In 2018, when Bitcoin was trading around $4,000 and most Americans, at least, thought cryptocurrency was a fad, Katie Haun found herself on a debate stage in Mexico City opposite Paul Krugman, the Nobel Prize-winning economist. As Krugman focused on Bitcoin’s wild price swings, Haun steered the conversation toward something else — stablecoins.

“Stablecoins are really interesting and really important to this ecosystem to hedge against that volatility,” she argued on stage, explaining how digital tokens pegged to the U.S. dollar could offer the benefits of blockchain technology without the ups and downs of traditional cryptocurrencies.

Krugman dismissed the idea entirely.

It wasn’t exactly a turning point in Haun’s career, but it was one moment among others that have helped define it. A former federal prosecutor, Haun brings an unusual background to crypto investing, having spent over a decade investigating financial crimes and creating the government’s first cryptocurrency task force. After becoming the first female partner at Andreessen Horowitz in 2018 and co-leading its crypto funds, she founded Haun Ventures in 2022 with over $1.5 billion in assets under management.

Hanging her own shingle hasn’t been without its complexities. Despite her role at a16z and the industry connections that came with it, the two haven’t publicly co-invested in anything since shortly after she launched her fund, and Haun stepped down from Coinbase’s board last year while Marc Andreessen remains a director.

When asked Wednesday night at TechCrunch’s StrictlyVC event about her relationship with Andreessen Horowitz, she downplayed any potential friction while acknowledging they aren’t collaborators exactly. “There’s no ‘gentleman’s agreement,’” she said, echoing this editor’s question about whether there’s any understanding to avoid competing with her former employer. “In fact, I still talk to Andreessen Horowitz. You’re right that we haven’t really done any deals together of late.” 

The apparent lack of co-investment could reflect the cutthroat industry or the challenges associated with leaving one of Silicon Valley’s most prominent firms to compete directly with former colleagues. Whatever the case, Haun is now charting her own course, and at the heart of it is stablecoins, which are cryptocurrencies designed to maintain a stable value by being pegged to traditional assets like the U.S. dollar. 

Unlike Bitcoin or Ethereum, which can swing wildly in value, stablecoins like Circle’s USDC or Tether’s USDT are meant to trade at exactly $1, creating a digital representation of traditional currency that can move on blockchain networks. 

Indeed, fast-forward to today, and Haun’s belief in stablecoins looks increasingly prescient. Stablecoins — which barely existed in 2015 — now represent a quarter of a trillion dollars in value. They’ve become the 14th largest holder of U.S. Treasuries globally. Reportedly, for the first time last year, stablecoin transaction volume exceeded Visa’s.

“I think people who looked at stablecoins a few years ago thought, what is the value prop?” Haun said Wednesday night. “You’ve asked me this before. You said, ‘Why do I need stablecoins?’ And I said, “I refer to this as an ‘If it works for me, it works for everyone’ problem.”

In reality, for most Americans, the existing financial system works reasonably well. We have Venmo, bank accounts, credit cards. But Haun, drawing on her prosecutor’s understanding of global financial systems, says she has long been aware that the U.S. experience isn’t universal.

In countries with unstable currencies or limited banking infrastructure, stablecoins offer something unique, she argues, which is instant access to stable, dollar-denominated value that can be sent anywhere in the world for pennies. “People in Turkey don’t think of Tether as a cryptocurrency,” she said Wednesday, “They think of Tether as money.” 

The technology has evolved dramatically since those early debates, certainly. Stablecoins once cost $12 to send internationally. And Circle says its USDC stablecoin is fully backed one-to-one by dollars held in JP Morgan bank accounts and audited by Big Four accounting firms.

Little wonder the corporate world is taking notice in a big way. Walmart and Amazon are reportedly exploring stablecoins, as are other goliaths like Uber, Apple, and Airbnb. The reason is simple economics. Stablecoins provide a way to move the value of U.S. dollars using cryptocurrency rails instead of traditional banking infrastructure, potentially saving these retail-heavy companies billions in processing fees.

But the shift has critics worried about economic chaos. While Circle and Tether are committed to having enough reserves to support their tokens, unlike traditional banks, there’s no insured government protection behind these reserves. Relatedly, if major corporations can issue their own currencies, what happens to monetary policy and banking regulation?

The concerns run deeper than just economic disruption. Not all stablecoins are created equal, and many lack the backing and oversight that companies like Circle provide. While well-regulated stablecoins like USDC are backed by actual dollars in U.S. Treasury securities, others operate with less transparency or rely on complex algorithmic mechanisms that have proven vulnerable to collapse. (TerraUSD has had the most specular crash to date, wiping out $60 billion in value when it nosedived.)

Corruption concerns in particular came into sharp focus recently when President Donald Trump’s family issued its own stablecoin, a move that highlighted potential conflicts of interest in an industry where political influence can directly impact market value and regulatory outcomes.

These concerns came to a head as Congress debated the GENIUS Act, legislation that would create a federal framework for stablecoin regulation. The bill passed the Senate early last week with bipartisan support, with 14 Democrats crossing party lines to support it. It now awaits a House vote before potentially reaching the president’s desk.

But Senator Elizabeth Warren, the ranking member on the Senate Banking Committee, has been particularly vocal in her opposition, calling the legislation a “superhighway for Donald Trump’s corruption.” Her criticism centers on a notable gap in the bill: while it prohibits members of Congress and senior executive branch officials from issuing stablecoin products, it says nothing about their family members.

Asked about Warren’s concerns on Wednesday night, Haun practically rolled her eyes. “I think it’s really ironic that Elizabeth Warren or other Democrats who do call this corruption are not running to pass crypto legislation,” she said. “Had there been rules of the road in place [already], there would have been a framework, there would have been clear rules for what’s a security, what’s a commodity, and what are the consumer protections around that.”

Haun, whose venture capital firm has made numerous stablecoin investments including Bridge (acquired by Stripe for reportedly 10 times forward revenue), is largely supportive of the legislation, unsurprisingly. But she had one notable criticism when asked what she doesn’t like about it: the bill’s prohibition on yield-bearing stablecoins.

“I’m not sure that yield-bearing stablecoins are a good idea for consumers in the U.S., but I’m not sure that a prohibition is a good idea,” she told StrictlyVC attendees. The issue comes down to who profits from the interest earned on stablecoin reserves. Currently, that money goes to companies like Circle and Coinbase. But Haun wonders why consumers shouldn’t get that yield, just like they would with a savings account.

“If you had a savings account or checking account and you’re getting yield on that, you’re getting interest,” she explained. “What if you just said, ‘No, the bank gets interest, not you,’ and they’re lending out your money?”

Haun was less nuanced when it comes to another Warren concern: that if the GENIUS Act is signed into law, stablecoins could become a vehicle for money laundering and terrorism financing.

“Criminals are great beta testers of all technologies,” said Haun. “But this technology is highly traceable, way more traceable than cash. The largest criminal instrument is the dollar bill.” (According to Haun, the Treasury Department has testified that 99.9% of money laundering crimes succeed using traditional bank wires, not cryptocurrency.)

Meanwhile, she said, the regulatory clarity that legislation like the GENIUS Act provides could actually make the system safer by distinguishing between legitimate, well-backed stablecoins from more experimental or risky variants.

In fact, as the stablecoin ecosystem continues to mature, Haun sees even bigger changes ahead. She envisions a future where all kinds of assets — from money market funds to real estate to private credit — get “tokenized” and made available 24/7 to global markets.

“It’s just a digital representation of a physical asset,” she explains. “BlackRock, Franklin Templeton, they’ve already tokenized their money market funds. That’s already happened.”

According to Haun, tokenized assets could democratize access to investments in ways similar to how Netflix democratized entertainment. Instead of having to be wealthy enough to meet minimum investment thresholds, someone with $25 and a smartphone could buy fractional ownership in a share of Apple or Amazon, for example. 

“Just because something’s inevitable doesn’t mean it’s imminent,” Haun said on Wednesday. But she’s confident the transformation is coming, driven by the same forces that made stablecoins successful: they’re faster, cheaper, and, she insists, more accessible than traditional alternatives.

Looking back at that 2018 debate with Krugman, Haun’s persistence seems to have paid off. A major question now isn’t whether digital dollars will reshape the financial system but perhaps more importantly, whether regulators can keep pace with the technology while addressing legitimate concerns about corruption, consumer protection, and financial stability.

Haun doesn’t seem concerned. While critics point to the fact that stablecoins represent just 2% of global payments, questioning their product-market fit, Haun bats away that concern, too. Instead, she sees this as a familiar tech adoption story — one that has played out repeatedly and often takes longer than people initially imagine.

“We think it’s really early days,” she told the crowd.

If you’re curious to learn more about what Haun had to say this past week, you can check out our full conversation below: