The Stablecoin Evangelist: Katie Haun’s Fight for Digital Dollars

Katie Haun, a former federal prosecutor turned crypto investor, has been a long-time advocate for stablecoins, digital tokens pegged to the U.S. dollar. In 2018, she debated Nobel Prize-winning economist Paul Krugman on the merits of stablecoins, highlighting their potential to hedge against the volatility of traditional cryptocurrencies like Bitcoin. While Krugman dismissed the idea, Haun’s conviction in stablecoins has only grown stronger over time.

Haun’s background is unique in the crypto world. After spending over a decade investigating financial crimes and creating the government’s first cryptocurrency task force, she became the first female partner at Andreessen Horowitz in 2018. In 2022, she launched her own venture capital firm, Haun Ventures, with over $1.5 billion in assets under management.

Despite her successful track record, Haun’s departure from Andreessen Horowitz hasn’t been without its challenges. While she maintains a relationship with her former colleagues, they haven’t publicly co-invested in any projects since she launched her fund. At a TechCrunch event, when asked about the potential friction, Haun downplayed any issues but acknowledged that they aren’t currently collaborators.

Stablecoins, which were virtually non-existent a decade ago, now represent a quarter of a trillion dollars in value and have become the 14th largest holder of U.S. Treasuries globally. Transaction volume for stablecoins even exceeded Visa’s for the first time last year. This growth underscores Haun’s early vision for these digital assets.

Haun argues that stablecoins offer particular benefits in countries with unstable currencies or limited banking infrastructure. They provide instant access to stable, dollar-denominated value that can be sent anywhere in the world for pennies. As Haun noted, people in countries like Turkey often view Tether as a form of digital money rather than a cryptocurrency.

The corporate world is also taking notice. Companies like Walmart, Amazon, Uber, Apple, and Airbnb are reportedly exploring stablecoins to potentially save billions in processing fees by moving the value of U.S. dollars using cryptocurrency rails instead of traditional banking infrastructure.

However, the rise of stablecoins is not without its critics. Concerns have been raised about economic chaos, the lack of insured government protection behind stablecoin reserves (unlike traditional banks), and the potential impact on monetary policy and banking regulation if major corporations issue their own currencies. A recent New York Times piece highlighted these concerns, questioning the stability and oversight of some stablecoins.

Senator Elizabeth Warren has also voiced strong opposition to the GENIUS Act, legislation aimed at creating a federal framework for stablecoin regulation. She argues that the bill could become a “superhighway for Donald Trump’s corruption,” pointing out that it doesn’t address potential conflicts of interest involving family members of politicians issuing stablecoins.

Haun responded to Warren’s concerns by highlighting the irony of Democrats calling the legislation corrupt while failing to pass crypto legislation that would provide clear rules and consumer protections. While she generally supports the GENIUS Act, she did express concern about the bill’s prohibition on yield-bearing stablecoins, questioning why consumers shouldn’t benefit from the interest earned on stablecoin reserves.

Addressing concerns that stablecoins could become a vehicle for money laundering and terrorism financing, Haun emphasized that the technology is highly traceable, far more so than cash. She also noted that the Treasury Department has testified that the vast majority of money laundering crimes succeed using traditional bank wires, not cryptocurrency.

Looking ahead, Haun envisions a future where various assets, including money market funds, real estate, and private credit, are tokenized and made available 24/7 to global markets. This could democratize access to investments, allowing individuals with even small amounts of capital to buy fractional ownership in assets like Apple or Amazon shares.

Ultimately, Haun believes that the transformation driven by stablecoins is inevitable. She sees the current market as still being in its early days and that regulators will be needed to address concerns about corruption, consumer protection, and financial stability.