Stablecoin Cards Hitting $1 Billion a Month

Sy Taylor  0:10  

Welcome to Tokenized, the show focused on stablecoins and the institutional adoption of tokenized real-world assets. My name's Simon Taylor. I'm your host, author at FinTech BrainCrew, and head of Market Dev the Tempo. And I'm back with Kai Sheffield, head of crypto at Visa. How you doing, man? I'm

Cuy Sheffield  0:23  

great. It's good to be back. It's been a fun week. We've got some great guests, and things are moving.

Sy Taylor  0:29  

Things are moving. We've got two debutant guests this week, making a long-awaited appearance. Is Paul Fakes, the CEO and founder of Plasma. How you doing, Paul?

Paul Faecks  0:37  

Doing fantastic. Appreciate you guys having me on.

Sy Taylor  0:39  

No, appreciate you being here, man. You got the background just right for this. Looks very green. Looks very sunny. Good spot in London. I'm

Paul Faecks  0:45  

having sunny London today. It's beautiful. London is a beautiful place for like six weeks of the year, and then summer when it light out, and then

Sy Taylor  0:52  

we're both basking in that period of time now, Paul. I appreciate it. Also joining us is Guillermo Guncalves, who is the CEO of El Dorado. How you doing, Gamer?

Guillermo Goncalvez  1:02  

Hi everyone. Thanks for having me. Excited to be here.

Sy Taylor  1:05  

Really good to have you on the show. Just before we jump into the good stuff, I got to remind everybody that views and opinions of our contributors today may be their own and might not reflect those of companies they represent. Please don't take anything we say as tax, legal, or financial advice. And with that, I'm going to go to the first story. This was I picked it up in CoinDesk, but it was I think a report that Visa you had a piece of and worked with several partners on that looked into on-chain stablecoin activity surging to 1.79 trillion dollars in adjusted volume in June of 2026 alone. So this is your new dashboard, Kai, that says the stablecoin activity is surging. And there's also I saw separately to this a Dune dashboard that's also covered that stablecoin neobanks saw 245 million dollars in top-ups, which was 18% higher than the previous record. There's lots of data in this one, Kai. But talk to me about it. What's going on here?

Cuy Sheffield  2:05  

Yeah, so I think first context. We we launched VisaOnChainAnalytics.com about what is it was two years ago, and so we were pretty early on to just saying there's a bunch of useful insights that you can get when you actually look at on chain data around how stablecoins are moving. But how do we translate it and make it accessible to more of a mainstream financial services media policymaker audience? So there are a bunch of really interesting insights in in cuts on that. We partnered with Allium; they've been amazing to support it. And so since we've been tracking this, we've seen first we wanted to have some adjusted volume methodology. You know, if you just look at the raw data on chain, you know, you see ridiculous numbers, and includes all sorts of of noise that you have to try and dig into, and so we wanted to strip out some of the high frequency trading, some of the things that just it looks like algorithmic moving money back and forth. It's not really as much organic activity, and even with that, we're now still getting to these numbers of $1.8 trillion in a single month, and so now we're kind of going deeper, cutting into okay, well, what's making up that 1.8 trillion? We estimate right now about 10% of that is what we think about as payments B 2b B 2c C 2b and so 180 billion. Still, that's a lot of money that's moving, but you still have a bunch of other types of activity that are sitting in that number. So we think it's important to to watch closely. We're going to put out some more insights on on what we're seeing in it, and I think it also just speaks to while stablecoin's supply has been roughly flat for the year, the volume in on chain activity is is growing. It's I'm curious. Maybe Paul and Guillermo, like how you guys think about like this counterbalance of it's not that everyone is putting more money in the stablecoins; it's that stablecoins themselves are increasing the velocity, and that money is moving faster within them. And are you seeing that within your own businesses?

Paul Faecks  3:56  

I mean, we are 100% seeing it on on the plasma side. I mean, it's it's it's very interesting how like what stablecoins are are being used for, how that's changing. You mentioned top ups being a having a massive spike and being extremely meaningful. Same is true for card spend. If you kind of look across every like stablecoin enabled card, most of them by Visa, obviously. I think last month was just under a billion. I'm pretty sure that July is going to be the the first month of a billion dollars in in spend volume on on stablecoin linked cards, and like that's been like a perpetual just insane growth month over month for like the last two years basically, and and so it is really fascinating to see how like stablecoins are permeating into non crypto native use cases, and increasingly, there is starting to be extremely real volume of of people kind of using stablecoins in in daily commerce and using them as like the true tokenized cash they are, as opposed to just trading collateral or like on-chain DeFi lending, which is interesting and I think has value. But I do think. Stablecoins as like a technology, as so much broader than just crypto native.

Guillermo Goncalvez  5:04  

I absolutely agree with that take, and in from my perspective, the main difference from what we're seeing now in terms of stablecoin volume from two or three years ago is the rise of what we're calling in crypto the stablecoin orchestrators, the bridges of the world. We now have this infrastructure layer where stablecoins can be used much more than payments itself for like stablecoin to stablecoin payments. But we're actually seeing the rise of all these infrastructure players that are providing stablecoins with an additional use case, so we now have importing and exporting clients all over Latin America that are leveraging stablecoins to actually access traditional payment networks like Swift, ACH, Wire, SEPA, Pix, and so much more. So, if you ask me three or four years ago when we were chatting with importers and exporters, the infrastructure wasn't there yet for them to to fully adopt this technology, and and the fact with that we now have this new infrastructure layer adds a bigger use case for stablecoin as a top up mechanism for all these traditional payment networks, and and something similar is happening with crypto cards as well, so I'm definitely very very excited about this new wave of stablecoin volume and adoption, and and yeah, we're in the middle of probably one of the biggest growth stories in in stablecoin, especially in emerging markets where El Dorado has the most of its clients.

Sy Taylor  6:41  

It's so fascinating to me, as you were talking there. I was reflecting on a conversation I had earlier this week with one of the world's largest banks and trade finance banks, and I think there was a perception in that organization that it's just trading. It is just trading. It's it's all trading, and look, a lot of it is. But if 10% of 1.8 trillion is not an important number to you. Then pay attention to the growth rate, and that's the thing that I think people sometimes lose: is exponentials can kick your ass if you're not paying attention to them. Those growth rates will compound, and if they continue to do so, which everyone around this call has said, well, that's what I'm seeing in my business anecdotally. It's what the on-chain data appears to be showing, then you should probably pay attention to some of this stuff. And to Kai's point, I think it's really hard to know from on-chain data precisely what payment flows are happening. That's why I really appreciate what the Artemis guys did, where they tried to do the bottoms-up number. But even then, it's it's still very tough to see whether there's there there beyond the anecdotes, Kai.

Cuy Sheffield  7:41  

Yeah, I think the other thing, just if you take a step back and say, if we estimate that payments activity within that number is somewhere, let's say between 100 and 200 billion in a single month, which is a huge, huge number, how many large global payment companies today are moving over a billion. Very, very few. Like, if you actually think about, like, how how many companies can you name that are kind of large, top 50, top 100 companies of the world, large banks that can say that they moved a billion dollars on chain in the month of June? They're not many.

Sy Taylor  8:20  

Like I said, the the key qualifier there is on chain, right? Because J.P. Morgan had have a feelings about how much they'd moved in a given day, but for on chain is in

Cuy Sheffield  8:30  

and even like you could say JPMD or JPM Coin aside, like on Conexus, I'd put that kind of a little differently. But like actually on chain, you know,

Speaker 3  8:38  

on a public blockchain,

Cuy Sheffield  8:39  

how many companies have moved even a billion dollars a gin, and I would argue very, very, very few. You know, less than a a handful, and so that adoption is pure bottoms up of basically net new companies that didn't exist five years ago that are now effectively moving 100 plus billion dollars in a month, and we haven't even really started to see the existing scaled players ramp up yet. They're getting into the space, but they they're not turning it on and opening up to all their customers and moving billions of dollars. So I I think it's an incredible testament to just the entrepreneurial energy and the bottoms up way that stablecoins have have grown into payments, and I think that it's just going to get so much bigger when you combine that with some of the top down existing players who are already moving many billions of dollars a month in traditional fiat as some of those flows move over to stablecoins.

Sy Taylor  9:35  

And Guillermo, can I just ask you to say a little bit more about that import export use case because it's one I think people don't pay attention to, and I'd love for you to talk about geographies, size of company, size of transaction, and what percentage of your business that

Guillermo Goncalvez  9:52  

is. Absolutely, and to to add to the previous point, we're seeing a bunch of adoption, especially from small and medium businesses. So it. In Latin America, the big multinationals and the big corporations already have international infrastructure to process payments all over the world. They they probably have subsidiaries in the U.S. or companies in the U.S. and China that enables them to do payments much easier. But for really for the small and medium businesses is where the benefit of stablecoins gets bigger. So we're seeing a bunch of companies in places like Bolivia, Paraguay, Ecuador. These are highly import-based economies, and the the types of products that we're seeing these companies import, especially from China, being China the the main commercial partner of all of these countries. Basically, we're seeing a bunch of electric vehicles, health equipment, and even like basic materials that these companies are importing. And in the case of small businesses, we're also seeing many of these companies import products directly from B 2b retailers from China, so it's a very very interesting use case in terms of slightly bigger companies. We we're also seeing Toyota Bolivia directly accepting USDT for payments. I was recently on on another show where where I was highlighting this point very recently, just as as of last week, El Dorado opened one of the very first neo banking brick and mortar offices in Bolivia because many of these small and medium importers were requesting us like a physical place where they can come and ask questions and and fill all the customs forms etc. So this interception of the traditional way of doing business and a and a pretty modern infrastructure where we're leveraging stablecoins is something that I find fascinating and we're seeing this happening in some of the most underserved markets of Latam, as I was saying, like Bolivia, Paraguay, Peru, Ecuador, and even Venezuela, where as of recently El Dorado enabled money transfers to help with the recent tragic events. I'm really from Venezuela, so we we had our whole team work for like 48 hours to enable money inflows into Venezuela. And being Venezuela a financially isolated country, there's certainly no other better way to send money into the country than stablecoins. So this is another point where the use case of stablecoins is bigger than than everything else,

Sy Taylor  12:44  

Paul. I know that's very familiar from your sort of experience in in the tether ecosystem as well. It's those emerging markets, it's those smaller businesses, it's those consumers who historically the big banks weren't interested in unless you hit their threshold. But you know, sort of the former banker PTSD in me is worried about well, where there's inclusion, there's also risk. So, how do we how do we keep the right side of that?

Paul Faecks  13:05  

Yeah, that's an excellent question. I do think that, like, to an extent, it's an emerging market story, obviously, and I think that that's where kind of the the delta basically and kind of trad banking services, and then what you can enable with stablecoins, where like the delta is is largest. I do think there's also like plenty of of jurisdictions that are like non emerging. We're seeing massive massive upticks. So I think the the emerging market story is is obviously incredibly real and like the growth is is off the charts. We're seeing UAE pick up massively as well. Turkey is is a really interesting market, and in general, I think that there is a lot of a lot of jurisdictions where, like, they each have their own like idiosyncrasies of like why stablecoins are such such a massive kind of value add. You have clarity in Europe now. We're seeing pickup there with kind of MiCA related things then now being possible finally, and so the the risk obviously is kind of a key component to control for, just like any any payments business. But in the end, like the story here basically isn't, oh, you can like finally serve people that like no bank is allowed to touch. The story very much is like you can build a better financial spending product for people that wouldn't have access to infrastructure this good, not because like the banks aren't allowed to touch them, but because the banks don't provide kind of a user experience and product that is like in line with what you would be used to, and like you you you use something in in the Western world.

Sy Taylor  14:34  

Yeah, and the economics probably didn't make sense for them, but the cost structure of stablecoins suddenly looks very different as well. I'm going to move us to the next story, though, because one of the big questions about stablecoins is: Are these things bankruptcy safe? And there's been a lot of hullabaloo on X this week about a series of posts where people were putting up the cast neobanks and terms and conditions, and the terms read that any value transferred to cast as crypto. Is actually converted into stablecoins Bitcoin, but it constitutes a sale. You're actually selling that stablecoin to Cast. Cast then records that payment obligation in a traditional ledger, and all spending on cards is deducted from that balance. So this is not like the DeFi purists would hope for self custody, but it's not sort of a classic e money custodial solution where the bankruptcy protections are well understood. It's in this interesting gray area, and so the the critics say, well, this is essentially potentially another Celsius. And Rags has been on social saying we're a very different company. You know, we are very well backed. We don't do nearly the same type of lending. You know, this is apples to oranges to to give him his thing. But there's there's a regulatory gray area here. Interested in in views from from around this. I'm guessing Guillermo, your clients are probably less concerned. The utility of being able to move money is the key. But talk to me about how you you think about are these stablecoins safe, and how do you give users confidence?

Guillermo Goncalvez  16:04  

Yeah, absolutely. I feel like there's a sharp difference between being fully self-custodial and and then treating stablecoins as a sale, especially for a company that operates in in so many countries around the globe. There are different things to consider. Like for instance, in Portugal, selling your stablecoins or selling your crypto assets is is treated as a taxable event. So you're nearly depositing your your money into an application, and you already have a a taxable event. So I don't know for how many people this was extremely clear before using some of these products? I do admire the track record of cast and and the growth story that they have emerged over over the past couple of years with a bunch of clients all over the world. We also have like a free market economy. Like there's going to be companies where the utility of stablecoins lies in crossword payments and and be able to have a fancy card. And there there's another angle where where stablecoins have this more purist like asset associated. asset-associated treatment, where you can generate yield by leveraging other protocols that certainly have some other associated risks as well, but potentially those risks are at least clearer for the regular consumer. I feel like the bigger debate, and I don't have a clear answer here yet, is what would happen in a case of bankruptcy. I was reading some comments that in the case of bankruptcies, the simply the customers would be treated as creditors after senior debt is collected. So it has to be seen if if that's enough of a protection or guarantee for the regular user who doesn't want to worry too much if if something happens with their money or that is planning to put a significant portion of their savings into some of these apps. It

Cuy Sheffield  18:17  

feels like as global stablecoin neobanks become this really exciting new category and grow at a pretty exponential rate. There's going to be a ton of experimentation around different models of how each stablecoin neobank operates, and that could even be different depending upon the country that they're operating in. So it's actually pretty complex, and you have to analyze it on a specific market by market, product by product basis to really understand and account for the full risks. Today, it seems like the reward and the upside and the demand for these products is driving the growth of it, and I think over time in many sectors you have a bunch of products come to market. Some of those fail. You know when they fail, then people look at okay now like they read the terms and conditions, and so you hope that there are disclosures for every account. And it sounds like in this situation, it was really a discussion around the terms and conditions that were disclosed there, but I I think that just this question of are stablecoins safe is going to be a more important and more complicated question when we start moving to more real people and businesses, and like when we all eat and breathe stablecoin, we all just like we we know how stablecoin works. We know how to think about self custody versus custody, and like which stablecoin, what the reserves are. Like it's just it's like a second language for us. But shout out Paul was your your cofounder Zeon like did a really good series of just trying to explain stablecoins to like regular people. I think in the UK. And they were asking questions of where the dollars held, like what happens, how do I get it? Is it letting? And and it makes you realize most people don't really understand how money works in the first place. And so it's like it's a new thing.

Paul Faecks  20:12  

And and and most people also don't care. I think that's also a massive warning that that until something happens, you'll want to use something like it needs to be useful.

Cuy Sheffield  20:19  

Yes. So so I think that it's clear that you have all the utility. I think the question is going to be: if you get this explosion of stablecoin neobanks across the world, something inevitably happens and goes wrong, and then the key is like that doesn't mean the whole category of stablecoin neobanks don't make sense. It's a market by market, product by product analysis of what are you actually putting your money into. So, I guess how do you guys think about that at Plasma, and particularly the custodial versus self custodial tradeoffs, which seem like that was at the heart of this kind of X back and forth of like how do you think about the not your keys, not your stablecoins type of approach? Yeah, yeah,

Paul Faecks  20:55  

that's a good question. We, as a matter of policy, don't want to comment on on other people's kind of detailed product legal trade-offs they they make. We've come to very different trade-offs. So again, I can only kind of speak to how we think about custody and kind of user funds. Our general ethos is like users have to own their assets and then like fully control their funds. Assets sit in in a user's wallet in in Plasma, not on plasma's balance sheet. So we we can't use users' funds without their their authorization. That means users fully keep ownership of of their assets, and so we would never like force a user to to sell an asset to us just to depositors. We we use shared key infrastructure for that, so so that neither we or lost device can can kind of move funds unilaterally, and and the the user's authorization is is always kind of required part of of moving any funds. So that that leads to users kind of owning and controlling their their own assets, and then we then kind of provide software, and then obviously kind of work with license partners and different entities for kind of any anything regulated that leads to assets being bankruptcy remote, which I think is is especially if you look at kind of the history of custodial crypto services. Um, I do think that is a a choice that a user should prefer. It's it's definitely a choice that I would prefer as a as a user. Just kind of looking at the lineage of like FTX to Celsius to BlockFi to Genesis to more examples. Like you never want to be exposed to like if you have funds in a wallet, you don't want to be exposed to the solvency of the creator of that wallet generally. But in the end, everyone has to like make their own trade-offs, and and I think users are ultimately kind of going to be the the opinionated ones, and in deciding those things,

Sy Taylor  22:43  

and then there's a couple of ways to avoid that exposure, right? So I think this is why a lot of folks in the U.S. are getting the trust charters because that trust charter, as an issuer or as a distributor, gives you that bankruptcy remote sort of setup, but it does so in a way that could be more custodial. So you you sort of get there via a different route, and and there are trade offs there of being locally licensed, but the the licensing picture is definitely not one size fits all. Mica has a different view of how that should work, but the intention from the regulator is very much the same. And so there's there's always going to be these these interesting tensions and trade offs, and and I think it's just this gray area of like to Kai's point. These things are scaling. We don't necessarily know, and we'll find out. I do think, Paul, that point you made that most people don't know how this stuff works, and Kai's point until it goes wrong, and then they suddenly really care is is the tension that we're going to keep finding out. And my fear is something like this blows up in the future, and then the whole industry is set back for a little while because we hadn't thought these things through. Like the the PR black eye is is really meaningful here. I would always view FDIC and FCS protection as a branding thing primarily. It's like the Visa logo mark. It just means that I can kind of trust that this thing's going to work, and if it doesn't, I'm gonna be made whole. I don't really understand how any of that works. I just need to trust that that's the case, and that trust word is is really really key because it's it takes a long time to build it, but seconds to to lose that. So, Garemo, final final thoughts on this: What are you seeing that people are trusting most in your user base? Like, what what's the key factor for what makes them feel safe.

Guillermo Goncalvez  24:24  

Yeah, it's it's difficult to know in in in regions like Latin America. People are trusting brands like USDT much more than than anything. But in terms of the providers of of digital wallets, something I want to highlight is that, for instance, in in Bolivia, and and I haven't really seen this anywhere else in in the world, but in Bolivia, we're seeing some of the major banks, the the five or six major banks, are already offering USDT wallets. They have very limited set of functions, like for. Since you can only buy and sell USDT within office hours from Monday till Friday, so it's it's definitely not ideal for the traditional stablecoin user or the or all of us who speak the the same language. But that definitely opens a new door for normies who are not used to downloading new apps, testing out like international apps with like fancy branding. These are the same household names that have been operating in the country for the past 50 or 60 years. So, I would expect more countries around the world to support stablecoin adoption, you really need some set of conditions and and actually the necessity to be there for this adoption and this innovation to happen also on the on the banking side. But it's certainly interesting to see how companies like ours, digital wallets are competing with traditional banks, and in many cases, people. I would say that for some people, especially the younger generations, don't distinct very well whether a company is a full-fledged. bank or simply a digital wallet or a cryptocurrency exchange. This has some benefits. It definitely has some trade-offs. But if you look at the top 10 most downloaded financial apps in Bolivia today, seven of them are traditional banks, and three of them, including El Dorado, are simply digital wallets. So the fact that people associate digital wallets and banks almost within the same category, it is definitely interesting. Again, I can't comment whether that has direct benefits over consumer protection, we do have some regulations similar to the ones that some banks have, but I would expect more and more normy adoption to happen in in many of these countries as institutions enter the game.

Cuy Sheffield  27:17  

The brick and mortar stuff you're talking about is is super interesting, particularly for for B 2b and I think that is an opportunity that banks have all over the world, where they have a physical presence in a community. They have businesses who walk into that bank who have a person that they know that they can trust, and I think if you can combine that with the modern speed and programmability and and just kind of what the technology of stablecoins offer that gets really interesting. And I I could see like how do you get a smaller midsize business to send their first cross border B 2b stablecoin payment? Like it's probably not going to be on Twitter. It's it's it's not just going to be yapping about trying to get someone down. It's going to be is there someone that they could actually talk to who walks through how it works? Then it's also kind of cool that you could walk into the bank, you could initiate a B 2b payment if that bank supports a cross border stablecoin rail, and then they press a button and then the funds have arrived and you walk out with your receipt that the funds were delivered, which is very different experience than most you know small businesses. If you go to the bank to make a international wire, you go there to initiate the payment. You don't actually know when the funds get there, and so just that immediacy of being able to walk into a physical place, have trust, initiate a payment that lands right away, walk out, and know that you paid. I think is it a a product experience that is very interesting. That more banks should figure out how they can leverage their trust and physical presence. In addition, instead of just trying to compete on the digital side, which is much harder to compete with the the digital native neo banks there.

Sy Taylor  28:55  

Well, you've given me the perfect segue to the next section, Kai. So we'll we'll thank our sponsors and we'll come right back. This episode, if it's not obvious, is brought to you by our friends at Visa, a global leader in payments. Visa's tokenized assets platform VTap uses smart contracts and cryptography to help banks bring fiat currencies on chain. VTap allows financial institutions to issue fiat-backed tokens, improving financial efficiency and enabling programmable finance. You can check out the links in this episode's description to express your interest in VTap. This episode is sponsored by Stripe. Internet commerce is evolving pretty rapidly, and agents are now becoming economic actors. They're managing spend and transacting autonomously, and stablecoins are becoming the default for them to do so, thanks to their programmable, instant, global, and low-cost nature. With Stripe, your business is ready for this new agentic economy, except still. Stablecoin payments from agents, equip your agents with wallets, and issue stablecoin-backed cards so they can spend. All through a single integration from Shopify to RAM businesses, trust Stripe to get ready for agentic commerce. Learn more at stripe.com/crypto. Tokenized is also sponsored by Fireblocks. Fireblocks is the stablecoin infrastructure of choice for global businesses from Visa to WalPay to Bridge to Revolut. With over $100 billion in monthly stablecoin volume, Fireblocks powers stablecoin strategies at scale with infrastructure that enables PSPs, fintechs, remitters, and banks to issue, move, hold, and manage stablecoins. It's all done securely at scale with secure built-in compliance. With Fireblocks, you get complete control to build your own stablecoin orchestration layer, create payment accounts, manage liquidity, and access on and off ramps in over 60 currencies makes it easier for you to build and scale and expand your business globally. Learn more at Firebox.com. This episode is sponsored by Modern Treasury. Stablecoins are here, and so are checks and ACH. They're not going away. RTP and Fed now and new types of payments rails are emerging all the time. The challenge now is integrating all of these without slowing down. Modern Treasury offers one single API for fiat and stablecoins, helping teams launch payments products in days, enter new markets, and serve more customers. Trusted by companies like Procore and Navan and Morse, and backed by over $600 billion in payments history, learn how to adapt to changing payments rails with scale and confidence at moderntreasury.com. Thank you to our sponsors. The next story, speaking of banks, is about UBS's stablecoin proof of concept. So they executed their first ever stablecoin payments in a real world environment through this proof of concept. It was in partnership with Merge. Shout out to Kebby and the team over there with some corporate clients. The pilot focused specifically on executing B 2b cross border payments using stablecoin rails rather than traditional correspondent banking infrastructure. This bypasses a lot of legacy systems that those corporate payments were needed to go through. But I spoke to Andreas at UBS, and he said the biggest insight was actually for those corporates who do a lot with large banks already today. The real benefit was not having to onboard a new supplier and do another vendor due diligence, make any tech change, use a new system. It just worked the same way the bank always did. It was like a bank-driven stablecoin sandwich. They just sent them a payment instruction, and and the payment just moved. So, Kai, I'm going to start with you on this one, actually, because I do think that there's this perception that the banks are not doing a lot with the stablecoins or dislike them. But what was your thought about this story in particular?

Cuy Sheffield  33:09  

I think it's great. I think we're starting to see the movement from strategy to execution, and the best way to learn is to actually move on chain and make some payments for some real customers. I think it's interesting that there's sometimes when you talk to banks, depending upon the market, they might say our customers aren't aren't proactively asking us for it. But there's this kind of tendency to like you wait, and if you wait until your customers ask you for it before you start working on it, you're too late. Like it's because by that time there are plenty of other options you know that they have, and so I think being able to say let's go and proactively talk to our customers and say hey, what could we do together to try this out? How can we help you? And I think there's there's a bigger opportunity for banks to bring stablecoins to existing customers before those customers have already decided and figured out how to do stablecoins outside of them. Versus if you wait for that that pull, that's the risk that they've already gone someplace else, and maybe they they haven't asked you because they don't see any signs of you offering anything, and so they're already working with somebody else to do it, and so it's just great to see more of this proactive approach and moving from just strategy and and talking about it to actually real money movement and pilots. And I think we'll see this this story more and more over the the rest of the year.

Sy Taylor  34:34  

Yeah, it's so funny, Kai. I was having exactly that conversation with the global head of payments for one of the largest banks in the world just a couple of days ago here in London, and I was like, "Well, of course they're not asking you. I mean, have you seen your public posture on this topic? Like, if you aren't doing things of this nature, like UBS is here, they're not going to come and talk to you, and you're not taking it to them as an idea. And which bank doesn't want? Sorry, which corporate? A client doesn't want instant 24/7 as long as they get it from their bank, and I think it's so interesting that this was Swiss francs to Brazilian real corridor that you know maybe not naturally the largest in the world, but again it's it's that latam connection. So Guillermo, coming to you on this, your thoughts on this story and the bank's involvement, and from what I understand, this was better than nine to five as well.

Guillermo Goncalvez  35:23  

Yeah, this is a fascinating story, and and we've been chatting about the stablecoin sandwich for a while. I was I was even referring to this phenomenon even probably before it was actually called the stablecoin sandwich itself, and and the fact that that you have on one side a traditional payment method, in between you have stable coins, and then on the other side the end receiver, potentially with peaks in Brazil. I think it's fascinating because you don't have a direct way to send money in an efficient forex fashion with with the traditional system, so I think that the biggest point I want to make is that from our point of view, the biggest and most important use case for stable coins, and we will hear more and more about this, is definitely cross border payments, both for B 2c and B 2b There has been a lot of conversations about yield, about DeFi, about hedging against inflation, especially in economies like Venezuela. Like I, I know about how people in Venezuela are leveraging stablecoins, but the use case for cross-border payments is simply much better and bigger. So the fact that we can now connect payment rails in Asia, in Africa, with payment rails in Latin America by leveraging stablecoin liquidity on both sides of the equation is something unseen in terms of financial innovation. So, by far, the thing that excites me the most about stablecoins is definitely cross-border payments. And as I was stating before, two or three years ago, when we were chatting with importers and exporters all over all over Latin America, it seemed like the infrastructure was not ready, and that they even their knowledge about this technology was not there yet. But that has shifted drastically over the last 12 and 20-four months, and I believe the Genius Act had a lot to do with that. But bigger banks starting to adopt stablecoins for cross-border payments also has an important message to to everyone else who wants to engage into cross-border payments.

Sy Taylor  37:53  

It's so interesting to me that you're seeing that too, and it's now sort of appearing at the top. And I think the interesting thing to me about UBS is people forget this is one the second largest FX broker in the world. So to be able to do that in in other currencies is is really fascinating to me. And they've quietly done a lot in the on chain space. You you don't see them as one of the banks doing it, but they have a tokenized money market fund. They've been doing a lot domestically around the Swiss franc. Could be an interesting one to watch, Paul. And yeah, your thoughts on the story?

Paul Faecks  38:25  

No, it's it's fascinating. I think it's it's it's a horrific cliche, but it feels like one of those like slowly and and then all at once moments where like I think like for years now there's been these a POC here, a POC there, like everyone is like trying out little things left and right, and like all of that is interesting, but like it's never really felt like real in like a substantive sense. And I do feel like that is changing. Well, like I think there's like increasingly kind of banks, asset managers, importers, exporters, trade finance. I think there's many categories, but like I think there's been like years of like experimentation on what works and what doesn't, and is this interesting or is it not interesting? And it feels like we're kind of at this takeoff point, basically, of like everyone has realized that it is interesting, and now it just kind of takes the one step further of like translating that into into kind of actually implementing it into into processes, and I mean UBS validates that JPM is doing a lot of things, Franklin Templeton is doing a lot of things, Visa is doing an insane amount of things, and so like like I think you can like point to like many many kind of more traditional payment players that are like putting their money where their mouth is, which is like we are exploring kind of stablecoins and in payments, and I think that's only like I think that's 1% as much as like we will see in the next year and the the year after. I think it's this kind of a perennial kind of mega trend that that has one direction.

Sy Taylor  39:55  

Yeah, I speak to a lot of banks. One of the things that they're looking for is the rules behind. Ingenious to be finalized. I think a lot of the U.S. domestic ones, but in Europe and Switzerland, it's it's quite a different position where the rules have been finalized and Mika's gone live, and so that they they can potentially do a little bit more. One bank that is doing a lot as well is Standard Chartered, who is now letting clients access USDC minting and redemption for its institutional clients, and this is the first globally systemically important bank licensed to offer access to its institutional clients. It's only going to be, you know, a handful of select clients through their Dubai operations, but they they plan to extend that. And so, Kai, do you think every bank's going to want a minting account, and you know, if if stablecoins do start to take off as this 24/7 money transfer mechanism, what's their role in that?

Cuy Sheffield  40:49  

The the first thing this makes me think of is is back to the episode we did maybe a year ago with Nick Philpot from Zodia around like the eight ways that banks can make money from stablecoins, and it was really just talking about the opportunities under the hood of the kind of reserve banking that has to sit underneath stablecoins, and being able to be a reserve bank and a settlement bank for funds going in and out of a major stablecoin in hubs across the world is a really interesting opportunity. And so, I think you've got to shout out. Standard Charter arguably has been the most forward-thinking bank on crypto in the world, going back many many years, and like incubating Zodia Markets and Zodia Custody. I think they've had a very top-down strategic vision that this space is going to be important, and in many of the markets they operate in, it makes sense that that they're interested in it. So, I think the question is, how does this play out? With is every bank going to you know you can't really have every bank be a reserve bank for a stablecoin, and so the like standard charter relationship with Circle as well as the BNY relationship with Circle feels more of like a pretty comprehensive partnership where they're able to offer a lot of services that are mutually beneficial. If you're not one of the top few banks like them, does is this going to play out in the same way? But I think it's it's clear that banks are going to need access to mint and redeem the top stablecoins, and maybe it ends up being other banks going through Standard Charter to be able to get access to to Circle instead of every bank signing up with Circle or an individual be a stablecoin issuer. So I think that the the flow of funds of how you go from the source of an issuer and wholesale distribution sub distribution partnerships out into the economy is going to get really interesting and and more sophisticated as larger financial institutions start to participate.

Sy Taylor  42:46  

Paul, how are you thinking about distribution?

Paul Faecks  42:49  

That's a that's a very big, very broad question. I do think that like we massively believe in like a multi stablecoin world. Obviously, I do think there's like room for many stablecoins to win. I do think there's massive potential for like these these consortiums of of banks coming together, like launching stablecoins together. It doesn't even have to be banks, but like just at least adjacent to financial services companies kind of coming together and launching stablecoins. I think there's a couple of interesting examples of that. Open USD is obviously one. There's a European consortium called Kivallis that's very interesting, and so I do think that like a lot of that is is going to keep happening. I think in the end, what users care about is that like they have a choice basically, and like in in the end, like most of our product choices and and how we kind of reason about how should a user like what stablecoin should they use, and how should that look like? I do think that should be a user's choice, and and I think anecdotally, like users are opinionated on that, and so I think that that only kind of bifurcates more distribution. In in in that context is is like one of the hardest things to get right for like having a great product and and and getting it into into people's hands are like two fully separate things, and and and so we we've always known, but like this is always going to be like two separate tasks, and you need to be very good at doing both of them. And like I'm sure Guillermo, you you probably agree with that, right? But like it's it's two separate work streams. We're like you need a fantastic product to like get to real distribution, but also like it doesn't work without the other side.

Guillermo Goncalvez  44:23  

That's absolutely right. And we we've been running a consumer business for the past four to five years. It was until just two months ago that we launched our B 2b offering. But on the on the consumer side, we've been very very aggressive into communicating how a simple or digital wallet and all the like stablecoin powered services behind our digital wallet are to TikTok users, to Instagram users, and especially for the younger audiences doing a bunch of influencer marketing all over Latin America in Spanish. Portuguese, so that that has been tremendously popular for us to to acquire customers, especially cross-border customers. So a bunch of our clients are migrants, travelers, remote workers, freelancers, and and people who have some sort of international payment need or or cross border payment need. So that has been very very interesting to see because if you are a Bolivian customer or a Venezuelan customer and you move to a different country, you are likely to follow a Venezuelan that also moved to this new country to let's say to Argentina or to Brazil. So we are very careful about how we select these influencers and how we draft our narratives around cross-border payments. So that that that's been fascinating. And now that we are also operating a B 2b business, especially with importers and exporters, I stopped going to like crypto conferences a few months ago. But now I'm attending a bunch of coffee union conferences, car car show conferences in Paraguay and Bolivia, like agro conferences in Argentina. So, and this has to do with the fact that we're now that we now have like a brick and mortar office, and that we really want to serve these clients that don't necessarily care about whether we're using USDC or USDT or or any specific chain behind the scenes, they just simply wanna do their payments to China with the lowest fees possible. So

Speaker 4  46:49  

crazy idea,

Guillermo Goncalvez  46:50  

yeah, crazy, crazy. Yeah, but I feel like we're entering like a new time in crypto where we're we're pretty much going back to the basics and we're providing tools to ordinary people without really needing to explain all the all the details as we used to do like a couple years ago.

Cuy Sheffield  47:11  

That is the the real alpha right now in the space. Stablecoin companies going to non crypto stablecoin conferences, like regular industry conferences, shipping, agriculture, manufacturing-like those are the conferences. That's the circuit. Don't just go all like talk to each other at the same conferences saying the same thing about stablecoins. Go talk to end customers in the industries that actually you know need this. So excited to hear that, Germa.

Sy Taylor  47:38  

Yeah, indeed. There's a couple of stories we didn't have time to cover this week. Kraken's parent payroll is looking to become a bank in Europe, so it's not just the U.S. that's seeing shelter applications. Sony's crypto bank Connect here received a conditional OCC approval for a trust bank, and Revolut delisted Tether and port to maintain Mica compliance after that was included, so a lot of talk today about sort of the the global nature of how licensing will will vary and the need to to kind of manage that. I want to thank everybody for this conversation, for viewing, watching, and listening. Paul, if people want to learn more about you and Plasma and Plasma One, where do they go to do that?

Paul Faecks  48:18  

Sure, the easiest place is probably plasma.org, which is our our website. Anything important is is there. I'm also on Twitter at Polypunt, kind of complicated Twitter name, but those are probably the the two places that that we are easiest to to find.

Sy Taylor  48:33  

I hope people will check it out. Guillermo, you and Eldorado.

Guillermo Goncalvez  48:36  

Yeah, you can find more about El Dorado at Eldorado.io, and you can follow me on on Twitter as stablecoin gee or stablecoin so yeah happy to provide more insights into the stablecoin money movement across Latam

Sy Taylor  48:54  

Appreciate you and Kai

Cuy Sheffield  48:55  

on X Kash Sheffield and visa.com/crypto

Sy Taylor  48:58  

You'll find me S Y Taylor on all of the socials, screaming into the void at fintechbrainfood.com, and of course at tempo.xyz, where we are working with several large banks doing cross-border stablecoin pilots. So call us if you want to get involved, and of course you'll find a lot more of this show if you subscribe and you tell all of your friends to do so too. This is the show that's a little bit different to most things in tokenization, and we hope you'll help other people find it. We will catch you next time. Thank you, and bye for now.