a16z Crypto Partner: Cryptocurrencies are no longer overthrowing the financial system, but instead dressing up in shirts and walking into Wall Street

Silicon Valley venture capital firm a16z crypto announced the completion of fundraising for its fifth crypto fund, totaling $2.2 billion. The fund will focus on areas such as stablecoins, on-chain finance, and AI agents.

a16z crypto, the cryptocurrency investment division under Silicon Valley venture capital firm Andreessen Horowitz, announced the closing of its fifth crypto fund, Crypto Fund 5, with a fundraising size of $2.2 billion. It will invest in stablecoins, on-chain finance, payments, lending, prediction markets, tokenized assets, and new infrastructure at the intersection of AI agents and blockchain. At the same time, a16z crypto has promoted CTO Eddy Lazzarin to general partner and formed a four-person GP team with Chris Dixon, Ali Yahya, and Guy Wuollet.

Crypto in 2017 was still crypto punks; by 2027 it’s putting on shirts and walking into Wall Street

In an interview released by a16z crypto, the four GPs offer a fairly clear assessment of this fundraising: the next phase of cryptocurrency will no longer make “overthrowing the existing financial system” the main narrative, but will instead return to more pragmatic products, compliance, and go-to-market strategies.

Ali Yahya describes that in 2017, crypto culture still strongly inherited the spirit of Bitcoin and crypto punks. At that time, the market believed that “code is law” was superior to government laws, and also believed that crypto systems would eventually build a fully parallel system that completely replaced traditional finance. But a decade later, that atmosphere has clearly changed.

Ali Yahya says that today, the industry places greater emphasis on “collaborating with existing systems rather than trying to overthrow them.” He believes that the most successful crypto founders of the next era will be those who value products and market expansion more, and are more pragmatic rather than ideology-driven. In other words, cryptocurrency is shifting from revolutionary slogans to business execution, and from “anti-establishment” to “integrating with the establishment.”

a16z crypto’s new GP, Guy Wuollet, describes this shift in more dramatic terms: cryptocurrency is entering the “collared shirt era,” meaning the era of wearing collared shirts. He says that in the past, crypto developers might have been writing smart contracts in basements wearing hoodies and slippers; but now, they wear shirts, suits, and ties, start meeting with major banks, and discuss whether blockchain should replace backend systems and core ledgers. For him, this is not surrender—it is proof that years of technology have finally entered mainstream adoption.

a16z founder: The fundamentals of the crypto industry are actually improving

In an interview, Chris Dixon, founder and managing partner of a16z crypto, points out that although the current crypto market prices and sentiment are on the low side, and some non-financial applications have not developed as expected, the industry’s fundamentals are actually improving. He specifically mentions that stablecoins have become the clearest mainstream use case: the global issuance size of stablecoins is about $300 billion, and trading volume can now be compared with major payment networks such as Visa.

Dixon believes that the growth curve of stablecoins is not like speculative trading, but more like the growth curve of a computing network or the internet. The key is that this growth is not highly correlated with crypto trading volume, indicating that their usage is shifting from speculative markets toward payments, remittances, savings, and cross-border finance.

He also links the explosion of stablecoins to clearer U.S. regulation. Dixon says that the stablecoin bill Genius Act passed by the U.S. last year provides a regulatory framework—on the one hand, it helps compliant entrepreneurs know where the rules are; on the other hand, it also helps consumers know whether the stablecoins they hold are truly backed by $1 reserves, whether issuers are audited, and whether there are risk controls. For the crypto industry that has experienced the collapses of Terra/Luna and FTX, this is a necessary condition for building trust.

Dixon further notes that companies such as Stripe have actively embraced stablecoins because stablecoins allow payment services to expand quickly from dozens of countries to more than 100 countries. He likens stablecoins to WhatsApp in the payments world: before WhatsApp, the global messaging network was cobbled together by different countries, telecom operators, and high fees; whereas WhatsApp built a global communication network in an internet-native way. Stablecoins are similar—in fact, they are a global network from day one.

In a16z crypto’s assessment, finance is not a retreat from crypto vision, but an entry point to a larger vision. Dixon says finance has become crypto’s “low-hanging fruit” because in many parts of the world, financial systems remain weak—especially in savings, payments, and cross-border remittances. User demand is clear, and existing experiences are poor, which means crypto infrastructure is more likely to demonstrate value.

His model is as follows: first, through financial use cases such as stocks, bonds, stablecoins, payments, and remittances, one billion people become daily or near-daily users of blockchain. After these people have already used wallets, on-chain infrastructure, and related services, providing adjacent services will become natural. In other words, finance is not the end point—it is the foundation of the crypto internet.

From DeFi to Wall Street: the value of on-chain finance becomes speed, capital liquidity, and 24/7 markets

In the interview, Guy Wuollet focuses on on-chain finance. He points out that after the rapid growth in stablecoin issuance, the market naturally needs new capital-formation and yield mechanisms: stablecoins need higher-yield investment opportunities, and they also need to become productive operational capital. Therefore, on-chain lending, credit markets, and related products in private credit are becoming very attractive directions for startups.

He specifically mentions problems that have emerged in the traditional private credit market in recent years, such as asset rehypothecation, redemption pressure, and maturity mismatch. In traditional finance, lenders need to confirm collateral rights through legal procedures such as UCC filing, but ensuring that the same asset has not been pledged multiple times is itself a complex issue. Blockchain’s verifiability, transparent settlement, and programmable processes give it an opportunity to rebuild parts of the credit market infrastructure.

To traditional financial institutions, the value of on-chain finance is not just the slogan of “decentralization,” but several more concrete elements: low latency, rapid capital movement, markets that are almost 24 hours a day with no downtime, and more clearly defined counterparty risk management. Wuollet believes that what the crypto community previously called “decentralization,” when translated into traditional finance language, is essentially the clearer definition of trust assumptions and counterparty risk.

He also mentions that perpetual contracts were originally a crypto-native product, but are now extending to traditional assets such as stocks, commodities, and foreign exchange. This means that the market structure built by the crypto industry over the past few years is no longer limited to internet tokens, and can be applied on top of high-quality traditional assets. More importantly, future new markets may be assumed to be built on-chain from the start—especially in areas where traditional finance has not been serving adequately, such as GPU, data center construction, power, energy, and emerging commodities markets.

AI agents will become economic actors, and stablecoins may become their payment rails

Another focus of the interview is the convergence of AI and cryptocurrency. Ali Yahya previously worked at Google Brain, and he openly acknowledges that AI and the crypto community have long been distant from each other, even completely opposite culturally. AI tends to concentrate computing power, data, and talent, building massive systems capable of seeing, learning, and reasoning; while cryptocurrency emphasizes individuals, the edge, free markets, and decentralizing power.

But he believes the two are converging quickly because the current financial system was not designed for AI agents. In the future, most transactions may no longer be executed directly by humans, but by AI agents on behalf of people or companies. If those transaction volumes grow quickly to 90%, 99%, or even 99.9% executed by agents, then ACH, SWIFT, and credit card networks may not be suitable underlying architectures.

Ali Yahya believes that stablecoins are almost free, programmable, and internet-native, which makes them especially suitable for enabling AI agents to evolve from “tools used by humans” into first-class economic actors within the financial system. For example, if an agent’s task is to help a user save monthly expenses, it will not care about credit card brands or preferences among existing payment networks—it will only look for the lowest-cost and highest-efficiency paths.

Eddy Lazzarin also adds that AI agents will reopen the imagination of “programmable money.” In the past, creating tools to operate wallets, call smart contracts, and sign transactions required substantial engineering capability; but now, users can collaborate with AI using natural language to generate programs that operate on-chain assets. When “programmable money” combines with “writing programs in just a few words,” money becomes something that can move “at the speed of language.”

This is also one of a16z crypto’s core bets for Fund 5: AI agents are not just chatbots or software proxies—they may gradually become economic entities that can pay, get paid, purchase compute, provide services, and even raise funding for themselves.

Privacy is the next main battleground: without privacy, salaries and company ledgers cannot be put on-chain

In the process of on-chain finance moving toward mainstream adoption, privacy is also viewed by a16z crypto as a key issue. Guy Wuollet says that currently most blockchains are almost completely public and transparent, and all transactions can be viewed by anyone. While this may be seen as a plus in early crypto communities, it will become a barrier when entering consumer and institutional scenarios.

He gives an example: no one wants their salary to be completely public, and no company wants its balance sheet and transaction details to be completely transparent. If blockchains require that level of openness, they cannot truly become mainstream financial infrastructure. Therefore, privacy is not an optional feature—it is a prerequisite for large-scale adoption of crypto finance.

Ali Yahya adds from a network effects perspective that as interoperability between different blockchains becomes easier, block space may gradually become commoditized. User and application states can migrate from one chain to another, reducing the defensibility of any single chain. But if data is encrypted, state migration becomes difficult, and privacy could increase switching costs—allowing chains with privacy capabilities to form stronger network effects.

On the technical path, he mentions that there are already multiple privacy solutions, including protecting transaction privacy through centralized or semi-centralized participants, trusted execution environments, and zero-knowledge proofs. Ali Yahya says that over the past decade, zero-knowledge cryptography has improved by about 10 to 100 times, giving blockchains the opportunity to solve both scalability and privacy issues at the same time. a16z crypto’s research team is also pushing zero-knowledge-related projects such as Jolt, aiming to make systems more scalable and more private.

a16z’s ten-year goal: one billion people use blockchain every day, and most financial activity is on-chain

Regarding what success looks like for Crypto Fund 5, the answers from the four GPs all point to the same thing: true large-scale adoption.

Ali Yahya says that in ten years, he hopes to see more than one billion people interacting with blockchain every day, directly or indirectly, and to see most financial activity around the world shift to the chain. He also lists transforming AI agents from human tools into first-class economic actors as one of the major outcomes that Fund 5 could drive.

Guy Wuollet’s answer leans more toward financial inclusion. He believes that even if cryptocurrency does nothing else, simply making it possible for every person on Earth to have a new bank account driven by USD-stablecoins would already have a huge impact. For people living in the U.S. or the First World, holding dollars, saving, and investing are taken for granted; but around the world, there are still billions of people who lack basic savings infrastructure. Stablecoin accounts could become these people’s first entry point into global finance.

Chris Dixon returns to a viewpoint he has long advocated in Read Write Own: the internet was originally open and decentralized, where anyone could start a business and publish products, but over time, traffic, data, and revenue gradually became concentrated among a small number of large platforms. AI may further intensify this concentration because model training is highly capital-intensive, and only a very small number of companies have enough compute, data, and funding.

Dixon believes that the only credible technology capable of countering this trend is cryptography and blockchain. It allows small entrepreneurs, consumers, enterprises, and agents to directly build market, payment, identity, and coordination mechanisms without being fully dependent on large platforms.

Over the past decade, the most common narrative in crypto has been anti-bank, anti-government, anti-Wall Street, and anti-platform monopoly. But in a16z crypto’s new narrative, crypto no longer needs to “overthrow” existing systems in order to prove itself. It can first become foundational infrastructure: payment networks, stablecoin accounts, on-chain credit markets, tokenized asset trading systems, AI agent payment rails, and underlying coordination for compute and energy markets.

In other words, cryptocurrency is moving from an ideological product to business infrastructure. This is also why Guy Wuollet’s so-called “collared shirt era” is so fitting: cryptocurrency hasn’t completely lost the spirit of crypto punks, but it is packaging that spirit in forms that banks, Wall Street, AI companies, and everyday users can adopt.

If the theme of the last crypto cycle was speculation, TGEs, DeFi, NFTs, and high-volatility assets, then a16z crypto’s bet for the next cycle is clearer: stablecoins bring people on-chain, on-chain finance retains capital, AI agents amplify transaction volume, privacy and zero-knowledge enable institutions to use it with confidence, and the true winners will be those entrepreneurs who no longer just talk about revolution, but can turn blockchain into everyday products.

• This article is reprinted with permission from: “Chain News”
• Original title: “Interview with the Four Partners at a16z Crypto: Cryptocurrency No Longer Overthrows the Financial System—It Puts on a Shirt and Walks into Wall Street”
• Original author: Neo