that have driven me. And then obviously I think there's a lot of value we can build to into the world via digital assets, stable coins, crypto.

Why Silicon Valley Rewards Risk

Bam Azizi 6:24

Would you think you would be able to do the same thing in France or any other part of the US if you were not in Silicon Valley?

Henri Stern 6:31

I mean, I live in New York, so ostensibly, yes. I don't know what what how many other cities there are, but um I think Silicon Valley is really special. And whenever I go out west, there's kind of a sense of the pioneer spirit. You know, you you stand in the presidio and you look over, and I think you can kind of imagine people coming in during the gold rush. In fact, some of my mom, some of my mom's family uh uh came. My my my grandpa's grandpa was born in San Francisco during the gold rush because his family came over at that point. And so there's something I think really special to this idea of we can invent the future that I don't think exists anywhere else. And there's a ton I adore about France, but venture capital in France is called risk capital. Like the idea of failing is just very different. Um, and so I think there is something special here to the US and to this part of the US in particular that uniquely enables uh the sort of work that I'm doing, at least.

Bam Azizi 7:25

Yeah, there there is a willingness to take more risk here in the US than compared to other parts of the world.

Henri Stern 7:30

Um sometimes to fault, right? We we linize failure, we say keep at it, even if you're completely grinding your head against a wall. So like that there's pros and cons to everything, but it it's certainly very special.

Bam Azizi 7:40

That's that's true. Um as as they say, success is going from one failure to another without losing enthusiasm, right? So I think that's that's the mantra for US. Like they they keep betting and maybe they have like eight failures, but two out of ten becomes like the next meta, the next, next opening eye. That's um I really stumble upon on your your background, your story, because it's very, very similar to what I did. So like sim like like you, I have a PhD in computer science. I applied to I don't.

Henri Stern 8:12

I I did in fact not put your PhD out. So you're you're much you're much farther along than I have.

Bam Azizi 8:17

But but but uh you applied for Vice C. I did uh Sam Alfman interviewed me. I didn't get in, you got in, so that's good. And then uh my first company was an identity with no password. So that's where I got connected to um PKI, public key infrastructure and cryptography, and then Bitcoin like around 2016, 17. It was a bullish year, and then everybody was talking about Bitcoin. And uh it was exciting for a lot of people for from investment perspective. And then I've heard blockchain and I started digging deeper, try to break it. I got very, very excited about like how this decentralized technology works. I was more into the technology than the the Bitcoin as an investment asset. And then that's how I got connected, and then I started Mesh.

Privy’s Origin Story And Thesis

Bam Azizi 9:04

It seems like you you went through this similar journey, and then how did you end up building Previe? Like what what was the goal from day one?

Henri Stern 9:14

I think I came out, so I ended up after my my my master's um was going to join a PhD program and ended up thinking, man, these are very these are years where I want to be building things. And so let let me try and do research somewhere, but in industry. And I ended up joining an awesome company called Protocol Labs, where I worked on a layer one blockchain called Filecoin for a number of years. And I came out of that thinking these rails are so powerful. We have built a system through which disparate economic entities can reason about state and reason about the world together without having to coordinate ahead of time. So this is really ownership rails for the web. Unfortunately, the developer experience is like horrible. And it is so hard to build anything on these chains, and more or less, there's an assumption that like your user has to be religiously convicted about crypto if they're ever going to touch your product because your product is so goddamn bad. Uh and and I was like, this is part of why you kind of get this real draw to only certain use cases, uh, typically very highly speculative use cases. And I think there's nothing wrong with that at all. But it is only a subset of what you can build on these rails. And the reason why they have been the most popular is I think because the UX was so poor that you needed a real carrot to convince people to go through the experience of you know setting up a wallet, getting a mnemonic, like you will make a lot of money if you get through this absolute pain. And unfortunately, I think like there's a wide range of products that if we can lower the friction, we can then widen the aperture of what can find product market fit. And so I think that was the core idea was uh, I don't want to work in this space anymore. The products are too bad and people aren't building for users enough. And then kind of coming back to it of wait, what if we could make it easier for folks to do this? What if we could associate real people to wallets in a way that enables developers to focus on the users rather than get stuck in the in the public key cryptography of it all? And so can we take basically the infrastructure that allows anyone to get a wallet, no matter how conversant they are or not in crypto? And can we enable developers to build on top of crypto directly in their products without needing to be experts up front? And so that's kind of how we got started on the path to privy. I met my co-founder Asta through a mutual friend, and we immediately decided we should be working together. This is this is too exciting meeting broadly. Uh, and so we should do this together, and then uh and then you know, years of pain followed.

The Pivot That Unlocked Product Demand

Bam Azizi 11:44

Is there is there any um did you pivot at all? Or it was just from the get-go that like what you have and preview was on your mind, or you went through iterations and evolving through the years?

Henri Stern 11:57

No, we we evolved and we and we pivoted. Um we started so we started at the very end of 2021. And at the time, the the sort of idea maze was the same. And so we've been working in the same pace space the entire time. But the idea was um how do we associate real users to wallets in order to enable better experiences? And so the first version of Privy was a like privacy-preserving data store, kind of a Redis of sorts that encrypted user data so you could associate it to wallets without taking on that user's data. And basically what we saw was this was not a successful product. It was horribly hard to sell. It was like pulling teeth, and so we're like, well, fuck, like people really don't want to use this. Uh, but also the few people who did, just out of the kindness of their hearts, were using it to build some version of like poor man's account abstraction. They were basically using Privy V1 in a sense to store private keys associated to wallets so they could automate certain transactions and certain behaviors on behalf of users. So we had half of our you know, tiny user base at the time using it to associate email and phone numbers. And I think this was solving the issue of how do we authenticate and how do we identify uh users connecting and transacting on our app. And the other half were like storing private keys in order to try and like make some of the work transacting on-chain simpler. So that kind of gave us the roadmap for what ended up being our V2. So about, you know, we we we launched a product in January of 2022 or so. By July, it was very, very clear we needed to change something. And we relaunched it in September of 22 uh as uh at first uh an authentication. Sorry?

Bam Azizi 13:33

Best timing.

Henri Stern 13:35

Yeah, great timing. I mean, and and I actually think it was so so to your point, you know, somewhere in the middle there, the market completely blew up with FTX and with everything else. And so there was a real come to Jesus moment of like, you know, do we want to be here? Like, is this what we should be doing? Uh my my co-founder Asta is is much more uh uh talented and uh and employable than I am and was coming from from self-driving cars and AI. And so it was much harder for her, I'm sure, being like, what the fuck am I doing with this deadbeat? Uh, trying to work in crypto. But we both had a lot of conviction of if we can make these products easier to build, the amounts of things that you can build with digital assets. We didn't have words for stable coins at the time for crypto, um, is really, really expansive. And I think we got lucky in that basically we were very, very small at the time. And so we got to grow with the market as it rebirthed rather than being a really big player who got then hit by the FTX blowup. So I think a lot of the incumbents prior to us basically just had to deal with having really high valuations, running complex businesses in a market where the bottom fell out from under you. And instead, we got to be there, you know, like spring children coming of age with this market and growing with this market. Um, and so in that sense, uh, even though we didn't know it at the time, the the the timing was very good. I agreed.

Bam Azizi 14:51

Uh you you mentioned that you built this because your mom doesn't know anything about crypto. So where where the friction is uh usually come from? Is it is it the wallet, is it the identity, is the is the seat phrase, is the user experience or all the above? Like what what's what's the answer?

Henri Stern 15:08

Yeah, I think I think there's a few things. And and this is where, to be honest, um there's a there's a there's a piece of writing that I really, really love called um on market annealing. And I might misspeak, but I think it was written by Martin Casado at A16Z about like getting to call it 10 million ARR in very early stage markets. And uh it speaks to the fact that like product market fit in a nascent emergent market is a bad term because there's no market to fit the product to. The best you can try and do, and a very powerful thing you can try and do, is anneal the market and the product, meaning you heat them at the same temperature so you can evolve the market with your product. And I think that is kind of what we saw, which is um when we started, the idea of logging into DAP with an email was insane. The idea that anybody outside of crypto would want to use crypto rails was insane. And so it was very hard to convince people of that. But the friction was twofold. It was, or it was threefold. It was one, the act of downloading an app, a third-party extension, um, having to basically have a multi-product experience. So at each of the most important steps of the user experience, the developer building uh on crypto rails had to basically kick their users out and say, uh please go elsewhere to do this really important thing. I'll see you later, maybe. Um, and so that just completely crushed conversion and user flows. And so dApps were, as a result, often very poor and extremely financial in nature because you didn't have long-lived states. The second point of friction was the actual act of uh setting up the wallet. You know, you had to store it in mnemonic, you had to go through all sorts of things, set a password. Typically, you tried to, you know, tap through it really, really quickly, and then the wallet became valuable and you'd forgotten everything that you'd store. You obviously hadn't saved your seat phrase and so on and so forth. Um, and then I think the third was you kept getting reminded that you were in this weird product state everywhere in the product experience. So every transaction is yet another distraction taking you away from the app experience, kind of like being in a really good movie and your neighbor in the theater keeps coughing or something at all the best parts. Uh and so I I think beneath all of this was was sort of the core friction, which was this belief that in order to use crypto, you had to want to use crypto, as opposed to treating it like an extremely powerful rail, an extremely sort of, I think, morally valent rail, but one that can exist in the fabric of the products that serve it rather than being the main show itself.

Who Uses Privy And Why

Bam Azizi 17:36

Makes sense. Um and what was the initial use case and how this use case evolved? Like what type of companies are using previe in the V1 and now like who are using Preview now?

Henri Stern 17:48

Yeah, actually, we have an old strategy doc. We worked with uh with this this really talented person called Ben Beige who had helped us think through this. And the the the the the the goal at the time was to say there's probably like three markets in crypto. There's the this is you know, College Circuit 2022, there's the hardcore crypto natives who will never use a third-party platform for for these things and and basically uh for whom the market is currently built. There is a small but growing, we believe, category of crypto developers who want to widen their TAM and address a currently non-existent market, which is people who are excited about experiences to be built on crypto rails, even if they're not already using crypto. And then I think the third was, and there will increasingly be folks who have nothing to do with crypto who want to leverage the Rails because the Rails are really good at certain things. And like at the time we're like, that market you know doesn't exist. It's it's a dream. And so like we'll we'll come back to it. But clearly the only place where we have something really concrete and valuable to deliver is in the second market. Who are the crypto developers who want to appeal to a non-crypto audience? So that was our initial market. It was basically people who wanted to build better games, who wanted to build better social looks uh apps, who wanted to build so on. And we got very lucky. We served a customer called FriendTech somewhat early on that completely blew up and so scaled our product massively. Um, our product was well built, and so it managed to scale with this app. And basically, very quickly, we saw, oh, we can we can grow here and then we can grow into DeFi and then increasingly we can grow into stable coins. And what has materialized over time is that today our audience is really split between, on the one side, very crypto native audiences. So, you know, we serve the folks uh uh from Hyperliquid, folks like Jupyter or Uniswap or a lot of these applications that are you know very crypto native but are building some of the fundamental infrastructure in the space. And likewise, we serve uh really amazing customers like Ramp or like Deal or like uh you know Klarna. And these are apps that benefit from crypto as in other Rails, but aren't fundamentally crypto apps per se. And uh and I think today that's what we found very, very powerful is serving both sides of the market so we can deliver better abstractions for people who aren't here to think about the RPC methods, the gas and so on and so forth, and at the same time deliver extremely powerful low-level infrastructure for the folks who know exactly what they're doing and how they want to do it. And we think there's a a really virtuous loop basically serving both customer segments.

Stablecoins Rise With Regulation

Bam Azizi 20:23

Makes sense. Do you think stable coins, the market trend on that end, plus the regulatory clarity, uh like the Genius Act, uh opened a flat gate for uh crypto in general and preview? Did you see any changes in terms of like uh value being stored? Was mostly Bitcoin and Ethereum and Dogecoin now is more USDC, USD. Do you see those type of trends in inside Preview?

Henri Stern 20:54

We do. I mean, I think we've been very lucky. And I'm curious, I'm curious. I'll flip the question on you after, so get ready. But I'm I'm I'm very curious about what you're seeing. I think we are seeing basically a broad acceleration of the market that we serve and a diversification of the market that we serve. I think concentration risk was always something that we thought a lot about with the users we were we were working with. And I think increasingly, like to your point, the share of stable coins held uh on infrastructure is just much higher than it used to be. It used to be mostly non-stable assets, investment, trading, social, gaming, uh, NFTs. And now there's an increasing segment of uh stable coins and other tokenized assets related to real world markets and so on and so forth. So uh we're seeing a much broader diversification. We're seeing much bigger companies, enterprises come into the market with repeatable use cases. Um, and then I think we're seeing uh uh development of a richer ecosystem to serve these customers. So a lot more integration surface for us to build for. How about you? How have you seen things evolve with Mash?

Bam Azizi 21:58

Yeah, similar similar to what you said. Like there I think there are two metrics or two main reasons for that. Like when we started 75%, 80% of the assets we were touching or we were like facilitating to the transfer, it was more on Bitcoin, Ethereum, Solana. Now it's more than 75-80% is on the stablecoin side. So that trend happened around the same time both of us started the company. Clarity Act will open the door for a lot of other types of crypto assets. But I think that was kind of another impact that um or another reason uh that we are seeing more stablecoin than non-stablecoin assets. But the similar pattern.

Henri Stern 23:11

And what are the biggest blockers that you're still seeing today? The biggest like you know, two or three unlocks that if this happened, then the market on your side would be that much more extended. Also, I didn't I didn't I don't think you knew that you were you were coming on my podcast today.

Bam Azizi 23:25

No, happy to answer. Um so I think the the biggest uh the biggest block right now is um still there is a lack of clarity. So we are all waiting on the Clarity Act, um, the situation that we have with the banking set sector. But let's not forget that's that's only US, right? So the biggest block here is we have different jurisdiction, different countries are passing different types of laws, being compli as it like crypto is a global phenomenon, so still so as a stablecoin. So uh dealing with all these fragmented uh regulatory framework is is going to be um uh very, very painful and challenging for a lot of businesses like like Mesh, like Prevy, like Stripe, um, because we're global companies. Uh and I think we would like to see some sort of an um uh like similar to what happened to internet, right? Some sort of a standard, some sort of acceptable best practices and protocols globally for these companies to um to grow faster.

Henri Stern 24:29

That makes a lot of sense. Um super cool.

Joining Stripe Without Losing Focus

Bam Azizi 24:33

So let's let's move on to your vision. So you said what was your vision day one? Uh now you're part of a bigger company. Um I don't know like how much detail you can share or you want to share, but like as a founder, it's it's very interesting for law founders to be in the position to somebody else buy the entire company. Was there any dilemma for you? Like, was a stripe uh and be like in the hindsight do you think that was the right move? Uh and and then I will get into the vision post-acquisition, but whatever you can share that would be super valuable for law founders to learn from you. Yeah.

Henri Stern 25:17

So I think I think we were uh the short answer is is is I I'm I'm very uh grateful and excited uh that we've made the decisions we've made. I think it's been a uh, you know, we're we're we're about nine months into into into being a part of Stripe and Privy being a wholly owned subsidiary. Um and I think it's it's it's I'm I'm really happy with with where things are and the ways in which it's it's accelerated us. And so I think there's probably like you know, three things that stand out. But the first is uh the amount to which Privy as a company, as a product has been accelerated, both in terms of product capacity, in terms of uh team capabilities and the things that we get to do on the ground, you know, engineering leverage, tooling, uh, infrastructure. There's just a lot that we uh we're already shaping ourselves to be like Stripe and now get to do so in a much more direct way, which is super exciting. So uh that's turned out to be great. The second is I think in terms of um, you know, impact, we we get to serve customers that um we think we can really just change the world with. And this might sound a little bit like, you know, uh goody two shoes, but but but but part of it is like, man, we we had 10-year roadmaps that that are going to turn into two-year roadmaps in ways that are really uniquely exciting, I think, and enabled by this. Um and then I think the third is the opportunity to hopefully help transform Stripe itself. And so coming into the conversation, you know, the the folks at Stripe came to us, um, they'd already bought a company called Bridge that does stablecoin orchestration and um and issuance, and they were like, you know, we we realize that wallets are an extremely important part of the stack and one that we want to be investing in and building with. And I was like, uh, you know, great, we can sell you some wallets. And they were like, no, no, but we'd like to consider, you know, uh, I think the way the way it was framed at the time was very nice. It was like, you know, would you consider merging our two companies? And I was like, that's a super nice way to put whatever would be happening. Uh but uh but at the time, um, we were already doing a lot of work with Rich, who we knew from just serving joint customers. And so I think that went a long way to reassuring us that you know Stripe was very serious about this. And then um just going into the early conversations, most of them, frankly, were about product and were about where the internet ought to go. And so it was it was very much a vision-driven, here is what we could do as part of Stripe and working much more closely with Stripe. And I think that kind of set the tone and the foundation for how we do this. And I would say Stripe's broader mission in the space is is twofold. One, serve users in whatever ways are most efficient and best suited for them. And so, like, we want to be able to serve users across any rail, whether that's Pix, SEPA, or USDC or whatever, right? The point is if there's a rail that is a good fit for what the user needs, we Stripe should be there and should be able to uh be the best tool to enable that. And then I think the second is to actually build the core primitives that enable new businesses to get off the ground, building, you know, to grow the GDP of the internet might be the Stripe meme. And I think you kind of see it in a few places here, both with like across, you know, merchants, developers, fintechs, but increasingly with agents and things like that. And so I think like, you know, Stripe's view is uh these rails should be married so tightly together that we can inherit all of the things that are amazing and incredible about crypto, but we can also bring to them the things that work so well in the systems that we've built to date. Uh and I think Privy's worldview was how do we make it that you can build incredible new experiences without having to think about the underlying rails? So the two really meshed up extremely well. And from that standpoint, it's been uh it's been a lot of fun.

Bam Azizi 28:53

That's that's awesome. Yeah, it I I agree, it meshed up. Pon intended. Um But um it's it's it's funny that you mentioned uh increasing the GDP of internet. When you're opening a lot of these websites, uh especially on the crypto infra, they're they like everyone is talking about the same thing. Like if you open Bridge website or Previe or NOAA or BVNK, uh they're all like they they all want to set money free. I think you're the only one that is like a little bit different that you want to you're like focused more on the user experience. Uh and also you want to enable uh, in a sense, for the work to come and chain without like abstracting all the complexity, without like owning the risk, owning the complexity, owning the technical challenges. Um so it's it's it's very, very unique. And then I think about it it's very, very similar to what Stripe did for credit card processing, right? So it was very, very tough to process a payment. Uh you had to manage tokens, you had to manage authentications, you had to have a like secure server, you need to be compliant, you have to have licenses. They abstracted all of that complexity and gave you one line of code, and then you could boom, you could accept credit card. Um and in a sense, it it it sounds like a very, very nice match. And uh considering that Stripe is also a tech company, you're not like just joining another financial institution, it's just another tech company. Uh, that would be a that would be an interesting match. Um, I could see that. Uh what would what would what what was the change after? I know that you're a wholly owned subsidiary, you still run pre-V, but was there any change from vision from product perspective, or you you're just have the freedom to do whatever you want to do?

Henri Stern 30:39

No, it's a good question. I uh maybe I'll add one last thing. There's a there's a the you know the the the the the name Y combinator I think speaks to some version of a recursive function that accelerates like the the the slope of acceleration of a curve. I'm I'm kind of butchering it, but the idea is broadly that. And this is what I like about you know building developer tooling. We we we get to build the underlying foundations that enable people to do their own thing. And so there's this there's this dual layer, and actually Stripe has this much more than PRV, which is uh actually building the Rails, building, uh the products building, you know, uh the the the the account system and so on that enable folks to run on Stripe, but then giving them direct access to the underlying tooling so that they can build it themselves. And I find that to be really, really exciting. Um to answer your question, um the you know, the preview roadmap is really is really set by us. And so in that sense, one of the things that was very important to us coming in was we we kind of had a few conditions. One of them was we need to be able to, you know, obviously work together towards a better stack that Stripe can use that meshes, again, it uh really well. Um, but we should be able to work with whoever is best for our user. And so if that's a bridge competitor, if that's a Stripe competitor, today you might say if that's a tempo competitor, it doesn't matter. Uh, whatever our customer needs needs to work really, really well with Privy, or frankly, with any other part of the stack, so that each piece can be valuable on a standalone basis and can be the best tool for the customer, uh, no matter what else they want to use. And so I think that was a very early part of the like, you know, contract and agreement that we had in how we do this. And so we have a lot of um of freedom to uh run our roadmap. In fact, we we set it entirely and it's completely based on what our customers are asking us. That's been one way in which we have just continuously worked with Privy. We we don't do much by way of partnerships, really just answer customer demands. Um, maybe what working within Stripe has given me, though, is a lot more appreciation for probably two things, which is one the importance of like being bimodal, the places in which Fiat has good things to bring to the stack and we're actually being able to play both instruments is is really, really valuable and really, really important. Um and two is uh the importance of considering the well, these are both very vague in a sense, which which maybe speaks to the lack of constraints that we've had. But two would be um the ability to really build across like different layers of abstraction. So all the way from here are UIs that you can use when you want to build a transaction with Privy, here is a full like kit that gives you just a React component that you can build with, all the way to this is the underlying raw API request and so on, and just the uh importance of the flexibility of the underlying rail as you go from building for a certain type of customer to you know the enterprise user to now like tooling builders and so on. That's something that Stripe has so much experience with that that we've learned a lot from.

Bam Azizi 33:41

Makes sense.

Competition Heats Up In Consumer Fintech

Bam Azizi 33:42

Um let's talk a little bit more about the space. Now we're hearing that a lot of companies are building new banks on top of blockchain, Erebor, Dakota, and many, many other companies that they're building. Um I I've heard um Ethena is another one. Like we we also have a lot of credit card, like crypto card, crypto back card companies like Cost, Rita Pay. Uh seems like there is a big competition heating up on the consumer side. Uh, do you think uh that would impact how um the cons the crypto works for the consumer? Do you think uh naturally this competition will make things easier? Because now we have many different stable coins, many different tokens, different networks. How would you see that uh user experience evolve uh as we're seeing this competition heating up?

Henri Stern 34:38

Yeah, it's a great question. I am well I'm very happy that you named the a number of Purbi customers as part of that that wind up. So we're very excited to see all the work that's happening there. And frankly, I think uh we're headed towards very, very bright future for the end user and for the consumer for having so much option. I think what's happening is uh the competition in the space is going to give rise to uh both incredible like fintech super apps that are able to do what hasn't been seen in the West all that much in really exciting ways, and like pretty incredible specialization, especially as you know, you can kind of get software on tap these days with AI. Uh now, I I think there's a lot of caveats here around the security of the systems that you're building and so on. But the point is um it'll mean that you can get really the right product for you in a way that wouldn't have been possible before. So a lot easier to build really good fintech experiences on secure Rails if as we move forward. Um you're right that there's increased fragmentation, but I actually think that what we're seeing is a move towards a lot of these traditionally non-crypto companies to pick a stack and kind of stick to it. And so what I think we're gonna see is an evolution of the underlying infrastructure to marry and kind of bridge these uh these different infrastructure choices together. So, for example, I'm friends with uh uh Sam Broner, who started the new money company. They're building a stablecoin uh clearinghouse. And I think you'll start to see the emergence of, you know, this is what Bridge does in many ways with orchestration. Um, this is what you guys do with with payments acceptance as does as does Stripe. And and this is part of the point of preview with wallets and being able to do it cross-chain. We'll see infrastructure that basically allows uh the stack and the fragmentation to get married and whittled down so it doesn't impact the end user, and the user will kind of see actually the disappearance of all of these knobs and settings, even though the developer has access to them.

Wallets Evolve Into Digital Asset Accounts

Bam Azizi 36:26

You think wallet would disappear, like in the sense that we know wallets?

Henri Stern 36:31

Uh yes and no. I think I think wallet in the sense that, well, actually. Yes, no, and no. I'll give you three responses. I think wallets in I I think that I think wallets in the MetaMask Phantom Rainbow sense of the word uh is a really unique product shape that's uniquely well suited to a number of extremely important customers. And I don't think that's going away anytime. Uh, and so I think that'll remain. However, I think we'll see massive expansion of the market through wallets that live within products. And obviously, I have a stake in this game, but I uh I I think embedded wallets basically are going to continue to grow. And in that sense, I think more people, and we're already seeing this, will use stable coins than they know. And um they'll be able to uh uh use it as part of this wallet construct that goes far beyond a typical crypto wallet without um without having to know about it. So I think I think basically actually there will be more things that kind of look like what we see crypto wallets as out in the world, but they won't look like the crypto wallets of today. Well, at sessions last week, uh we unveiled um this thing called digital asset accounts. And basically, digital asset accounts is something that we've been building for a while at Privy, and this is a higher level abstraction on top of wallets where you can have wallets that are multi-chain, that have multiple custody types, so they can be self-custodial and they can have a custodian under hood across the different chains that you're operating on, that can plug directly into orchestration rails, that can plug directly into bridging and swapping and earn and yield and so on and so forth. And so, like all of these things will be packaged together so that this wallet becomes much more powerful than it used to be, but it remains a modular piece of infrastructure where you can plug the components that you want into it.

Bam Azizi 38:20

That's awesome. Um super excited to put my hands on it and test it and and use it as part of the mesh stack. Um so um on the on the on the founding journey side, you're just kind of wrapping up the conversation. I would like to know, like, is there anything that you wish you knew when you started preview that you would tell your the younger version of yourself?

Henri Stern 38:46

I don't know. I uh I think the journey, the journey is is is is a lot of it. I I I think maybe I have three things, which is this is probably more applicable to my my 22-year-old self and the first time I I started something, and that is like get very good at triaging the areas you need to improve versus the areas you need to just find people who are better than you. I think earlier on in my career, I was really trying to push myself to be better at all the things I was really bad at, and there were many. And I kind of just got to the conclusion, man, this is a complete waste of time. Like I will never be as good as you know, BAM on this specific thing. And so I just need to work with BAM rather than trying to like get there. And I think I got a lot more comfortable with these are my deficiencies, and I can know them and I can buttress them and I can build a team, hopefully, that will enable us to win together rather than treating like you know a startup kind of like a prolonged like therapy session where I'm trying to be a better version of myself, which isn't the point at all. Um, so that's probably one uh that that that I think you know it took me a decade to internalize, but I've gotten better at. Um easier said than done for sure. And then I think the second is some version of um we treated privy like life or death at all times. And I don't regret doing that. I think we have been, you know, really working like the entire company depends on it. And that's because it does. If we're not here to create value and impact every minute of every day, then there are much easier jobs that we could have and much easier ways to do things. And um, I think that intensity that that Asta and I and and the team brought uh has been such a defining part of how we work and the way in which we do. And so I'm I'm really happy that this is how we do things. And I think there have been moments where uh I've heard that it was not sustainable and not how we should be doing things, and I uh I respectfully disagree.

Bam Azizi 40:49

Yeah, makes sense. But these are these are great things that I'm sure a lot of uh younger founders and first time founders would would learn a lot from. So thanks for sharing that.

Contrarian Bets On Crypto’s Future

Bam Azizi 40:59

As a as a closing question, uh I have two questions. Uh one is like bigger question, one is a smaller question. The bigger question is um what where the industry is headed, what's your per prediction, what's your contrarian view of the market? What's something that you you're the only one saying it's going to be true, that everybody else is saying it's not going to be true? Um yeah, any anything that comes to mind from prediction perspective?

Henri Stern 41:27

So the big I have two. I have two hot takes. Um the big debate I think I think I think crypto is going to usher in a world of global companies in a way that we haven't seen before. I think uh it'll it'll end up marrying with everything that's happening on the agentic side, though. That may take longer than people think. Um but the two contrary intakes, one might be I believe crypto rails will start to peak, meaning uh not not peak P E A K, but P-E-E-K. They will start to show through the interfaces a bit more. As we get comfortable with the medium, there are parts where you will start to see the underlying sort of rails. Like I went to uh Kenya last last um um December and uh I saw uh the tether logo, the USDT, on a on an airport billboard. And I just think there will start to be not just consumer uh recognition for certain stable coins, but actually uh there are parts of, you know, you don't think about TCP IP when you're using the internet, but the word buffer is kind of part of the vernacular. And so I actually think we'll start to see some of the underlying uh technicals peek through in a way that's that's natural to users because the Rails make a lot of sense. Um so that's my my first contrarian take. It's a debate I have very often with people at Stripe. Um and then I think uh the the second is that I I I hold out hope that uh Web3 uh will rise again and that there are uh non-financial applications for crypto, even though um it'll take a very long time for them to develop.

Bam Azizi 43:00

Yeah, I I totally understand.

AI Changes Security And Developer Work

Bam Azizi 43:02

My my second question is uh AI. Um how does how did AI change preview? How did AI change you?

Henri Stern 43:11

It's a great question. I mean, we're extremely careful with our uptake of AI in a way that we should probably be embarrassed about, but the reality is we build security software. And so uh we've been very early and hungry adopters of uh AI defensive software, you know, integrated, always on pen testing, uh a number of suites that we integrate into our CI CD uh pipeline and so on and so forth. But we've been a bit slower maybe than we ought to uh in developing basically uh AI code generation because of uh the way in which our stack works and is meant to work. Um but it has certainly changed, I think, some of the development practices at Privy and the way in which we interact with our own product. It's changed. Changed a product itself. Like at this point, we monitor every piece of documentation, every product surface to make sure that it's agent-friendly, that it can be consumed in the way that developers tomorrow and today are building, which is to say, not reading the docs, but feeding them through uh another intelligent uh being and asking it to whip something up. Um, so it's changed our product expectations and our product sense and our product milestones really meaningfully. Um and then I think it's forced us to think about testing differently. Like the reality is subcent transactions become really important in an agentic world. Uh, you know, uh hundreds of thousands, millions uh of transactions a minute become something viable if you're imagining some version of streaming payments on uh machine-to-machine world. And so we've actually been very hungry adopters of the early tooling, like you know, MPP and X402 and so on, because we think it can really push our product to be much better, very much in the same way as you know, the very crypto native parts of the industry help us scale the product for everyone else. Um so that's been a a huge change for us, and and I'm excited to see uh it keep happening. In fact, I think at this point, something like 35% of new signups for Privy as developers are people building agentic wallets. So we're we're just seeing a a lot uh of acceleration there.

Paris And New York Food Picks

Bam Azizi 45:17

That's huge. Um so uh some quick random questions. Actually, one. What is a good restaurant that you're a big fan of in Paris and in New York?

Henri Stern 45:28

Oh man.

Bam Azizi 45:29

It better be vegetarian because I want to try it.

Henri Stern 45:33

Tough. Um actually I do have good ones. Uh they're they're they're uh man, this is they're both extremely bougie uh references, so I'm I'm so sorry in advance. Um there's a very good restaurant in Paris. Uh at the corner, I I forget which uh which street, but I think it's Rite Verneille and something else called uh L'Arpège, A-R-P-E-G-E. It's uh I think three Michelin star restaurant, which is what I said.

Bam Azizi 45:58

I went there, I tried that.

Henri Stern 46:00

I confirmed it's very good. Amazing. And the chef Alain Passar will come out and kind of like greet all the tables, and he's this extremely like charismatic guy uh who who tends to hit on the ladies at the table, and so like a very fun experience uh of just like being around this this this long life.

Bam Azizi 46:16

They're vegetarian, right? Or pescatarian type of restaurant, they do fish.

Henri Stern 46:19

They they do fish, and now they've reintroduced meat, but for a long time they were only vegetarian. Um and then in New York, um I actually think ABCV uh on 19th and Broadway or so is a very good vegan restaurant. Um that that that that makes some some some very good food.

Bam Azizi 46:38

That's great. Uh for a French person, you know a lot of vegan restaurants, so that's very good. I I I I I you know don't twist my arm.

Closing

Bam Azizi 46:47

Henry, thank you so much for taking the time to join us today. I know you're very, very busy uh to our audience. Please remember to follow the show and whatever platform you're listening on and stay tuned for more episodes of COBIT. Thank you very much. Thanks so much.