Building a Perfect Stablecoin w/ Austin Campbell

"We can do better" says the Columbia professor who recently testified in front of Congress on Stablecoin regulation.

Samuel McCulloch
Samuel McCulloch
May 31, 2023

Summary of Austin Campbell’s interview

  • His definition of a stablecoin
  • Why he disagrees with the definition of Stablecoin Maximalism
  • Whether ETH can become money
  • How his background in fixed income trading helped him navigates the stablecoin landscape managing Paxos.
  • Varying cash management strategies stablecoin issuers, and why Circle screwed up so badly during the SVB collapse.
  • Why no one has made the perfect stablecoin yet.
  • The McHenry/Waters Stablecoin bills.
  • Why the USA is losing the regulatory race on stablecoins
  • Why stablecoin usage outside the United States is so desperately needed.

“The Ideal Stablecoin Has Not Been Created Yet”

Austin Campbell is a highly accomplished professional in the financial industry, specializing in blockchain technology, stablecoins, and fixed income markets. With extensive experience in portfolio management, risk management, and trading, he is the perfect ambassador to represent the growing stablecoin industry to the rest of the world. We asked Austin to come on the podcast after his electric testimony to Congress on regulating stablecoins.

In slight contrast to Sam Kazemian’s Stablecoin Maximalism thesis, Austin defines stablecoins as only representations of fiat currency on a blockchain. During his testimony he explained that stablecoins can be as simple as physical dollar bills stored in a vault, with tokens issued to represent each dollar.

During our interview with Austin, we covered the three major models of stablecoins: fiat-backed stablecoins, crypto-backed stablecoins, and algorithmic stablecoins. We touched on Tether’s role in being the offshore “eurodollar of stablecoins”, DAI’s overcollateralization issues, and why Austin holds Frax in such high regard. At the end of the day however, Austin thinks that fiat-backed stablecoins fit within a banking framework and should be subject to appropriate regulatory frameworks.

A Little Bit About Austin

In his own words “there are probably only three people” who have managed large cash treasuries, deeply care about crypto, and can elucidate their thoughts clearly in a classroom.

Austin's career journey began at JPMorgan Chase, where he served as an Executive Director in Rates Trading, specifically focusing on insurance-linked products. During his eight-year tenure, Austin managed the insurance-linked trading desk and played a crucial role in the fixed income market.

After a short role at a fund, Austin joined Paxos as the Chief Risk Officer (CRO) for Paxos National Trust. In time he was promoted to Head of Portfolio Management, where he managed over $22 billion in stablecoin reserves, employing a diverse range of cash instruments and focusing on regulatory outreach, transparency, reporting, strategy, and partner relationships.

Austin currently serves as an Adjunct Professor at Columbia Business School, where he educates students on Blockchain Markets Infrastructure. In addition, Austin is currently a Managing Partner at Zero Knowledge Consulting, where he provides expert advice on strategy, business models, and navigating disruption in the blockchain space.

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