Will Stablecoins Ever Get Used Beyond Degen Trading—And Does It Still Matter? | Jelena Djuric | Joao

[Music] awesome and welcome back everybody I hope you guys all got a chance to eat uh lots of great food options out there get those bellies full so that we can learn more about crypto stable coins uh so we've had a lot of great discussions about crypto stable coins so far um but the hot Trend these days is meme coins right so this next panel we're going to be talking about uh will stable coins ever get used Beyond dgen trading and does it still matter hosted by Adam from aosh Network hello how's everyone doing all right I like that that's good well how are you guys fantastic last day good to see you um well thank you guys for joining our panel here today um All About stable coins get you will stable coins get used Beyond dgen trading and does it still matter well we're going to find out uh my name is Adam wosy and I will be your moderator for today's panel event um in my day job I'm actually had of community for the aash network and very briefly the acash network is a Marketplace for cloud compute you need access to high performance gpus and you want those gpus to be open source decentralized permission list check out aash but that's not what we're here to talk about today I could talk about that all day long um today we're going to be covering the current landscape business models and future outlook of the stable coins Market I'm joined by a fabulous panel here first up we have Yelena jerich I prct I practiced that impressive co-founder of noble and on Twitter it says you're defiantly optimistic what are you defiantly optimistic about you know in the face of so much uh so many reasons to be pessimistic uh there's so many reasons to be optimistic and you kind of have to be defiantly so uh yeah so it's good yeah it's good yeah it's a good line um next up we have I'm going to this is the hardest one I apologize J rinato that's right yeah all right Chief strategy officer of Mo Labs um it says you've been doing product development for over 25 years is that right yeah I'm a little older than I look yeah that's what I've been told any any key learnings a few shoot if we want to talk about stable yeah know I'm Chief strategy Chief strategy officer for m I join mzero about a year and a half ago prior to that I spent 8 years at Circle where I led the where I led the build out of us and some other stable coin products um I won't get into the rest of that cuz it's going to sound too old all good uh and finally we have Austin King co-founder of omni um I saw that you were or maybe still are a rugby player do you still play rugby wow that's a that's a throwback no all my friends started getting concussions and I uh I quit I've never played rugby just looks like a little too intense and I don't want to ruin my ears I worry about the ears yeah yeah that's real that's real so my friends ruin your your ears look great man good ears thank you thank you um that's not what we're here to talk about ears we're here to talk about stable coins um so I want to kind of kick it off with like a level setting question um let's start with your current assessment you know how much stable coin usage today is truly for speculative trading versus other use cases and uh how has this ratio evolved over the past you know two to three years yeah I'll begin um there's a really good chart that Artemis uh has been circulating past few days if you look at the kind of market cap of an index of crypto tokens um I'm not sure maybe let's say top 100 top 200 that's going down and yet at the same time stable coin issuance is is going up and there's actually quite a quite a large difference between those two figures so you know right now there let's say isn't as many opportunities for speculative uh trading because things aren't very you know hot right now and yet you see stable coin issuance kind of going up um it's just a interesting kind of current data point that I think suggests that a lot of that growth is notp speculative yeah I'll I I'll let a slightly different perspective I I am we are totally m zero you know we are a platform for the the building of stable coins for specific use cases so we are totally interested in this growth of you know a more varied set of use cases and I think we we see that um but I think it's always it's always a little bit uh at least to me it's always a little bit annoying and I I don't think we here we are the crypto industry the crypto sector so I don't think we do that but I think it's a little bit annoying to me how you know every time that something works there's there's that tourism that happens you know and people land they've never touched stable coins but all of a sudden they they it seems like they have invented it and now you know and I'll name names uh not people but I'll name names you know there was the event of you know the stripe acquisition of bridge late last year and oh my gosh all of a sudden coins are magical and it seems like you know everybody's using them for crossb remittances around the world and even Elon Musk and starlink that there's a lot of in that uh the volumes and the reason why stable coins have become so large to the extent that they are today is absolutely 90 something very high percent because they are phenomenal layer for settlement of crypto Capital uh trading right um cryptical Capital markets trading um whether people like it or not it is what it is all of these aut use cases are growing uh phenomenally um you know the use of cross border the the euro dollar use case abroad but but if you dig in the numbers still like the crypto industry has been what you know propelled stable coins to what they are today I don't think this is going to be the picture in five and in 10 years time I think now it's a Tipping Point where we will see the the the adoption from other use cases and I think we're going to talk more about what those are but I but I but I also don't like people to like rewrite history and kind of all of a sudden you know raise the bulk of the usage about that not not that I said the yell is doing in F for me yeah I think that's largely Fair it definitely was born out of degeneracy we uh like had these tools so that we could move out of Bitcoin and eth when things were freaking out um but what I'm personally like really excited about with stable coins that we're seeing today is for a long time the vision of Bitcoin is like Sovereign money that people can escape local Fiat currencies that are just falling in value every single year and you know even though it's not like the original bitcoiner vision of sovereign money stable coins are actually providing that for people today people in Argentina are fleeing the local currency in stable coin so while a majority of this activity might be like degenerate Behavior Uh there's actually still a ton of utility that's like being adopted in developing nations across the world where it's actually really really important that people have this alternative and it's concretely impacting their lives yeah and that kind of leads to my next question nicely kind of crossb payments and regulation right and I think we've seen um some clarity you know improving oh hey dog oh nice he likes this question um we've seen some regular uh regular regulatory Clarity improving in some jurisdictions um how do you think this has affected the development trajectory for stable coins designed for real world applications I I think that's going to make a huge impact I think um and it's not only the the clarity I think but it's the it's the friendliness as well I think uh you know I've spent 8 years at Ciro as I said uh now I'm now I I I have a slightly different perspective when we're trying to push the the boundaries of what can be done with stable coins because I think everything that we see today is very much a V1 and the tax Tech is going to look different but unfortunately we lived in a world in the last uh four years where a lot of people who were working in the stable coin sector they were kind of hiding you know in several corners of the World perhaps trying not to be in the US uh if you shared yield of a stable coin yikes was data security and were you going to go to jail like all those silly conversations so I think um I think people began to to ask for clarity but sometimes Clarity in regulation comes and then comes directly against you right the other day I was looking at somebody who register a yield bearing stable coin in the US as a security I mean well it's not it's not exactly the precedent we wanted to set in the US I think what's more important is uh friendliness because for example what happened in Europe with Micah uh is not exactly a very friendly set of regulation for for stable coins it makes it very economically um not viable for you to run a stable coin in Europe um but I think but I think friendliness is important and I think the friendliness will come with uh with the changes that I think we have seen in the last number of months and again I point to the acquisition of bridge uh from stripe I think that that will probably be seen looking back in a few years as a pivotal moment where some company decided to take a little bit more risk and say you know what this is ready enough even without Clarity from a regulatory point of view but we see the Environ en is friendly that we're going to go in and we're going to take a little bit of risk and use it because I think when those players start touching it that's when we will see which we are already seeing as Yen alluded to that's when we will see a humongous uh growth in adoption and size because the size of stable coins today to 120 billion they're really a drop in the bucket of what they can be yeah um I'm not sure how many people uh know this but actually one of Trump's executive orders was uh signaling that private stable coin innov would be encouraged um uh at the expense of you know Central Bank digital currency kind of innovation so you know that that's not like a piece of legislation obviously that's just an executive order but it clearly kind of symbolizes and and creates an intention uh at least in the US that uh there should be a plethora you know of kind of options for consumers that that you know these like private stable coins you know should exist and they should be you know innovated on top of so definitely happening currently and it's exciting yeah so to keep in the kind of current land ape kind of theme um what are some use cases you've seen Beyond trading that has shown the most promising traction so far and why do you think they haven't scaled more significantly I mean payments just literally paying people holding stable currency and I think it's just we're going through maturation phases where uh you did need to build up Global Network effects like if anybody's been seeing the Bas account they keep running around asking people like will you accept crypto will you accept crypto and they're like no dude like get out of here um but like that's just because they don't have the infrastructure set up and it sounds weird to them and they like think it's like ethereum or Bitcoin some volatile crazy thing so I think a lot of it is just like getting uh stable coins integrated more at the actual like usage layer uh of like the retail usage layer most of it has been at the infrastructure and trading layer so far yeah I'll give a a little bit of a different perspective so we're we working with z and the team at mzero to actually launch a stable coin called Noble dollar uh this is coming at next week on Wednesday usdn so woo yeah we're very excited but um usdn like the application that I actually see this serving kind of uh in the immediate term is uh for any developers that you know use stable coins on their platform right you're a defi developer you know you you run an exchange of some sort stable coins are obviously a big part of that economy um but you don't get any interest from the stable coins on your platform right you typically use usdc or tether so having a yield bearing stable coin which is what usdn is you could actually take that interest uh kind of earned as revenue and you could pay for your expenses so it's a bit nuanced right it's not like payments or rences that we typically talk about but this is actually a tool you can use as a company to actually continue kind of growing your business so yeah yield bearing stable coins for developers and you know obviously these defi applications uh will uh definitely take off uh in ways that we don't even realize right now because you can you know control that Yi uh on top of the distribution yeah I completely agree with both uh I think what I would add that I think it wasn't mentioned and as I said at mzero we are building excuse me we're building a stable coin platform for Builders essentially so anyone who wants to build a stable coin they can build it on top of m0o super easily tapping on a shared liquidity Network and all those stable coins are interoperable with each other so it sounds like wow super phenomenal but as ler was saying earlier in another panel by the way that's the way commercial banking works right and so we went backwards and we have like all these forms of money that are very uh fragmented it's horrible and that's that's a big part of why tether is the size that it is is just because there's gravity around a form of payment if you have to fragment liquidity that that's always very poor so we facilitate this for any Builder team that wants to create their own stable coin the the most interesting pull that I'm seeing the thing that interests me the most is is is actually not in payments it's um it's how stable coins can play the role of you you know the Next Generation almost banking as a service if you are a fintech and if you have built a fintech uh if you know what what it takes it's a very cumbersome type of structure legally and technologically speaking that you need to to build up you need to have a banking partner you need to have you know FBO accounts you need to have entry points for customer deposits and then probably you need to have also a payments processing partner that will plug into that and allow you to move all that money if you think about all these things that I listed that that you can you can get all of that from a stable coin and your own stable coin not a stable coin that you then want to go to binance and get it listed that's not the point uh it's probably just an implementation detail that people won't even know that they're using a stable coin is a dollar balance on some app that behind the scenes sits you know some amount of funds on on chain and particular addresses manipulated by a smart contract I think that we are seeing today a few FX already beginning to build that on top of mzero and I think in the next 5 to 10 years we will see most fintex in dollar terms being built on stable coins and not on Commercial Banking partnership so I think this kind of leads nicely to the next few questions you know we're talking regulation we're talking use cases this leads to business models right um and to take a contrarian view I would say some trafi Bros would argue that a business model for stable coin issuers is broken and bound to be disrupted do you agree and what sustainable business models do you see emerging uh I actually don't think it's broken I think it's a phenomenal business right now if you look tether uh having said that I think it's such a good business that I do think it will be disrupted there's just such a clear incentive for people to come in and share more of this the profits that these companies these centralized companies are not passing on to the Token holders and so there's definitely going to be like interesting friction as that happens but there's a massive opportunity everybody sees how much money tether is making and they're trying to hop on that anything to add no I I agree I I I don't think the business model is broken fundamentally um because you know if you if you want to accept that the business model is broken then you have to question the business model of banks as well uh you know they're not too dissimilar I think I think the one thing I wouldn't call it broken but the one thing that I see evolving into the future is that what what we have known commonly as stable coin issues to date you know uh namely tether Circle paos you know these are probably the biggest three um uh there there is a there is an anti- pattern in those business models that I agree that I think we will see changing into to the Future which is that they don't own any use cases they just do stable coin issuance and and this creates you know i' I've watched a few panels this morning here where everybody T touched on the same thing this creates this weird dynamic between the issuers and their distribution channels where the distribution channels are seeing themselves creating the value right because they own the used cases I mean binance owns the used case it's not tether who owns that trading use case but all the value goes to the issuer I mean that that that seems like a bit odd and you have these dynamics of people asking each other for yield and sitting around table and closing back office deals and all that I think we will move into a situation where there will be a lot more stable coin issuers but they will own a use case and then they don't need to go anywhere else to kind of do a tricky deal um and we will see then to to I think a point that was mentioned as well we will see the the fragmentation I think of market share being driven by that because you know issuance is going to be pushed to the edges what the use Cas is actually is very cool yeah I mean the value really is captured on like the UI level like who has direct access to the end user right and right now it is really the centralized exchanges binance obviously in in the tether case coinbase in the usdc case many many other examples so that's going to be disrupted like heavily as the assure uh has control over the distribution as shw said but the user still makes a lot of money yeah um so I think we have for maybe a couple more questions and these ones are really just for me so I'm just curious about these ones um do you believe that Regional stable coins with specific Regulatory Compliance are a valuable construct or should the focus be on a global Sol on on global Solutions spicy do you mean Regional Regional stable coins as in Regional currencies yes oh yeah that's that's a question I get a lot and I still don't know exactly how to think about that i' I've been you know I've as I said I I I was a circle before I led the build out of USC and then we built Euro coin and you know we consider building other currencies back in my day there um and there there just wasn't like enough traction to justify a lot of the investment on those things I think uh but on the on the other hand I think some some people you know the more tourist side of stable coins as I said before I think they find it amazing these use cases where you know you pick a regional currency on one side convert to a dollar stable coin send it over to another country and convert back into another currency I think that's extremely cumbersome and it's a very expensive flow and while people might think it's cool it's actually very very um bad and silly to do it that way and um I think I see stable coins as more like you know the early days and I'll show my age now the early days of digital photography right uh when when digital cameras came up and most of you are too young to remember this but people would chicken yeah people would take those cameras take a photo and there was only one use case it was to go to some kiosk on a mall to print them out right so they had to offramp because there was no you couldn't send a picture to anybody it was too cumbersome it took 10 minutes to upload it to your to your Yahoo mail at that point right uh and and fast forward like you started to have a lot of use cases for digital photography right you had like Instagram and all the web use cases and so people never off ramp anymore I think I think there's something there I think for regional stable coins in that they're never going to be as big as the dollar in the same way that the dollar is the global curent of the world but people will not offramp anymore to actual fat they will offramp to some flavor of a local digital currency that they can use in in day-to-day use case I like this question because the premise here really is like what's going to happen in regards to Fiat currencies at large any fiat currency that is not digitized is just going to fall out we're already seeing that nations are trying to hold on to their Fiat currencies and their citizens want to escape it it's a way to like implicitly tax citizens throughout the world that's what fiat currency is and so really it's just like do we move into a world where everybody in the world uses USD maybe China is able to trap their citizens into using their local currency um so I don't think it's just about like local currencies I think it's really about the evolution of the concept of fiat currency at large well I think we actually don't have any more time so this last question I'm just going to ask you off stage and if you want to hear it come on over and say hello but um I want to thank you guys for being on this awesome panel thank you guys for joining this and and have a great East Denver thank you