Building Stablecoin Rails for Enterprise Payment & Treasury Operations | Tanner Taddeo - Stable Sea

Stay here. I'll Oh, we're already over time.

All right. Hello everybody and welcome back to Stable Coin Summit. We're really happy that most of you just stuck around. We love that. We love a sticky audience cuz we are going to dive more into how treasury management can happen on chains, especially when it comes to stable coins.

So if you have a company that is about to make a lot of money, God bless you. That should happen. But on that note, I hope you know how your treasuries can be managed. And we have today Tano with us who is the co-founder and CEO of Stable C. Is that right, Tanner?

Amazing. So Tanner's going to take the stage now, talk a little bit more about how he works and what he does. Um, and Tanner, all the best. Over to you. Thank y'all.

I'm gonna free solo this one here. So, uh, no presentation, just chatting, open up for Q&A here at the end. So, definitely welcome y'all's questions. Um, but yeah, good to see you all. My name is Tanner, CEO and co-founder of Stable C.

Uh, what StableC is is it's a B2B enterprise crossber payment platform. What I'll talk to you guys about today is a little bit of our origin story, what we're seeing in the space, some of the key challenges that still remain. um and go from there. So uh at stable C we got our start we were at a company called block before which was formerly Square um and we were building uh decentralized payment protocols for crossber payments. Um we left uh because we saw a we left to start stable C because we saw a big challenge in the liquidity space.

What that issue actually is in theory is, you know, if you get if anyone in the audience here wants to go and start a gig economy application or um some sort of payout or payroll or marketplace company, pretty simple to get set up these days, right? You go out, you get a account at at Bridge and then you build into, you know, someone like Bitso and Latam and then you're off and running. You can do on-ramps into US dollar. You can put that into a stable coin. can move that across any chain and then you can convert it into MXN or Colombian peso or Brazilian REI and then you send it to the local bank account destination.

A lot of the stable coin infrastructure was built for retail payments. So it was built for small like high volume low tickets. Uh and so liquidity works pretty well around the world. Um except for in the B2B space. So in the B2B space if you think about it like the one of the larger issues is liquidity.

And so if you have like a $10 million transaction and you try and pipe it through a regional exchange today, typically what happens is you will blow up the order book of whatever exchange you're trying to pipe it through. And so you get flipped to an OTC desk experience for anybody in the room that knows OTC. What that is is you get some dude's telegram number in some random place in the world and you have to call them. And when you call them, you say, "Hey, I'm trying to offload a $20 million ticket size." And then you have to negotiate.

And then there's no accounting reconciliation. None of that stuff exists. They typically give you an order confirmation on Telegram. You have to screenshot that, put that in Slack, send it to your CFO, and then you typically get a why are we doing a $20 million transaction via Telegram. Um, so the stable coin space, if you want to bring the real economy into this space, you really need to solve uh for deep liquidity, you need to solve reconciliation challenges across multiple different ERP systems.

Um, and then you really need to have enterprisegrade security and privacy along with that. So um those are one of the the major uh things that we've been seeing in the space. Um and so what stable C does is we typically focus on firstparty transactions. So those are typically in like payments jargon known as a a treasury movement. So consider yourself John Deere and you have like 78 subsidiaries around the world and you need to fund your West African subsidiary.

um you typically use JP Morgan, Chase, HSBC, Standard Charter, uh Goldman, you typically use their transaction banking desks today to move that money around the world. Um and even if you use the correspondent system to get into truly emerging market currencies, uh it still takes anywhere between 7 to 14 days for those funds to settle. So if you're a CFO or treasurer of a large publicly traded institution and you need to move like 50 million because you need to preund your South African entity so they can make payroll or uh build a manufacturing plant or something like that, it'll still take you you have to tell your treasury team to like preund that about 2 weeks in advance. And if you just think about the opportunity costs that are lost with that, you've got 20 million 40 million, $50 million just sitting in the correspondent banking ether just waiting to be settled. And so think about the opportunity cost of what that $50 million could be doing even if you put it in a money market fund that was just generating 3.

3% interest, right? So a lot of opportunity cost lost there. Um and so what we do at stablec is we help large enterprise companies like that move large ticket transactions across the world um and then settle it in real time. And so that's how we're starting to see like some of the major use cases that we're seeing uh in the market for B2B adoption is for companies that have subsidiaries or bank accounts around the world. And like the primary use case is reducing your preunding time.

Um and so that's like the primary use case that we're seeing in the enterprise space. Whereas if you look at the uh retail space, it's typically thirdparty payouts or peer-to-peer transfers where you're trying to send uh money to your, you know, family back in Mexico or you're trying to pay out a vendor in Thailand, all the things. Um and so, you know, in that vein, what we when you're building for enterprisegrade infrastructure, um there's like a few things that are still missing in the the stable coin space. um you know deep pools of liquidity that's starting to change but you we still need more deep pools of liquidity coming into the space. Um one of the most gnarly challenges that we come up against which is also like the least interesting in some ways is like direct ERP integrations because if you're a big company uh you'll typically have like Oracle and Netswuite and SAP and like different u different ERP systems around different subsidiaries around the world.

So you really need to make sure that the accounting and reconciliation uh between web 2 infrastructure and web 3 infrastructure match to the same ledger. So like ledgering is still one of the core pieces of architecture and infrastructure that really creates a moat for a company in this space. Um and so there's that and then secondly um it depends on you know who you're building for like we at stablec for B2B crossber payments like we don't we sell an API to some companies but ultimately the audience that we sell to is a treasurer so you're a human and what that means is that you log in with a username and password to something that looks like JP Morgan Chase or Goldman and you can actually connect your bank accounts around the world and then you can use your stablecoin to move into and out of different currencies across the globe. Um, and so that also requires a large degree of security um, and a large degree of uh, liquidity and then subsequently mapping into 10,000 different ERP systems around the world uh, which is a bit of a gnarly challenge. Um, and so those are some of the things that we're seeing in the space uh, at the moment.

And then from uh one of the other things like as you guys if you're builders or operators out there, you know, one of the other things that we're starting to see is like a lot of companies that come to stable C, they say, "Hey, I don't trade every single day, right?" Like if you're like a large company like Coca-Cola, you're not necessarily moving your treasury into Batswana every day. You typically do it on a monthly basis or maybe every two weeks. So you start you're starting to see these companies hold in stable coin and a wallet that are just sitting there. Um, and so you know what we're starting to see is a lot of these companies are asking, "What else can I do with my stable coin?"

And there's a few interesting branches of logic that emerge from that. One, like the natural concept is, okay, how can I make yield with my idol stable coins? And so, you know, there's a lot of great work being done in the onchain RWA space. So if you want access to tokenized money market funds or tokenized fixed income products, you can now take your stable coins that sit onchain in a wallet and swap them into money market funds, fixed income products. Um private credit is coming on chain too.

So there's a lot of natural synergies there. And then secondly, uh, from a working capital perspective, a lot of these businesses, um, you can use your stable coin holdings in a wallet andor your RWA, so like your tokenized money market funds as asset back collateral to unlock working lines of capital through either DeFi markets or um, securitized lenders on chain. So, I think the space is really interesting at the moment because we're finally starting to see real economy adoption of stable coin. So getting out of like the web 3 space and getting out of like the pure fintech space, we're actually starting to see real like real economy businesses uh come in. And the first use case is for crossber payments and then the second is access to rwas and the third is access to to onchain loans.

Um, so you can get access to uh working capital a little bit quicker than you otherwise would because in any of those contexts today uh even if you park your even if you use capital markets uh today with like a traditional money market fund like yield acrruze daily but it pays out monthly so you have to wait and then there's still a liquidity constraint on getting out of a money market fund. You still need to exit that position. It takes two days and then it'll take another day or two to settle depending on what rail you use. Um so still takes a long time. With stablecoin, you can swap instantly into a tokenized money market fund.

The yield typically acrru daily, pays out daily, and then you can get into and out of 247 365. So, it's a big material lift. Um, and then same thing with private credit if you're looking for working lines of capital. Um, you can essentially take your stable coins and your onchain ras and that'll be your uh asset back security, so to speak, and you can port that to a smart contract to unlock uh onchain lines of credit. So, um, yeah.

So, just to recap, stable C, we're a B2B crossber payments company. We typically serve the enterprise, which means large companies that have subsidiaries around the globe. Um, so yeah, I know we got three minutes left, but I would love to take some questions to be honest because I generally hate listening to myself. So, I'll pause once for any questions out there in the audience. If not, I'll just keep rambling for two minutes.

Cool. Oh yeah, go for it.

Sorry, can you say that one more time?

Yeah, I think the question was compare stable C to other providers out there that bridge currencies. Um yeah, so um there's a few things that there like I I think there's some really good companies building in the space uh that are doing like traditional FX and they're you know they mostly sell to uh companies that are institutional in nature. They're like institutional brokerages or like crypto hedge funds or trading platforms. Um and so you know there you have a lot of good protocols that are being built on chain for for swaps. Um we how we differentiate is like we typically don't deal in the high frequency trading space.

Uh and we don't deal with like we're not like a true FX desk. Like we typic we do FX uh but we are mostly a payments company. Um and so in the enterprise space we don't see that many folks serving the enterprise outside of like the big the big guys. So like if we go into a big deal who we typically see honestly is JP Morgan, Chase and City Bank. Um those are the two like yeah I JP Morgan awesome team like honestly the Kexus team and like the JP Morgan coin and the the Onyx blockchain like they're doing a lot of good work out there.

Um and so when you think about you know what the world looks like in 2 three four years right now you've got a lot of great innovation happening at the startup space. You've got some big incumbents like BBNK and Coinbase and Ripple and Stripe and they're all doing great work, but also the banks while they're typically slow like they're moving and they're moving with force for a lot of reasons because they're, you know, they're concerned, it's in the headlines all the time. They're concerned that their depository base is going to become at risk and so they need to figure out how they participate in this web 3 economy because like from 2015 to 2020 uh most of the stable coin trading activity across any stable coin pyd etc all that volume was typically being done by institutional traders um and it wasn't really until the last like 12 to 24 months that you actually saw payments companies pop up and like you're actually providing uh a utility out into the real world. Not that high frequency trading isn't a utility in the real world, but um you're actually paying out a vendor in Colombia or paying out a supplier in Thailand. Um and so, you know, if you look at uh some of the data providers for onchain data, you're starting to see the actual real economy start to tick up and like payment use cases come on come online.

So, um cool. Well, I think that's about it. So, appreciate the time. Thank you'all.