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.

Silicon Valley venture capital firm Andreessen Horowitz’s crypto investment arm, a16z crypto, announced the close of its fifth crypto fund, Crypto Fund 5, raising $2.2 billion. The fund 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 is promoting 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 crypto-punk; by 2027, it’s wearing shirts and walking into Wall Street

In an interview released by a16z crypto, the four GPs gave a fairly clear assessment of this fundraising: the next phase of cryptocurrency won’t be centered on “overthrowing the existing financial system” as the main narrative anymore, but will return to more pragmatic products, compliance, and go-to-market.

Ali Yahya described that in 2017, crypto culture still strongly inherited the spirit of Bitcoin and crypto-punk. At the time, the market believed that “code is law” was better than government law, and that crypto systems would eventually establish a parallel ecosystem that completely replaced traditional finance. But a decade later, this atmosphere has clearly changed.

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

a16z crypto’s newly appointed GP Guy Wuollet described this shift in more dramatic terms: cryptocurrency is entering the “collared shirt era,” meaning the era of wearing collared shirts. He said that in the past, crypto developers might have been writing smart contracts in hoodies and flip-flops in basements; but now, they wear shirts, suits, and ties, and start holding meetings with major banks to discuss whether blockchain should replace back-end systems and core ledgers. For him, this isn’t surrender—it’s proof that years of technology are finally entering 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, pointed out that although the current crypto market prices and sentiment are low, and some non-financial applications have not developed as expected, the industry’s fundamentals are actually improving. He specifically mentioned that stablecoins have become the clearest mainstream use case: the global stablecoin issuance is about $300 billion, and trading volume is already comparable to major payment networks like Visa.

Dixon believes the growth curve of stablecoins doesn’t resemble speculative trading; it’s more like the growth curve of a computing network or the internet network. The key is that this growth isn’t highly correlated with crypto trading volume, indicating that their use is shifting away from speculative markets toward payments, remittances, savings, and cross-border finance.

He also linked the surge in stablecoins to clearer U.S. regulation. Dixon said that the stablecoin law passed in the United States last year, the Genius Act, provides a regulatory framework. On one hand, it helps compliant founders know where the rules are; on the other, it helps consumers know whether there really is a $1 reserve behind the stablecoins they hold, whether issuers have been audited, and how risk is controlled. For the crypto industry that has experienced the collapses of Terra/Luna and FTX, these are necessary conditions to build trust.

Dixon further noted that companies like Stripe have actively embraced stablecoins, because stablecoins allow payment services to expand quickly from dozens of countries to more than 100 countries. He compared stablecoins to WhatsApp in the payments world: before WhatsApp appeared, the global SMS network was cobbled together from different countries, telecom operators, and high fees; while WhatsApp built a global communications network in a native way over the internet. Stablecoins are similar—it’s a global network from day one.

In a16z crypto’s view, finance isn’t a retreat from the crypto vision; it’s an entry point to a larger vision. Dixon said that finance becomes crypto’s “low-hanging fruit” because financial systems in many parts of the world are still weak—especially in savings, payments, and cross-border remittances—where user demand is clear and existing experiences are poor, making it easier for crypto infrastructure to demonstrate value.

His model is: first, by using financial purposes such as stocks, bonds, stablecoins, payments, and remittances, one billion people become daily or near-daily users of blockchain. Once these people have already used wallets, on-chain infrastructure, and related services, providing adjacent services becomes natural. In other words, finance isn’t the endpoint; it’s 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 focused on on-chain finance. He pointed out that after stablecoin issuance grows rapidly, the market naturally needs new capital formation and yield mechanisms: stablecoins need investment opportunities with higher yields, and they also need to become productive operating capital. Therefore, on-chain lending, credit markets, and products related to private credit are becoming very attractive directions for startups.

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

In the eyes of traditional financial institutions, the value of on-chain finance isn’t just the slogan “decentralization,” but several more concrete elements: low latency, capital that can move quickly, markets that are almost 24 hours a day all year round, and more explicit counterparty risk management. Wuollet believes that what the crypto community has called “decentralization” can, in fact, be translated—if you use traditional finance language—into more clearly defined trust assumptions and counterparty risk.

He also mentioned that perpetual contracts were originally crypto-native products, but they have now extended to traditional assets such as stocks, commodities, and foreign exchange. This indicates that the market structures built by the crypto industry over the past few years are no longer only applicable to internet tokens, but can also be applied on top of high-quality traditional assets. More importantly, future new markets may be built on-chain by default, especially in areas where traditional finance hasn’t been well served—for example, GPU, data center construction, electricity, energy, and new commodities markets.

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

Another key point in the interview is the intersection of AI and cryptocurrency. Ali Yahya previously worked at Google Brain. He candidly admitted that AI and crypto communities have long been distant from each other, even entirely opposite culturally. AI tends to concentrate computing power, data, and talent to build massive systems that can see, learn, and reason; cryptocurrency, on the other hand, emphasizes individuals, the edge, free markets, and power decentralization.

But he believes the two are converging quickly, because the existing financial system wasn’t designed for AI agents. In the future, most transactions may no longer be carried out by humans themselves, but by AI agents acting on behalf of humans or companies. If transaction volumes grow quickly to 90%, 99%, or even 99.9% executed by agents, then ACH, SWIFT, and credit card networks may not be appropriate underlying infrastructure.

Ali Yahya believes that stablecoins are almost free, programmable, and internet-native, which makes them well-suited for enabling AI agents to evolve from “tools used by humans” into first-class economic actors within financial systems. For example, if an agent’s task is to help users save monthly expenses, it won’t care about credit card brands or preferences among existing payment networks—it will only look for the lowest-cost, most efficient path.

Eddy Lazzarin also added that AI agents will reopen the imagination of “programmable money.” In the past, building tools that can operate wallets, call smart contracts, and sign transactions required substantial engineering capabilities; but now, users can collaborate with AI using natural language to generate the code that operates on-chain assets. When “programmable money” combines with “writing code in 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—over time, they may become economic entities capable of making payments, receiving funds, purchasing computing power, providing services, and even raising funding for themselves.

Privacy is the next main battlefield: without privacy, salaries and company ledgers can’t be put on-chain

As on-chain finance moves toward mainstream adoption, privacy is also viewed by a16z crypto as a key issue. Guy Wuollet said that currently, most blockchains are almost entirely open and transparent, and all transactions can be viewed by anyone. While this might have been considered a benefit in early crypto communities, it becomes a barrier when entering mass-market and institutional scenarios.

He gave examples: no one wants their salary to be fully public, and no company wants its balance sheet and transaction details to be completely transparent. If a blockchain requires that level of openness, it can’t truly become mainstream financial infrastructure. Therefore, privacy isn’t an added feature—it’s a prerequisite for large-scale adoption of crypto finance.

Ali Yahya added from a network effects perspective that as interoperability between different blockchains becomes easier, block space may gradually become commoditized. Users and application states can migrate from one chain to another, reducing the defensiveness of any single chain. But if data is encrypted, state migration becomes difficult; privacy could then increase switching costs, strengthening network effects for chains that have privacy capabilities.

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

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

Regarding what counts as success for Crypto Fund 5, the four GPs all point to the same thing: truly large-scale adoption.

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

Guy Wuollet’s answer leans more toward financial inclusion. He believes that even if cryptocurrency does nothing else, just enabling every person on Earth to have a new bank account powered by USD stablecoins would already create a huge impact. For people living in the U.S. or the First World, holding dollars, saving, and investing are taken for granted; but globally, there are still billions of people without basic savings infrastructure. Stablecoin accounts could become these people’s first global entry point to finance.

Chris Dixon returned to the viewpoint he has long advocated in Read Write Own: the internet was originally an open, decentralized network where anyone could start a business and publish products, but later, traffic, data, and earnings 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 computing power, data, and funding.

Dixon believes that the only credible technology capable of countering this kind of centralization trend today is cryptocurrency and blockchain technology. It allows small entrepreneurs, consumers, companies, and agents to directly build mechanisms for markets, payments, identity, and coordination 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, cryptocurrency no longer needs to “overthrow” existing systems to prove itself. It can start by becoming foundational infrastructure for payment networks, stablecoin accounts, on-chain credit markets, tokenized asset trading systems, AI agent payment rails, and the underlying coordination technology for computing and energy markets.

In other words, cryptocurrency is shifting from an ideological product to commercial infrastructure. That’s also why the “collared shirt era” described by Guy Wuollet is so fitting: cryptocurrency hasn’t fully lost the spirit of crypto-punk, but it is packaging that spirit into forms that banks, Wall Street, AI companies, and everyday users can adopt.

If the themes of the previous crypto cycle were 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 trading volume, privacy and zero-knowledge enable institutions to use it with confidence, and the real 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 a16z Crypto Partners: Cryptocurrency No Longer Overthrows the Financial System, But Wears Shirts and Walks into Wall Street》
• Original author: Neo