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

Silicon Valley Venture Capital firm a16z crypto announces the completion of a $2.2 billion fifth crypto fund. The fund will focus on stablecoins, on-chain finance, and AI agents.

The crypto investment division of Silicon Valley venture capital firm Andreessen Horowitz, a16z crypto, announces the closing of its fifth crypto fund, Crypto Fund 5, with a fundraising total of $2.2 billion. It will invest in stablecoins, on-chain finance, payments, lending, prediction markets, tokenized assets, as well as new infrastructure at the intersection of AI agents and blockchain. a16z crypto also promotes CTO Eddy Lazzarin to general partner, forming a four-person GP team with Chris Dixon, Ali Yahya, and Guy Wuollet.

In 2017, the crypto industry was still dominated by crypto punks; by 2027, it’s wearing shirts and entering Wall Street

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

Ali Yahya describes that in 2017, crypto culture still heavily inherited the spirit of Bitcoin and crypto punk ethos. At that time, the market believed “code is law” was superior to government laws, and also believed that crypto systems would eventually establish a parallel system fully replacing traditional finance. But ten years later, this atmosphere has clearly changed.

Ali Yahya states that today, the industry emphasizes “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 prioritize products, market expansion, and practicality over ideology. In other words, cryptocurrency is shifting from revolutionary slogans to business execution, from “anti-establishment” to “integrating with the system.”

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

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

Chris Dixon, founder and managing partner of a16z crypto, points out in an interview that although current crypto markets are undervalued and sentiment is low, 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, with about $300 billion issued globally, and trading volumes now comparable to major payment networks like Visa.

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

He also links the explosive growth of stablecoins to clearer regulation in the U.S. Dixon states that last year, the U.S. passed the Genius Act, providing a regulatory framework for stablecoins. This gives compliant startups clarity on rules, and also informs consumers whether the stablecoins they hold are backed by real dollars, and whether issuers are audited and have risk controls. For an industry that has experienced Terra/Luna and FTX collapses, this is a necessary step to build trust.

Dixon further notes that companies like Stripe are actively embracing stablecoins because they enable payment services to rapidly expand from dozens of countries to over a hundred. He compares stablecoins to WhatsApp in the payments world: before WhatsApp, global messaging networks were cobbled together by different countries, telecoms, and high fees; WhatsApp built a native internet-based global communication network. Similarly, stablecoins are a global network from day one.

In a16z crypto’s view, finance is not a retreat from the crypto vision but an entry point to a bigger vision. Dixon explains that finance is considered the “low-hanging fruit” because many financial systems worldwide remain weak, especially in savings, payments, and cross-border remittances. User demand is clear, and existing experiences are poor, making crypto infrastructure more likely to demonstrate value.

His model is: first, use financial applications like stocks, bonds, stablecoins, payments, and remittances to make a billion people everyday or near-everyday users of blockchain. Once these users have experienced wallets, on-chain infrastructure, and related services, providing adjacent services will be natural. In other words, finance is not the end goal but the foundation of the crypto internet.

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

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

He specifically mentions issues in traditional private credit markets in recent years, such as asset rehypothecation, redemption pressures, and maturity mismatches. In traditional finance, lenders need legal procedures like UCC filings to confirm collateral rights, but ensuring that the same asset isn’t pledged multiple times is complex. Blockchain’s verifiability, transparent settlement, and programmable processes offer opportunities to rebuild parts of credit market infrastructure.

In the eyes of traditional financial institutions, the value of on-chain finance is not just “decentralization” as a slogan, but more concrete elements: low latency, rapid capital movement, near 24/7 markets, and clearer counterparty risk management. Wuollet believes that what the crypto world calls “decentralization” can be better described in traditional finance terms as more explicit trust assumptions and counterparty risk.

He also mentions that perpetual contracts, originally a crypto-native product, have now extended to traditional assets like stocks, commodities, and forex. This indicates that the market structures built by the crypto industry over the past few years are no longer limited to digital tokens but can be applied to high-quality traditional assets. More importantly, future new markets may be inherently built on-chain, especially in areas underserved by traditional finance, such as GPU, data centers, electricity, energy, and new commodities markets.

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

Another key point in the interview is the intersection of AI and cryptocurrency. Ali Yahya, who previously worked at Google Brain, admits that AI and crypto communities have long been distant and culturally quite different. AI tends to concentrate computing power, data, and talent to build massive systems capable of seeing, learning, and reasoning about everything; crypto emphasizes individual sovereignty, edge computing, free markets, and decentralization.

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

Yahya argues that stablecoins, being nearly free, programmable, and internet-native, are ideal for enabling AI agents to evolve from “tools used by humans” into primary economic actors within the financial system. For example, if an agent’s task is to help a user save monthly expenses, it won’t care about credit card brands or existing payment networks but will seek the lowest-cost, most efficient route.

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

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 capable of making payments, receiving funds, purchasing computing power, providing services, and even fundraising for themselves.

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

As on-chain finance moves toward mainstream adoption, privacy is seen by a16z crypto as a key issue. Wuollet states that most blockchains today are almost entirely transparent, with all transactions visible to anyone. While this may have been an advantage in early crypto communities, it becomes a barrier for mainstream and institutional use.

He gives examples: no one wants their salary fully public, nor do companies want their balance sheets and transaction details fully transparent. If blockchains require this level of openness, they cannot become mainstream financial infrastructure. Therefore, privacy is not an add-on but a prerequisite for large-scale adoption of crypto finance.

Yahya adds from a network effects perspective that as interoperability between different blockchains improves, block space may 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, leading to stronger network effects for privacy-enabled chains.

On the technical front, he mentions existing privacy solutions, including trusted execution environments, zero-knowledge proofs, and centralized or semi-centralized privacy-preserving participants. He notes that advances in zero-knowledge cryptography over the past decade—by about 10 to 100 times—make it possible for blockchains to address both scalability and privacy simultaneously. a16z crypto’s research team is also pushing projects like Jolt, aiming to make systems more scalable and private.

a16z’s ten-year goal: one billion people using blockchain daily, most financial activities on-chain

Regarding what success looks like for Crypto Fund 5, the four GPs agree on one point: true large-scale adoption.

Ali Yahya hopes that in ten years, over a billion people will interact with blockchain daily, directly or indirectly, and that most global financial activity will have moved on-chain. He also sees AI agents transforming from tools into primary economic actors as a major achievement Fund 5 could help promote.

Guy Wuollet’s answer leans more toward financial inclusion. He believes that even if crypto does nothing else, just enabling every person on Earth to have a USD-stablecoin-driven new bank account would be a huge impact. For people in the U.S. or the First World, holding dollars, saving, and investing are natural; but billions worldwide lack basic savings infrastructure. Stablecoin accounts could be their first global financial entry point.

Chris Dixon returns to his long-standing thesis from “Read Write Own”: the internet was originally open, decentralized, and anyone could start a business or publish products, but over time, traffic, data, and revenue concentrated in a few large platforms. AI may further accelerate this centralization because training models is highly capital-intensive, accessible only to a few with enough compute, data, and funding.

He believes the only credible technology capable of countering this trend is cryptocurrency and blockchain. They enable small entrepreneurs, consumers, and agents to directly build markets, payments, identities, and coordination mechanisms without relying entirely on big platforms.

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

In other words, crypto is shifting from an ideological product to a foundational business infrastructure. That’s why Wuollet’s so-called “collared shirt era” is so fitting: crypto isn’t abandoning its crypto punk spirit entirely, but it’s packaging that spirit into forms that banks, Wall Street, AI companies, and everyday users can adopt.

If the last crypto cycle was about speculation, TGE, DeFi, NFTs, and high-volatility assets, a16z crypto’s bet for the next cycle is clearer: stablecoins bring people on-chain, on-chain finance retains capital, AI agents amplify trading volume, privacy and zero-knowledge enable institutional trust, and the real winners will be entrepreneurs who no longer just talk revolution but turn blockchain into everyday products.

• This article is reprinted with permission from: “Chain News”
• Original title: “Interview with a16z Crypto Partners: Cryptocurrency No Longer Overthrows Financial Systems, but Wears Shirts and Walks into Wall Street”
• Original author: Neo