The Unicorn Hunter's Guide to the Digital Asset Revolution | Matthew Le Merle

What are the parallels between the early internet boom and today's blockchain revolution? How will the tokenization of every asset—from money and commodities to real estate and private equity—fundamentally reshape global capital markets?

In this episode, host Lauren Weymouth sits down with Mathew Le Merle, a titan of tech investment and the Co-Founder and CEO of Fifth Era and Blockchain Coinvestors. With a portfolio of over 1,500 startups, including more than 80 unicorns like Ripple, Kraken, and OpenSea, Mathew offers a masterclass on the past, present, and future of digital assets.

Drawing on 30 years of experience in Silicon Valley, Mathew explains why blockchain is not a separate phenomenon but the crucial next phase in the "digitalization of everything." He breaks down complex topics into clear, actionable insights, discussing:

• The Inevitable Shift: Why the digitalization of finance is the next logical step after the digitalization of communications and content.
• The Power of Tokenization: How creating a digital proof of ownership for real-world assets will unlock unprecedented liquidity and efficiency.
• The Future of VC: How venture capital models are evolving to adapt to a tokenized landscape.
• The Innovator's Dilemma: Why traditional financial institutions struggle to adapt and how they can strategically engage with disruptive technology.
• Navigating the Noise: Mathew’s advice for investors, entrepreneurs, and students on identifying long-term value and avoiding the pitfalls of hype and speculation.

Tune in for an essential conversation for anyone looking to understand the foundational economic and technological shifts being driven by blockchain and Web3.

Transcript

Lauren Weymouth: 00:25 Welcome back to All About Blockchain. I'm your host, Lauren Weymouth, and our podcast looks behind the curtain at what academic [00:00:30] and industry partners are building. I think I bundled that word. Yeah. Our podcast looks behind the curtain at what academic and industry partners are building. We dig into blockchain. Blah. We dig into how blockchain is solving challenges across all different sectors, and our goal is to talk about how it makes a positive difference. Today, we've gotten a titan of tech investment in our recording studio, the one and only Matthew Le Merle. As co-founder and CEO of Fifth Era and Blockchain Coinvestors, he has established one of the most robust early stage investment ecosystems in blockchain, backing a portfolio of 1500 plus startups, including 80 plus unicorns like Tether, Kraken, OpenSea, and even Ripple through partnerships and top VC funds worldwide. He's also a bestselling author with acclaimed titles like Corporate Innovation in the Fifth Era, Blockchain Competitive Advantage, and The Intelligent Investor: Silicon Valley under [00:01:30] his belt. Matthew, it's great to see you here in our San Francisco production studio. Welcome to All About Blockchain.

Matthew Le Merl...: 01:36 Thanks, Lauren. And those are some very nice words. I really appreciate it. Thank you.

Lauren Weymouth: 01:40 Well, when you and I had a discovery call, I really felt like there would be something for everyone on this conversation, from VCs to investors for startups and entrepreneurs to blue chips, and administrations, faculty, and students.  So let's dive deep into the future of finance, digital assets and what it all means for investors, innovators in the academic world.

Lauren Weymouth: 02:11 Okay. So you've had a front row seat to Silicon Valley's evolution for 30 years. What's the most significant parallel you've seen between early internet boom and the current blockchain revolution, particularly in how they've challenged traditional business models and capital structures?

Matthew Le Merl...: 02:26 Yeah, thanks Lauren. It's, it has been a long journey, [00:02:30] um, and I'm gonna date myself because I first started thinking about, um, what eventually became the internet back in the 1980s when I was at McKinsey and later on with Kearney. And, um, when you look back, this is all about digitalization and it's about software eating the world, as Marc Andreessen says. And ultimately, it's all one part of one process. So  we can cut it up  if we wish. We can talk about the internet, we can talk about blockchain or crypto or AI, but they're all the same thing. They're all basically about software and, and advanced computing, digitalizing human activity and moving us to what will eventually be a fully integrated global digital economy.

03:21 And we're not there. The, the first, whatever it was, 40 or 50 years, we were trying to digitalize communications and content. [00:03:30] We are not complete, but we're a long way advanced on that issue. We haven't yet got round to digitalizing finance, which is where blockchain comes in. And I know we're gonna talk about that in a minute. And then everything we're doing now with AI is about building on top of the infrastructure of global computing, networked world, and the movement of content and communications online, which now allow us to analyze all of that and begin to get smarter insights and make smarter decisions and change the way we do things based upon even more advanced computing models.

So for me, it's a continuing transformation towards an endpoint, which is probably still 50 years away. And for me, the rest of my lifetime I think will be a part of this. it's both blockchain for me, but it's also AI as well.

Lauren Weymouth: 04:28 Yeah, that makes a lot of sense, I remember in the late '90s the way the internet started rolling out and, and people started adopting it to now when we see human behavior. I mean, people are just obsessed with their mobile devices and everything is being accessed through, you know, their online-

Matthew Le Merl...: 04:48 Right

Lauren Weymouth: 04:48 ... devices. How do you see blockchain kind of rolling out in everyday life?

Matthew Le Merl...: 04:54 Yes, thank you. the process of innovation is always somewhat similar, which is things [00:05:00] start as ideas and they start in laboratories, and we don't really know how to use the innovation or the technology. And then a few people experiment, but most of the world says, "We don't need this, and you're crazy, and why are you doing that?" And then suddenly you get a little bit of traction, maybe there's a use case which begins to be clear around the benefits that users get in terms of speed and cost and accessibility, et cetera, security and so [00:05:30] on. And then it picks up, and then it becomes something you can't ignore. And then more and more people come online, and eventually you have the laggards who finally have no choice. And even today with the internet, we've gone through that entire process. We still have about a third of the world that is not yet online.

05:50 So for us, we take it for granted. We use it every day. We... All of our communications essentially are digital, or most of them. We have digitalized most [00:06:00] of the world's content. When Google first said that, we're going to digitalize all of the world's content, make it available to everyone, everyone laughed at them.

Lauren Weymouth: 06:07 Right.

Matthew Le Merl...: 06:08 Today, we have digitalized most of the world's information and most of it is accessible if you are online and you have the tools.

06:16 So that same curve that I just described in words is happening in blockchain. So when you got started, and when Ripple got started, we were just beginning to f- figure out how to make natively digital [00:06:30] monies that could operate over the internet. Bitcoin being the first, XRP being not far behind. And we knew that international remittances and payments, even domestic payments, were slow, costly, difficult, not very accessible, um, and full of friction, if you will. But most of the world didn't care and thought that the status [00:07:00] quo was good enough. Once you start getting 400 million people using Tether, once you get XRP and Ripple infrastructure actually being able to move monies, um, once you begin to see the beginnings of, uh, those digital payment rails, for most people, there's no looking back.

07:19 Now for the institutions, they resisted that. And in fact, here we are in 2025, but it's only really this year that most [00:07:30] of the world's big payment companies and banks are now all in on this movement. For the last five or seven years, they've been resisting it very strongly. So that is exactly what happened in the 1990s with the internet.

07:44 So, , Innovation always moves in that sort of a direction. It's true in blockchain, it's true in AI, it's true in almost every technology that I've [00:08:00] seen. Starts slow, accelerates once the use cases are clear. The incumbents resist, but eventually have no choice. And then all of a sudden it comes with a rush and the adoption curves steepen enormously. And then one day we look back and say, "I can't imagine living without this." Uh, and that's gonna happen with blockchain too.

Lauren Weymouth: 08:21 I'm so glad you summarized that, but my takeaway was correct. It really is the, the specific use cases that get, that create the stickiness and then all of a sudden [00:08:30] the original mission of creating the internet of value, so that money flows the way information flows today, is actually happening.

Matthew Le Merl...: 08:37 Exactly, exactly.

Lauren Weymouth: 08:37 Yeah. Okay. So you've described blockchain as a fundamental shift in how capital markets operate. Can you elaborate on that?  How will the tokenization of assets change the landscape for future venture capital firms? And what will the VCs of the future look like?

Matthew Le Merl...: 08:54  so just a couple of things to ground set.  we're gonna talk about digitalization of commerce and finance, 'cause that's embedded in this question. And we're obviously gonna talk about the digitalization of monies, commodities, and assets, which is also part of your question. And you also mentioned tokenization. And so for our listeners, let me just clarify a few things.

The world is full of assets. Every asset has an owner. It can be an individual, a person, a country. We don't have any assets [00:09:30] on the, on the face of the world that someone doesn't claim they own. There's a, a few exceptions. And obviously we could go conceptual. But when it comes to a hard asset, every asset has an owner.

The record of ownership of those assets is typically paper-based. So, uh, when you buy something, you get a receipt. If you buy a car in America, you have a pink slip and it's recorded into the DMV's database. Um, if you buy a fund or make a private investment, it's almost certainly a paper-based transaction. Even if you buy most real estate, it's a heavily paper-based transaction. It's only when we get to a few asset classes, like for example public equities, where we, where we digitalized, uh, through the, um, issuance and settlement process a while ago. It's still version one technology.

So just track with me on this. In a world where most assets are owned by someone, but most of the proof of ownership is paper-based and people-intensive, when we digitalize it, we unlock enormous opportunities around the speed with which the asset can move around the world, the ways that we can take friction out into buying, selling, holding, lending, borrowing against that asset and so on. We can create der- derivative products on top of the asset. And we can create enormous liquidity, better price discovery, and so on. So there's a lot of benefits that come from [00:11:00] digitalization of the proof of ownership.

11:04 The technology we're using to do that is called tokenization. So just to be clear, tokenization is an innovation that allows for the digitalization of the proof of ownership. And it sits on blockchain rails, distributed ledger technology rails. And that is an enormously powerful thought process because almost all of the world's asset classes and almost [00:11:30] all of the world's big institutions have spent a long, long time and trillions of dollars of money trying to digitalize their asset classes on old technology and they failed.

11:43 And this goes back a long, long way that, you know, it's not that they haven't tried, it doesn't mean that Bank America hasn't tried to digitalize lending and borrowing. You know, the payment companies, they've tried very hard, Visa and MasterCard and others, to digitalize [00:12:00] international payments, but they haven't succeeded on mainframe-based old technology. And tokenization is a light bulb because it enables something that heretofore we couldn't do. And that is Satoshi's brilliance because Satoshi cracked the back of the fundamental challenge with Bitcoin and the Bitcoin blockchain, blockchain being an innovation to enable the movement of native [00:12:30] electronic cash over the internet.

12:32 So again, I've said a lot, but we're at a inflection point and it's taken a long time for the world's incumbent institutions to see it. Now they see it,and now it's gonna happen fast. We will digitalize all of  the money of the world's value, and it will be on digital rails and distributed ledger technology, and tokenization will be that solution unless something better comes along.

Lauren Weymouth: 13:00 [00:] You got me excited. What are some ex- what are some really good examples of things getting tokenized that you, you like to see and that you wanna see more of?

Matthew Le Merl...:13:08  I'm actually gonna start off [00:13:30] with monies.  I'm gonna start off with monies is that in the world of value, monies are critical because they enable small incremental movements of value between people, as well as obviously very large movements of value. But at its core, the everyday transactions of 8 billion human beings, and later on all of the world's devices and all of the world's computers, are gonna essentially be movements of value [00:14:00] through monies.

14:01 So when we digitalize monies, we are at the base layer of the global financial system. And so Tether, where we're an early investor through blockchain capital, Tether is clearly a demonstrable example of an at-scale solution that 400 million people are using that gives, give, gives them incredible value. You can move a dollar, a Tether- Tetherized [00:14:30] dollar, if you will, a tokenized dollar called a Tether, you can move that dollar anywhere in the world, almost real time, almost no cost. And you can also do essentially microtransactions, transactions that would be too small to do on Visa or Mastercard 'cause their costs would out- outweigh the movement of the value. Um, of course you can use, uh, Tethers for almost anything today if it's allowed within the jurisdiction within [00:15:00] which you live.

15:01 So this is one this. And then this Circle, and then there's PayPal, PNY, and then there's XRP and others. So I'm not saying there's only one money, but this is a huge use case.

15:14 A second use case is the storing of value. Um, and right now the leader in that is Bitcoin. Um, just to be clear, Satoshi did not plan for Bitcoin to stop as, uh, as a store of value. The vision was that [00:15:30] it would be an electronic cash, a money native to the internet where anyone could move value in real time at no cost in small quantities anywhere in the world. That's the vision for Bitcoin. Bitcoin is moving towards that vision, but isn't there yet? Right now it's only at the store of value level. So this is the second big one.

15:52 We're moving up the stack, right? So monies, stores of monies. Now we're gonna get into digital commodities. [00:16:00] And so we're beginning to digitalize the ownership record for vaults full of com, uh, commodities. That can be gold, that could be anything you want it to be. And then we're gonna get to securities, and we're just beginning on the security front.

16:14 Um, there are moves now to tokenize even public equities. And you sort of say, "Well, why do I need to tokenize public equities?" This is the last thing I'm gonna say on this answer, Lauren. We have [00:16:30] paper-based processes and digital processes, and we have made, uh, we have old paper-based products and digital products. If you think about that matrix that I just painted in the air, old products can go on old, into old wallets, exchanges and, and storage approaches and trading platforms and venues, but they can't move into digital platforms 'cause they're not [00:17:00] natively digital. Digital products can go natively into digital platforms and they can be wrapped in traditional wrappers and go into old platforms and processes.

Lauren Weymouth: 17:13 That's right.

Matthew Le Merl...: 17:15 As we all migrate from old ways of holding, and trading, and borrowing and lending to digitalized versions, the only products that are gonna be relevant are the natively digital products. [00:17:30] So we're in a big transition, not only on the way we access value and move it, we're also in a big transition on the products and the way they're designed to work in natively digital environments. to close this out, Larry Fink of BlackRock has already painted a picture where every BlackRock product will eventually be tokenized because he and his team [00:18:00] understand that as the 30-year-olds become 40, and as the 40-year-olds become 50, all BlackRock products will have to be natively digital and tokenized to reach those people in the venues that they will prefer, which will be natively digital venues.

Lauren Weymouth: 18:19 Very forward-focused.

Lauren Weymouth: 18:21 Yeah.now you have such an elegant way of explaining everything, but there's still so many common misconceptions out there about what crypto [00:18:30] is or the pitfalls, um, that exist. What do you see are, are the biggest ones, and how do you advise people to build a long-term strategy for this asset class?

Matthew Le Merl...: 18:40 the misconceptions are, this is all about crypto bros creating new-to-the-world tokens that seem to be more [00:19:00] scams and, uh, uh, you know, have no intrinsic value than anything else. And I'm gonna say right now that there's a hefty dose of that, and I'll come back to it in a second. But I hope by now the listeners have, have got this clarity that what we're actually talking about is what I've just said, the, the complement of digital communications and content with digital finance and commerce as we transition towards a digital economy. And [00:19:30] that we're talking about essentially a movement in which we eventually, uh, allow everyone to benefit from frictionless, real-time, low-cost, very easy to access ways of doing everything they wanna do. And that's the backbone we're building. And it can only be good because, um, the friction today is a huge net weight on 8 billion people, let alone all the devices that we want to digitally enable to help us in our work that can't [00:20:00] deal with checks and credit cards and going to the bank, right? They're devices. they will never be able to operate in that in the way that we're expected to operate.

Lauren Weymouth: 20:11 Sure.

Matthew Le Merl...: 20:11 Yeah. So if you just hold onto that thought, in all innovation, there are a lot of experiments and many of them fail. There are also bad actors that will tell you they plan to do something and they don't plan to do it. And if you are an investor in particular, capital is [00:20:30] a magnet to bad actors because they want your money. So whenever we, as in here in Silicon Valley (laughs), whenever we are in the middle of investing and participating in an innovation, a new innovation space, I think we go in eyes wide open to the reality that almost everything we're seeing is gonna fail and that you have to be very discriminating in what you choose to lean into [00:21:00] with your time, with your energy, with your money. And that there are bad actors and you have to due diligence them out of the equation. And due diligence is fundamental to venture investing. You can't do without it.

21:15 Unfortunately, over the last few years in my space is blockchain and crypto and AI, unfortunately, in my space, a lot of people told us things that were not true. They said they were gonna do things that they never planned to do. Those were called [00:21:30] white papers. They issued tokens that they quickly abandoned. And they encouraged a lot of people to put their time and energy and money into things that were, frankly, only there for one purpose, which was to make money for the issuer, the initiator, the founder of that project or that concept or that idea. And, and it's very sad, but let me tell you, it happens all the time (laughs) in venture capital. It's not, it's not... It's true in all areas of technology. [00:22:00] And, and as venture capitalists, we spend so much of our time through due diligence trying to get rid of those people. Temporarily in crypto, it became the norm, I think. And now I think we're beginning to get a rid of a lot of that. So [inaudible 00:22:16]-

Lauren Weymouth: 22:16 I'd love to just dig a little bit deeper into the-

Matthew Le Merl...: 22:18 Yeah.

Lauren Weymouth: 22:19 ... the, the idea of due diligence, because you're the perfect person to talk to you about this. Over 1500 investments, 80 of which are unicorns in your portfolio. So what is the key signal? Like what [00:22:30] is the thing you really look for in a team or project to know or indicate that it has the potential to become a true industry giant, more than just a fleeting idea or something that's not gonna convert from a white paper into an actionable commercializable?

Matthew Le Merl...: 22:45 Yes, Lauren. So thank you for asking the question. And let me be very clear. Our chosen strategy begins with we back the world's best venture capital firms in blockchain and in AI. And we do it that way round 'cause what we [00:23:00] learned after 30 plus years was that it's, we're not very good at due diligence as individuals. Um, there's too much deal flow, there's too many opportunities. You can't due diligence everything, and you don't have all the skill sets.

 the best way to participate in the early stage was to find the world's best venture capitals against each theme, or technology, or innovation and in each geography and partner with them. [00:23:30] So the heroes of our story are not actually ourselves. They're the GPs like Bart and Brad of Blockchain Capital or, you know, the team, uh, Matt and Nic at Castle Island. And I'm sorry, I can't name everyone, but these are the stars of the show from the investment perspective. They do do deep, deep due diligence. I can tell you what they do, but they have to be on the ground, they have to be there.

23:56 And then it's, uh, even more importantly, it's the entrepreneurs. [00:24:00] The entrepreneurs that deserve to be backed, that are gonna change the world in remarkable ways and that these VCs get to know and back. That's really the, our story. And then we double down in the mid stage to do direct investing in the mid and late stage.

Lauren Weymouth: 24:16 Okay, got it. That's the secret sauce?

Matthew Le Merl...: 24:19 For us.

Lauren Weymouth: 24:19 Yeah.

Matthew Le Merl...: 24:19 , it took a long time to realize that early stage, you need to invest with the best investors. They're hard to find, hard to access. [00:24:30] You need to be highly diversified and you need to just selectively follow on invest, but only when all the signals tell you that's the right thing to do.

Lauren Weymouth: 24:39 It's, and it's your relationships as you're, you're using the network to really flush out, um, the good from the bad and-

Matthew Le Merl...: 24:46 Right.

Lauren Weymouth: 24:47 Yeah, that makes sense.

Matthew Le Merl...: 24:48 But the existential risk is so high as well. Failure is the norm in innovation and technology. And for your listeners, you know, you need to go eyes wide open into that. It doesn't matter whether you're an entrepreneur, [00:25:00] unfortunately, your, most of them will fail, or an investor, most of them will lose most of their money. And the, what you're trying to get into, if you will, are those very rare situations where one of the world's best entrepreneurs meets one of the w- world's best investors. And that is a very small subset of the total deal flow that's going on globally. So it's, it's a hard, hard challenge,

Lauren Weymouth: 25:30 [00:25:30] Magic making. kind of shifting gears a little bit. How can traditional financial institutions, with their vast infrastructure and regulatory burdens, effectively integrate blockchain without completely disrupting their core business?

Matthew Le Merl...: 25:47 What a great question and what an impossibility.

Lauren Weymouth: 25:49 (laughs).

Matthew Le Merl...: 25:51 (laughs  I was asked that question a lifetime ago at Google when I was helping Google, as a consultant. And they asked me the same question. when I was at Booz, which is another consulting, I was the joint leader of the global innovation and digital, uh, practices. And I think what I learned was that incumbent large companies are about innovation and almost all of the world's innovation is actually driven by small disruptive teams and companies. And there are multiple ways for large companies to play, [00:26:30] but trying to be the innovator themselves rarely succeeds. It doesn't mean it can never succeed, but it rarely succeeds.

26:38 So for large incumbents, I think that your best strategy is to monitor the entrepreneurial ecosystem, find the opportunities that begin to have scale, get associated with those projects and teams on their journey, make selective investments and partnerships and so [00:27:00] on, and then acquire before the inflection point of the value curve has gone up too steeply. So unfortunately, you're still gonna have to pay for the privilege of buying a team, and a company, and a products and services that are scaling, but you can still capture most of the value as you then scale it up globally 'cause you're an incumbent.

27:22 Um, if... When we see large companies trying to really drive innovation, um, [00:27:30] by creating their own programs and teams internally, they fail more than they succeed. we could unbundle why, I'll just give you one why that's very much in this space, b- banking and payments and blockchain. It's an interesting thought.

if you move money with a stablecoin, you can do it cheaply and easily and quickly, and it provides enormous [00:28:00] consumer benefit. Because in this timeframe, a Tether or a Circle can own 4 or 5% on the collateral, it's highly profitable, though that may, may not persist forever.

If you're a retailer,a Walmart or a Target or on Amazon, you might only make 10% return on sales. But you have to pay 2% roughly, uh, of that money. Two perce- 2% of sales, i.e. 25% of your [00:28:30] bottom line to the payment company that comes and makes the transaction at the 11th hour. Even though you had a global organization with hundreds of thousands of people that got you to that point where you are in 10% on sales, now you only make 8% of sales. So introducing a stablecoin into a large retailer makes the retailer more money.

28:52 But when you look at it through the lens of a bank, a bank makes actually quite a lot of money on its global payment activities. So [00:29:00] when they introduce a stablecoin, they diminish their own profitability. And that's the, the single biggest reason why they have not been very good innovators on the digitalization of money. It's because they make so much money on the friction that exists today. And I think that now they know they don't have a choice. So they're all saying, "Well, we're gonna embrace stablecoins and digitalization of payment rails, and other things". But the reality is it's very hard to be an incumbent [00:29:30] and disrupt yourself. General Motors killed the electrical vehicle, right? They did.

Lauren Weymouth: 29:36 Yeah.

Matthew Le Merl...: 29:37 big pharma did not create the genetic revolution. It was Amgen and Genentech and Chiron and others. They then bought them later. And I could keep on going.

Lauren Weymouth: 29:48 , it's interesting the way that you paint that picture about the consumer walking out with a good from Walmart and if Visa, MasterCard were issuing a stablecoin and it was cheaper than them charging [00:30:00] that 2%, 3% transaction fee, that's why you hear Visa, MasterCard are putting out a stablecoin.

Matthew Le Merl...: 30:05 That's right.

Lauren Weymouth: 30:06 We haven't seen it yet, but.

Matthew Le Merl...: 30:07 That's right.  it's also high corporate strategy, just to be clear. It isn't, it isn't just, um, inertia and momentum and intelligence, and, and so on. I mean, big companies have all of those things, but high corporate strategy says don't destroy your profit pool [00:30:30] before you need to. Now, I personally are much more of the view that large companies should always maximize consumer value. And if large companies really cared about maximizing consumer value, they would constantly be improving their products and services preemptively. But that's not how the world works. Most CEOs want to maximize shareholder value, and the best way to maximize shareholder value is often not to disrupt yourself [00:31:00] and, in fact, to resist innovation as long as possible,

Lauren Weymouth: 31:03 Well, that's how they keep their jobs. Yeah. And then we haven't even talked about how probably another reason why they're not getting involved right away is because there's not really regulatory clarity yet.

Matthew Le Merl...: 31:13 Great.

Lauren Weymouth: 31:14 And global policies are constantly shifting. And now in the US, we just introduced the GENIUS Act. We just did an episode on it last episode with a law professor. So check that out. Is this the critical piece of upcoming regulation that has the potential to either unlock a new wave of innovation or slightly hinder the growth of digital assets?

Matthew Le Merl...: 31:37 Thank you. It's a great question.  it is a almost a continuation of the last conversation. By definition, innovation does not fit the existing legislative and regulatory environment. Um, sometimes it does, but a lot of it doesn't. Because by definition, laws and regulations were fit for purpose for the past [00:32:00] and for the products and services that we have to date. So when we create something that we've never seen before, likely we're gonna disrupt and not be able to operate within that framework. That in financial services, it's even more true because we don't have global harmonization across all of the world's jurisdictions. So we have different rules and regulations in different, different jurisdictions. We have a fragmented global financial and commercial law, legal, and regulatory environment.

So [00:32:30] in the context of all of that, innovation arrives and it takes time appropriately for regulators and lawmakers to catch up. And we don't want them to, uh, you know, through an adverse process, stifle innovation because they tried to create, uh, regulation before they understood what the innovation was. So we're gonna have a gray zone. We're gonna have a gray zone as laws and regulations try and catch up with rapid change in innovation.

33:00 [00:33:00] Here we are 40 years later, we think we know the internet really we- really, really well, but we still haven't solved issues of privacy or the right to be forgotten or how to treat taxation and revenue generation for the internet globally. So that's 40, 50 years later and the legislators haven't caught up with those issues.

33:23 So now coming back to blockchain and payments, the, who can cope with regulatory [00:33:30] uncertainty? And the answer is no one really likes regulatory uncertainty. Entrepreneurs don't like it because they don't wanna build something that's then gonna be considered illegal and snuffed out. Investors don't like it because they don't like putting capital to work if they're unsure of the outcomes. Big companies don't like it 'cause they can't buy things and sell things if they're gonna be held accountable later.

33:55 So no one likes regulatory uncertainty, but the people who are able [00:34:00] to operate within it are the disruptive companies. They take risks, they try and build things, and the regulations catch up to some extent later. Uh, incumbents, large companies, they can't even enter the space if there's regulatory uncertainty. They've got too much at risk and too much at stake.

34:21 So in our industry, for four years, for some reason that none of us understand, the American administration tried [00:34:30] to not put constructive legal and regulatory policy on the table. In fact, they tried to kill our industry. We do not know why. There's no logic to it because our industry is so pro-consumer and so value creating.

34:48 That has begun to change very rapidly. The GENIUS Act does provide, uh, some clarity around something very specific, which is digitalized monies. The legislation [00:35:00] that recently passed that says the US will never have a central bank digital currency is actually a one minus legislation, 'cause what it actually says is it empowers the private sector to try and go forward with these innovations. So that was very positive too. The CLARITY Act is actually very important and it's now up for Senate review. It's sort of halfway through its process, if you will. Um, that provides market structure and it has to address [00:35:30] complicated issues like which things are monies, which things are commodities, which things are securities, and who's gonna provide oversight to which, and who is gonna set policies and laws around each. Um, and we haven't had that. And in America, that really matters because we fragment our, our oversight system into many, many pieces. So different people actually legislate monies, the commodities, the assets, securities. [00:36:00] Whereas in most of the world, it's a little bit more under one umbrella.

36:04 And then there's more to come. So by the time we get through version one, which is the GENUIS Act, the the CLARITY Act, the CBDC Act, the, the No More Check Point 2.0, thank you, uh, Nick Carter, uh, Act, um, we will then keep on going, because we are transitioning to a global digital economy [00:36:30] and ultimately that will require global harmonization of laws and regulations about the digitalization of communi- communications, content, and value. But I think we're 50 years away from that just to be clear. That's a long, long time to we get there.

Lauren Weymouth: 36:49 Different  regimes certainly are watching each other, right? And learn- learning from what's coming up in different places.

Matthew Le Merl...: 36:56 Yeah. I mean, that's a great point. I mean, I was talking to the Swiss regulator last year. And I said, you know, the number one thing I think you're gonna have to do the moment the US passes pro-innovation, pro-blockchain regulation is you're gonna have to relook at all the very good regulation you put into place a couple of years ago and harmonize it. And I knew, it was very interesting to me that almost straight away, uh, Japan came to Washington and said, "Let's talk about harmonizing our regulation around digital assets," and so on, because we're the [00:37:30] world's biggest economy, the world's biggest financial marketplaces. And once we establish rules and regulations, uh, the interoperability is required for the other financial centers around the world to participate with us. And so we are a leader. And that's why when we took four years-

Lauren Weymouth: 37:47 Yeah.

Matthew Le Merl...: 37:47 ... dragging our feet, we actually slowed the entire innovation movement down globally for this so very important innovation.

Lauren Weymouth: 37:55 That's right. That's right. you've mastered deal flow, you've been empowering in the innovators. I've been in the industry the last seven years, really focused on the education piece on, um, at level of university, helping students, you know, join the workforce and, um, adopt, you know, adopt blockchain in their projects and in their studies. Um, I've seen that you taught exponential technologies like blockchain and [00:38:30] AI at Singularity University. Now that's specifically executive education programs, but you have experience being faculty member teaching this material. Can you comment on how it all impacts traditional universities and the role of education?

Matthew Le Merl...: 38:44 Oh my gosh, there's so much in that question.

Lauren Weymouth: 38:46 (laughs).

Matthew Le Merl...: 38:46 Um, let's start off with the students just very briefly.when I was the head of strategy in CorpDev and then, um, uh, other things at Gap, Steve [00:39:00] Jobs was on our board and my CEO, Mickey Drexler, was on the Apple Board, this is a ancient history. And I got to hang out a little bit, not much, but a little bit with Steve Jobs. And, and he said a few things that I, I wanna say here right now.

39:14 One of them is, "Do you want to sell sugared water or do you want to change the world?" If you're a student right now, I think you should ask yourself that question. You have the opportunity to do anything you want to do. Do you want to sell sugared water or do you want [00:39:30] to change the world? Because we're in an inflection point where people like you are actually changing the world today. And if you actually look at the stars of this conversation, who are the entrepreneurs at the open AIs and the Ripples and the, uh, Tethers. And the people that back them, the VCs backing them, they are, they are young people. They're typically in their thirties and forties. They've made a decision. They want to change the world. So that's the first thing I'd say. Um, who [00:40:00] do you wanna be and how do you wanna show up in the world for the rest of your life?

40:04 The second thing, um, I would say is also (laughs) a Steve Jobs quote, which is, you know, um, "The mavericks are those people who think they can change the world, and they do." Um, and there's very few people like that. Most of us live in the status quo. We get fearful about losing what we have. We get fearful about the potential negative [00:40:30] consequences of change in the future. And we put our heads in the sand, like I think that's emus or ostriches, I forget which (laughs). Um, a few people don't think that way. They look at what's broken today and say, "I'm gonna make it better." And they look into the future and say, "I can imagine something so much better." And they have a very positive pro-innovation mindset. So that's the second point. If you, if you want to change the world, you're gonna have to have that pro-innovation mindset.

40:59 And then for all of [00:41:00] the teachers, um, please don't think that the model of learning that we have built our entire educational system on is gonna last much longer 'cause it isn't. It's been amazing and you've been amazing. And I've been a beneficiary of studying at Oxford and Stanford and with great professors. But that model is 500, 600 years old and it is unfit for purpose [00:41:30] in the modern age. Why? Because it was a model where information was scarce, it was held in libraries, only a few people knew it. And we had to travel them, to them physically to sit at their knee and learn it. And it was an apprentice model at best, or it was a broadcast model at worst.

41:51 Today, the information is globally available. Powerful tools exist that allow people to learn extremely well from anywhere [00:42:00] in the world. The next generation prefers to learn that way. And the, and those tools are all ramping up in terms of their power.

42:10 And so if you're a professor listening to this, I'd love to encourage you to lean into a digitally virtual AI-enabled model of education that's fit for the future. And in doing so, you are gonna have to disrupt yourselves (laughs) and give up [00:42:30] a lot of the things you're exceptionally good at because you no, not, you no longer needs to be good at the things you used to be good at.

Lauren Weymouth: 42:37 That is absolutely correct. And, and even also to the professors look to partner with industries who are active with universities, that's actually... I'm on Team Ripple Impact.

Matthew Le Merl...: 42:49 Right.

Lauren Weymouth: 42:49 I run virtual workshops for students to learn how to build on XRP Ledger. They can be doing it from their dorm rooms, every- anywhere in the world. And then [00:43:00] they go and they build.

Matthew Le Merl...: 43:00 Right.

Lauren Weymouth: 43:01 Right? And that's something that a lot of in industry players like Ripple are doing for free to engage with, um, you know, the students. And so that's available for teachers as another resource.

Matthew Le Merl...: 43:12 Yep.

Lauren Weymouth: 43:13 Right?

Matthew Le Merl...: 43:13 I mean, we really believe, here in Silicon Valley, there's a bit of a movement here where we actually believe quite soon we're gonna see the first single per- person unicorn. And that's an extreme, obviously. But a-

Lauren Weymouth: 43:25 What does that mean (laughs)?

Matthew Le Merl...: 43:27 Well, that means, that means a startup that would be worth a billion [00:43:30] or more where they only had one person, one human being in that company. That they were using AI and AI tools, and other things, to scale up a company where actually there's only one person in that company. Now, that's an extreme case. However, if you just look at how value is ramping up fast in the next wave of blockchain and AI companies with very small teams, it's remarkable. So Tether, just sort of go back to that example, Tether [00:44:00] profitability per person is probably the highest of any entity in the world. Now I said that, uh, it's possible OpenAI is getting there as well. Um, but Tether is, it's remarkable to me that they do so much with so few people. And so going back to the students listening, um, you need to really embrace tools and ways of doing things that are heavy compute and machine oriented. And I think you can do so much more, so much faster with your startups than anyone ever could before.

Lauren Weymouth: 44:37 Well, well, I have goosebumps and I hope our listeners have a lot to chew on. That's a wrap on another episode of All About Blockchain. Massive thank you to our incredible guest, Matthew Le Merle, blockchain thought leader and founder. I've enjoyed getting to know you as a leader in the space and a fellow alum. Go Oxford Blue.

Matthew Le Merl...: 44:55 Mm-hmm.

Lauren Weymouth: 44:55 Thank you for a wonderful conversation.

Matthew Le Merl...: 44:57 Thank you very much, Lauren. It was great to be here and happy [00:45:00] to come back anytime if there's some other topic worth talking about.

Lauren Weymouth: 45:03 I mean, we did talk about everything, from parallels between eras, integrating new technology, the future of venture capital, investor insights, even bringing education, development.

45:13 So to all of our listeners, thank you for tuning in and for being a part of our journey. If you enjoyed this conversation, please hit the subscribe button, leave us a five star review and share this episode with a friend. It really helps us bring more brilliant minds like Matthew onto the show. And if you have any questions about this episode [00:45:30] or ideas for the future episodes, please reach out to my ubri@ripple.com email. Until next time.