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.
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.
Advising unproven risky businesses to depend on other unproven risky businesses? Doesn’t that just increase the likelihood that something goes wrong?
Are you saying founders don't mount an FTP account using curlftpfs and access it using SVN?
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)
You should invest in some YC startups with your YC investment money.
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.
Seems sub optimal to drop millions into a founders bank account for couple of years runway.
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.
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.
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.
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)
Why won’t the fed raise rates?
Don't get bogged down with that stuff.
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.
> 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.
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?
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.
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.
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.
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.
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
?
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.
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.
YC are presumably paying for the usage with fiat.
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.
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.
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.
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).
https://ndl.ethernet.edu.et/bitstream/123456789/41452/1/112....
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.
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.
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.
YC -> Circle -> Coinbase -> YC
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.
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.”
Here's Gusto's CTO: https://x.com/edawerd/status/2018785968669815011
• 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)
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.
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?
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.
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.
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...
(FWIW, it did end well, as going with a relatively large federally insured bank meant that no one lost any money during the crash)
Of course today startups are probably using Mercury/Ramp/whatever.
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!
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.
Instant redistribution can be seen as a cost-center and entice strategic investors to work in the background for the firm. I am thinking like a Paid Advisory Committee.
It's really about getting the ball rolling sooner in terms of investor returns. If it's going to happen, why defer it? It could also be at the discretion of the investor.
Good points, though.
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.
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.
Indirectly it might provide some more public visibility initally anyways.
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.
> ERP / Accounting + Finance + Corporate Treasury integration (with ILP Interledger)
https://news.ycombinator.com/item?id=31686140
https://forum.effectivealtruism.org/posts/5mghcxCabxuaK4WTs/...
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.
We have people in this thread praising KYC.
Satoshi Nakamoto must be rolling in his grave.
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.
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.
ramen is at least 1:1 backed by noodles, and doesn’t depeg.
Both are equally stupid, and you have to exchange them to buy most of the things you might need.
Crypto more hype-able
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.
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.
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.
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.
