The Network State Podcast — Episode #34: Sean Neville

Date: January 16, 2026
Host: Balaji Srinivasan
Guest: Sean Neville (Co-founder of Circle, Katena)

Episode Overview

In this dynamic conversation, Balaji Srinivasan sits down with Sean Neville to reflect on the joint creation of USDC (USD Coin), the evolution of stablecoins, and how programmable money is setting the foundation for a machine-driven economy. They explore the technical, economic, and philosophical underpinnings of decentralized finance, the future of machine-to-machine payments, and Sean’s new venture, Katena, focused on enabling AI-driven financial agents. The discussion also bridges into the practical future of network states, digital communities, and how programmable trust reshapes society.

Key Discussion Points and Insights

1. Origins and Evolution of USDC

• Foundations and Vision:

  • Sean reflects on Circle’s early years and their central vision: democratizing and decentralizing global finance ([00:34]).

  • Stablecoins weren’t initially obvious: The need for a stable, internet-native representation of value only became clear around 2017.

    "The vision really hasn't wavered. The way that we've tried to execute on the vision obviously has had a lot of different sort of crisscrossing paths."
    — Sean Neville, [00:34]

• The Coinbase-Circle Partnership:

  • Balaji underscores the true teamwork and enduring impact of the partnership, emphasizing the skepticism stablecoins first faced ([01:25]).

  • Both sides saw USDC as an interoperable, infrastructure-level standard rather than a winner-take-all product.

    "A lot of people poo-pooed them and said, wow, your great innovation is putting a dollar on chain."
    — Balaji Srinivasan, [01:25]

• Consortium and Interoperability:

  • The emphasis was on building a standard—like HTTP for money—that no single vendor controlled, allowing multiple issuers ([03:30]-[04:05]).

  • Inspired by past web standard battles; the decision was against "Libra-style" huge consortiums, focusing instead on a few committed participants for speed and clarity.

    "The idea is just interoperable standards ... It can't be Circle dollars or Stripe or Coinbase dollars. Whatever it is, it's just dollars to people who are using it."
    — Sean Neville, [04:05]

• Libra, Revenue Models, and the ZIRP Era:

  • Comparison with Libra’s failed approach—too volatile, unsure price stability ([05:06]).

  • USDC was deliberately not structured as an ICO, allowing patient capital to slowly build utility for the ecosystem without short-term pressure for returns ([08:06]).

    "ICO investors are not patient ... By having patient capital on the balance sheet, we could go for years and years without worrying about any return in the short term."
    — Balaji Srinivasan, [08:46]

2. Technical and Regulatory Foundations

• Build vs. Buy vs. Partner:

  • On Coinbase's side, the decision to partner rather than build or acquire was rooted in shared values and the desire to decentralize ([09:48]).

    "I felt partner was the right approach because crypto's in like, I'm a, I think I, I like to be ... win-win people and, and, and there's more that can be done together."
    — Balaji Srinivasan, [09:48]

• Key Technical Decisions:

  • Security, audited smart contracts, and minimal code were crucial ("extremely correct" code to avoid smart contract exploits) ([13:59]).
  • USDC was backed 1:1 with off-chain dollars, resisting riskier or more complex models ([13:59]).

• Compliance Design:

  • One of the key regulatory innovations: Blacklists and transaction freezing (with warrant) rather than pre-KYC-whitelisting every on-chain address, keeping friction low and smart contract usability high ([13:59]).

    "If you had to KYC every address, you couldn't have a program generate 100 new addresses ... Too much friction."
    — Balaji Srinivasan, [13:59]

3. Unlocking the Machine Economy

• Katena and Machine-Native Money:

  • Sean transitions to his new venture, Katena, focusing on workflows where LLMs and agentic AI become economic actors needing to transact, hold, and manage money ([20:04]-[23:11]).

  • Stablecoins enable reliable, low-friction transactions between machines—a key for the coming wave of agentic, programmatic finance.

    "When you take a five to seven to nine party system and you add a couple more parties on the edges ... it's different than taking a stablecoin point to point transaction."
    — Sean Neville, [21:30]

• Vision for Agentic Finance:

  • Sean's strong claim: In the future, most financial transactions (and even returns generation) will be carried out by AI agents ([25:13]-[26:59]).

  • Ongoing debates about the autonomy and trust boundaries of these agents—Will they always act on a user’s behalf, or become truly autonomous economic participants?

    "We will have no need to ever execute a transaction ourselves. We will always be doing it through some form of personal or other AI."
    — Sean Neville, [26:51]

  • Balaji brings up early visions of machine-to-machine commerce (e.g., self-driving cars negotiating road priority), and both agree machine resources and infrastructure (e.g. compute resource auctions) may be the first mass use cases ([27:18], [35:18]).

4. Agent Registries, Trust, and Missing Primitives

• Discovery and Registration for Agents:

  • Current lack of standardized discovery for agents is a key hurdle—proposals like agent registries (akin to DNS or ENS for smart contracts) may emerge as critical infrastructure ([29:29]-[30:58]).

  • Building agent trust frameworks, certification, and identity has become a crucial area for Katena's open source projects ([31:11]).

    "The issue that people have with agentic workflows is ... reliability. How can you trust these things? Who's vouching for them?"
    — Sean Neville, [31:11]

5. AI's Limitations, Crypto's Role & The Layered Stack

• Complementary Roles:

  • Balaji offers the insight that where AI is probabilistic ("words"), crypto is deterministic ("actions"); cryptography remains immune to LLMs' statistical attacks ([48:01]).

    "Crypto is the actions and AI is the words in many ways. And the actions speak louder than words."
    — Balaji Srinivasan, [48:01]

• Shifting Tech Sentiment:

  • Market and cultural sentiment towards AI and crypto have flipped multiple times. Stablecoins have gained mainstream legitimacy, while AI faces new skepticism ([46:58]-[48:01]).

    "We would bend over backwards not to mention the fact that our agents were using stablecoins ... And it's completely flipped the other way now, where people have a lot of interest in stablecoins."
    — Sean Neville, [46:58]

6. Network States, Digital Communities, and Societal Transformation

• Physical World Crypto & Network States:

  • Balaji shares his work on physical-world crypto communities—e.g., building distinct societies as a digital-physical blend (e.g., DARP society off Singapore) ([42:22]).
  • Sean sees this as a natural evolution from our multi-community digital existence, foreshadowing "hyper-personalized, AI-driven banks" and physical communities designed for digital natives ([43:11]-[44:52]).

• The Trustless Trust Society:

  • Both explore the irony that a fully computationally enforced society may become highly trustworthy again, simply because fraud incentives are removed ([55:21]).

    "In some ways the society where everything is computational trust actually then loops around and becomes a high trust society again in some circumstances."
    — Balaji Srinivasan, [55:21]

• Imagining New Communities:

  • Balaji asks Sean: If he could start a new kind of Internet-native community, what would its core be? Sean focuses on hyper-personalization, transparency, and trust programmed in software—removing human arbitrariness ([45:43]).

    "For me, it's about hyper personalization, transparency and trust that doesn't require relying on other human beings. And it's all coded."
    — Sean Neville, [45:43]

Notable Quotes & Memorable Moments

• On Stablecoins’ Quiet Power

  • “We expected there to be multiple issuers ... all of whom participated in a consortium, even though they may be competing at other layers of the stack ... just interoperable standards.”
    — Sean Neville, [03:30]

• On Machine Economy’s Inflection Point

  • “In the future the only actors that we will trust with our money and our assets and the only actors that will be capable of generating competitive returns will be agentic.”
    — Sean Neville, [25:13]

• On AI Hype Cycles and Crypto's Determinism

  • "AI is probabilistic and crypto is deterministic ... crypto’s like a hard wall that can constrain and bound AI."
    — Balaji Srinivasan, [48:01]

• On Trust by Code

  • “Trust enforced by software is just a fundamental theme.”
    — Sean Neville, [45:43]

• On Community Evolution

  • "We're creating a new kind of global hyper personalized bank that is run entirely by AIs... that is enabled by stablecoins, the Internet, AI ... all of these things coming together."
    — Sean Neville, [44:52]

Timestamps for Major Segments

• [00:00-03:30] — The founding story of Circle, vision for global finance, the Circle-Coinbase partnership
• [03:30-05:06] — Stablecoins as a neutral standard; critiques of Libra and big consortium approaches
• [05:06-09:48] — Business models: why not an ICO, why stablecoins faced skepticism, and the strategic outline
• [09:48-13:08] — Coinbase’s decision-making: build/buy/partner, mutual respect, critical hires and speedy launch
• [13:59-16:50] — Stablecoin design choices: technical, security, banking compliance, and on-chain friction reduction
• [20:04-25:13] — Machine economy and the agentic future: From LLMs to real-time payments between AIs
• [27:18-31:05] — Real-world examples: from compute auctions to supply chain agent negotiations; the primitives missing for agent interaction
• [31:42-41:28] — Trust, identity, and risk in AI/agent-driven finance; building the foundational layers at Katena
• [42:22-44:52] — Balaji on physical world crypto, network states, and blending digital and real societies
• [45:43-48:01] — Sean’s ideal for new communities: trust and transparency enforced by software; changing sentiment in AI and crypto
• [48:01-55:21] — How AI and crypto are reciprocally defined, and how computational trust enables new societal models
• [55:21-end] — Wrapping up: thoughts on the vendor lock-in, achieving high-trust via code, and further invitations for collaboration at Katena

Closing

This episode offers a candid, deep dive into building digital money standards, the interplay between AI and programmable finance, and visionary takes on the network society emerging from this confluence. Both host and guest deliver hard-earned lessons and speculate provocatively about the future, leaving listeners with a clear view of the next frontier in crypto, AI, and digital community-building.

Learn more about Katena and reach out to Sean and his team at Katena Labs.