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Aurornis
YC, like most incubators, has always encouraged their companies to use products and services from other companies in their portfolio.
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.
latexr
> YC, like most incubators, has always encouraged their companies to use products and services from other companies in their portfolio.
Advising unproven risky businesses to depend on other unproven risky businesses? Doesn’t that just increase the likelihood that something goes wrong?
Aurornis
> Advising unproven risky businesses to depend on other unproven risky businesses?
Read carefully: They’re not actually advising that startups prefer it. They’re allowing it as an option.
It doesn’t mean that it will actually be used. They just don’t want to appear like they’re avoiding the companies they’re funding. It’s a bad look.
jazzyjackson
Does anyone remember being voluntold to use Skiff for email and calendar, instead of a product that actually handles timezones in event invites?
I'm convinced the point of YC must be something other than launching successful businesses
Nevermark
Would you consider it risky for a startup to use its own product?
I would consider that a risk decreaser, because the loop creates a stronger fit signal.
Even more powerful, since across a cohort the encouragement is N-way, or really N^2-way, it actually lowers risk on average the more startups act as each others’ early customers.
And co-adopters benefit from getting unusually responsive suppliers with a strong indirect stake in mutual success.
Encourage isnt a requirement. Adopt only if it makes sense.
remus
From the POV of YC, they don't mind too much if it is a bit risky for any given individual company if it increases the legitimacy and stability of their portfolio as a whole.
direwolf20
The already 99.9% likelihood?
onion2k
YC, like most incubators, has always encouraged their companies to use products and services from other companies in their portfolio.
Are you saying founders don't mount an FTP account using curlftpfs and access it using SVN?
7e
But what advantages do stablecoins have?
toomim
Faster and cheaper transactions that don't get locked up by the whims of a bureaucracy. They continue to operate on non-business days.
luke5441
Seigniorage accrues to private entities instead of the state, enriching the owners of those private entities rather than everyone in the state that issues the currency.
nivertech
> Why do stablecoins exist at all?
For states:
They quietly inflate the money supply by forking fiat, achieving monetary base expansion without the political cost of explicit money creation
For issuers:
They convert user deposits into a private mint: risk-free interest on collateralized reserves, with none of the upside shared with holders
For users:
For everyone but the unbanked & criminals, stablecoins are strictly inferior money surrogate: no yield, no guarantees, and no recourse
baxtr
I don’t think that matters.
It’s a sign of commitment to something they’ve invested in as OPs says.
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an0malous
It's been like 3 years since Silicon Valley Bank got a bailout because a bunch of startups put their money in a bank that wasn't guarded against economist instability.
csmpltn
Like a pyramid scheme?
factorialboy
Relevant question: How many YCombinator portfolio companies issue stable coins.
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)
blitzar
> What's the best way to invest all the money our company just raised?
You should invest in some YC startups with your YC investment money.
BLKNSLVR
It does seem ironic that a startup would immediately pivot to devoting some of its precious time and attention to becoming a hedge fund just as they've got the funding for their 'startup idea'. On the other hand, any big whack of cash should have an optimisation plan, lest it be wasted. Does YC provide templates?
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?
wmf
Just a money market account or something (e.g. https://mercury.com/treasury ).
Also X=Y for almost all startups.
fakedang
The point is, treasury accounts are not designed to manage crypto. So that's another layer of money management that startups have to deal with, when they could simply ignore it using a treasury account.
But of course, YC being YC will fund another startup which will help other startups manage their stablecoin portfolios...
Also note that in most jurisdictions, you cannot pay employees with crypto, stable coins or not. Nor can you pay suppliers. Or AWS/GCP/Azure.
This is literally a textbook example of, in YC's words, a solution in search of a problem.
blitzar
Is there no treasury desk at YC that takes care of this for everyone?!
Seems sub optimal to drop millions into a founders bank account for couple of years runway.
morpheuskafka
I agree, if you just want to not "waste" the cash while it's sitting, keep it very simple with something like T bills or, if you don't need it immediately, maybe a total market fund.
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.
robinhouston
> if you don't need it immediately, maybe a total market fund
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.
duxup
Agreed. I would think placing it in something more conservative would be a better choice. Presumably the company will want those funds available.
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sharperguy
Not all stablecoins are intended as investments. For many it's just a way to send money internationally without dealing with the SWIFT system, waiting periods, banks losing payments etc.
wmf
Stablecoins make a lot of sense in countries like Argentina where the national currency is a shitcoin. But YC doesn't fund startups in Argentina. Stablecoins can also be used to pay remote employees but that should probably go through an employer of record so that people aren't paid under the table. This sounds like more crypto for the sake of crypto.
sigmar
Argentina got there with huge tariffs and excessive spending. Good thing the US would never do crazy stuff like that, right? Also the US government is currently debasing USD to increase exports as well as instituting currency controls. There's lots of reasons to be concerned about relying on USD.
raincole
FYI, when people talk about stablecoins, they usually mean fiat-backed stablecoins, which are coins that are expected to maintain the same exchange rate against fiat currencies, and which is usually just USD. Some literally have 'USD' in their names.
> 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.
sigmar
okay. you realize USDC can be swapped to other currencies in minutes? Do you think Y comb expects founders to just hold the USDC permanently?
epolanski
Will never understand why the US is so fixated with exports and trade balance.
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?
SeanAnderson
but stablecoins are usually pegged to the dollar, right?
no_wizard
I'm no fan of the current US administration, however I have questions about this.
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.
stephen_g
Argentina has debt in foreign denominated bonds though - the US (and UK, Japan, Canada, Australia, NZ, etc.) don't, only issuing bonds in their own currency, which makes a massive difference.
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.
morpheuskafka
Right, it would make a lot of sense for international founders, except that YC already requires them to have a company in one of a few countries (US, Canada, Seychelles, maybe a couple more?) and thus would otherwise be receiving it in USD or possibly another stable currency and storing it in a bank account there.
nemild
The first wave of stablecoins isn't replacing fiat currency, but replacing money movement protocols.
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.
mothballed
On face I don't see why startups would oppose to paying people under the table unless they just have a dogmatic adherence to the law. Like anything, they are likely to do a cost/risk analysis, which could change wildly depending on the context of the remote employee.
arbol
I think people are maybe missing a key development with stable coins recently. They can be used by AI agents to pay for access to protected API endpoints or websites. The http 402 status endpoint is finally being utilised, years after it's creation. Ycombinator has a lot of AI based startups and they are given unlimited tokens.
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.
codeflo
Why the hell would you need a blockchain for automatic payments? Bots that performed financial transactions existed long before “crypto”.
direwolf20
The ordinary financial system is constrained by a lot of regulation and it won't let an AI open an account.
BoppreH
Good, KYC exists for a reason. Why does AI need to open an account, anyway? Just give it a debit card with a limit, not a whole new account and contract with a bank.
Spooky23
How unreasonable that I can’t make my computer pretend to be a fiduciary.
Those awful regulations won’t let me say the “computer ate my homework”. Imagine.
utopiah
I fail to see the use case where it's useful. I understand how it works and what it might enable but typically I want to cherry pick my API because I trust the source and their pricing (as here we are covering only paid for services).
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
?
nemild
(On the small team that helped create x402)
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.
utopiah
> great for micropayments globally
My personal Website supported WebMonetization (details https://webmonetization.org ) for more than 5 years already so no need to convince me about that, I agree. I also believe one could just as easily have a funding.md with an IBAN and structured communication to make the equivalent.
Anyway that's beside the point, what I still don't get is a use case without or without AI according to the constraints I listed before.
arbol
Training data for LLMs immediately springs to mind. They've had a free pass so far but there have been numerous threads on HN talking about server costs ramping up. People are creating zip bombs etc. to combat the LLM companies. Artists are not happy about content being ripped off.
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.
luke5441
Is there also an endpoint to get invoices for tax and accounting purposes?
testfrequency
Sir, this is a Wendy’s
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wslh
Automatic payments for AI seems like a completely dangerous wormhole for hacks. In the line of smart contracts security but with the indetermination of AI.
emsign
So they get unlimited tokens and how is that limiting their access and usage exactly? Who's paying the bills with real money?
arbol
The unlimited tokens thing is a sign that YC are expecting all their startups to integrate AI as a core part of their product. It seems like a natural progression for AI to start purchasing things autonomously. My bet is that YC also think this and are building tech that can do this with stable coin - "AI shopping" regimes.
YC are presumably paying for the usage with fiat.
KnuthIsGod
Sounds like a camouflaged IQ test for the founders...
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.
j2kun
As with all things cryptocurrency, the goal is to bypass financial regulations and external scrutiny.
groundzeros2015
By putting it on a realtime auditable database available to the public?
AmbroseBierce
A small amount of plausible deniability while they can move to pocket someone in congress and elsewhere to make it fully legal.
rchaud
How do you propose auditing an anonymous alphanumeric wallet address?
rglover
"Ask for forgiveness, not permission."
transitorykris
This isn't meant to be cynical. But, two of YC's success stories, Stripe and Coinbase, has a stable coin product.
wmf
Stablecoins have their uses. I'm not saying never touch crypto. But the question is what is the point of stablecoins in VC funding specifically? People don't seem to have good answers.
rtpg
YC companies are constantly spending the money they get from YC right? Why get money, then put it in some stablecoin, only to then immediately cash out on salaries or whatever?
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.
theyregr8
This only makes sense to YC, to try and prop up interest in digital assets they heavily inveterate in.
The majority of humans are losing interest in digital ephemera South Park-WoW guys are desperate sell them on, otherwise South Park-WoW guy might have to work to live not just shill hallucinations like a priest.
TacticalCoder
One of the biggest YC success story is Coinbase. It has literally got "coin" in its name.
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.
PlatoIsADisease
If you rejected economic orthodoxy and bought Bitcoin/Gold over the last.... decade or so... you won over the economic orthodox believers.
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).
IsTom
Bitcoin is completely removed from fundamentals and if there's a major sentiment shift it will be race to the bottom to sell first or lose more money.
UqWBcuFx6NV4r
Indisputable evidence that YC loves smelling its own farts. Pure absurdity. America truly is reaping what it’s sowing.
catlikesshrimp
I hope we aren't too close to "territorial currencies" where each feudal lord was authorized (or not forbidden) to mint his own currency, which couldn't be carried over the next feud. Think awarded "miles" by your credit card, or tickets in a games center.
https://ndl.ethernet.edu.et/bitstream/123456789/41452/1/112....
mandevil
During the Free Banking era of US history (from when Andrew Jackson killed the 2nd National Bank until the Civil War, roughly 1837-1863) essentially every company that could get their state to give them a bank charter (very very poorly regulated) could issue its own paper notes that were treated as currency, with the very poor state regulation alone responsible for ensuring that they didn't print more notes than they had specie to back up.
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.
palmotea
> 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.
That sounds like a libertarian paradise. Sign us all up!
direwolf20
I don't see how this relates to that.
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.
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b40d-48b2-979e
You know what else entitles you to two tons of lumber? Cash in the amount of two tons of lumber. That transaction even goes into a database for the business reporting.
direwolf20
That relies on a third party to maintain the value of the currency. Maybe I'd prefer to minimise my dependence on third parties. The crypto ecosystem makes it much easier to trade six cows for two tons of lumber and offload all of the exchange risk to speculators. It still can't enforce the physical exchange of goods, but it can atomically negotiate a swap from anything to anything through as many intermediaries as required. With a suitable transaction fee — which may come out of the transaction inputs.
A cryptocurrency system can negotiate that my six cow NFTs (which are not jpegs, I guarantee they are exchangeable for cows) for two Ethereum, of which 0.05 is taken as a fee and 1.95 flows on to Uniswap to buy Home Depot coin which buys two tonnes of lumber at a specific location and time. Except oh dear — Home Depot only trades on Polygon. Well then my 1.95 ether is bridged to Polygon where my 1.94 wrapped ether is traded for 9999999 POL and then for Home Depot coins. Or I buy wrapped Home Depot coins atomically on Ethereum and then unwrap them back to Polygon.
Crucially it all happens automatically.
That infra doesn't exist since cows and lumber aren't being traded on a blockchain, but it's the kind of thing that could be enabled.
Since I only hold ETH, WETH and POL during the transaction, their absolute value doesn't matter.
downrightmike
Company towns, company money
wahnfrieden
Epstein was kicking around that idea in some of his newly released emails
throw03172019
If they aren’t a crypto startup where it’s normal to pay others in stable coins, what is the benefit?
nemild
Fast, cheap money movement globally (compared to wire or ACH in US).
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.
nailer
Axium (YC W25) hit $100M revenue in 4-5 months, making it the fastest YC company to that milestone. Startups like that are important to YC.
wmf
How do they use stablecoins?
michaelt
Axiom's pitch is "Trade memecoins, perpetuals, and earn yield" [1] so presumably they've hired a load of cryptocurrency-loving developers, and are eager to pay them in cryptocurrency.
Of course, given that the grandparent said "If they aren’t a crypto startup" - Axiom clearly doesn't apply.
verdverm
Circular funding / money flows
YC -> Circle -> Coinbase -> YC
cobbal
Ohhhh... So that's why it's called Y combinator.
JohnTHaller
Hyping crypto and "stable" coins
daveguy
Yup. That's it. Because people are realizing crypto isn't worth the effort to support malware authors, money launderers, and North Korea's nuclear program.
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.
fogzen
“Stablecoins is one of the key pillars for us,” Dalal said, referring to one of the areas where Y Combinator would like to see more startup ideas. “So we just want to live and breathe that as well.”
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.”
tehjoker
I guess this can make sense if the startup is doing crypto, otherwise it seems like financial friction. That said, I believe the entire crypto ecosystem is just a giant scam.
nemild
Beyond crypto teams, we're seeing increasing use cases for more teams to use stablecoins to pay. For example, both Gusto and Deel (YC teams) are using stablecoins to offer worldwide payouts.
Here's Gusto's CTO: https://x.com/edawerd/status/2018785968669815011
tehjoker
Interesting. International payments are one of the few use cases that somewhat align with cryptocurrency's underlying value proposition of censorship resistant currency.
factorialboy
Relevant question: How many YCombinator portfolio companies issue stable coins. 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)
ddtaylor
YC may not expecting USD to be stable on it's own.
epolanski
Isn't the whole point of stable coins to:
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.
jszymborski
I imagine the stablecoins they plan on distributing will be pegged to the USD.
arbol
Maybe they'll do a pot of stable currencies to protect against USD devaluation
thinkingkong
Feels like step 1 to providing liqudity further down the toad. Also opening investment to “unqualified” investors. It never made sense that you could buy crypto, buy multiple homes, but sinking 10k into a friends startup was somehow regulated.
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This is intersting.
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.