How to Build a Global Fintech App with Stablecoins I Itai Turbahn

[Music] Next up, I want to bring on Itai to tell you about how to build a global stable global fintech app using stable coins. Please give him a big round of applause. Sir,

good morning, good afternoon, I guess. How's everyone doing? Good. Yeah, great. Okay, so before we start, just wanted to get a feel for the room.

First, who's heard about Dynamic? That's [ __ ] awesome. Second, who works in crypto? Who works in non-crypto fintech? Okay, very cool.

Who's heard of stablecoin? No, I'm kidding. The the the Let's start. So, the the goal of this is how to build a global fintech app with stablecoin. So, we'll we'll talk about a couple things.

We'll we'll first kind of talk very briefly about what is dynamic, why am I talking about this? And then we'll dive into two main things. We'll dive into use cases, right? And how fintexs are using crypto and what we're seeing with how fintexs are using crypto and stable coins. And then we'll talk about the stack and how they actually can implement this.

So, we'll touch on both of those things. As always, we I don't turn into a pumpkin after this, meaning if you want to jam and talk in more detail, I'm around. Uh not for long, but I'm around. Uh so uh just come find me. But very quickly just so folks know why we're talking about this.

Uh I'm the co-founder of a company called Dynamic. Uh we're an A16Z and founders fun company. We essentially do wallet infrastructure. So if you have a login button or you need to spin up embedded wallets in your app or you need to have a connect to an external wallet, we power all of that. Uh we work today with a bunch of folks.

This is this is me and my co-founder. As you can tell, we have lost a lot of hair in the process of actually starting Dynamic. Uh we have a great team going and we work with some incredible folks. So, anywhere from Kraken to Stripe to Wintermute and Animoka and Maggeden. Uh they all leverage parts of Dynamic for their own stack and we'll talk about kind of those details.

Um but let's start and actually talk about FinTex and Stablecoin. So, not sure if folks have noticed stable coins are kind of having their moment, right? It's very It's very subtle. It's very subtle, but if you read between the lines, stable coins are actually having their moment. And and we're seeing that in the data, right?

Stable coin growth is is accelerating. Obviously, we're seeing this across things like the Circle IPO. We're seeing the amount of stable coin stable coin specific chains that are being launched, whether it's stable.xyz XYZ or Codeex or Plasma or Circle New Chain Arc uh are all kind of accelerating this trend more and more, right? They're they're a lot more unique stable coin users and and in a lot of ways it's a real product market fit moment for crypto which is really exciting.

And the reason I say that is is if you think about my kind of calendar for the last couple year weeks and months, 80% of my time is actually spent talking to fintex and non-crypto companies about how they can leverage stable coins, which is pretty wild, right? That's like a crazy crazy amount of shift that happens globally. In fact, I don't think it's crazy to actually argue that if you were to sort and rank the top 50 fintexs globally and then rank the top companies that aren't necessarily fintex but are are in the business of moving money. So, the Ubers and Airbnbs of the world and the global payroll companies, etc. I would argue I I'm I'm willing to take a bet that says the vast vast majority are on somewhere along their journey of evaluating how stable coins and crypto can affect their business, which is this wild wild shift that has happened in the last couple months.

If you were to ask me six months ago whether this statement would be true, I would have told you you are out of your mind. But that changed extremely quickly and we're seeing that accelerate, right? So a lot of these fintech companies are coming in and saying I want to build something. How do I leverage stable coins to do so? So historically the way they did that so if we move back six months ago they would have said oh clearly there's one use case of stable coins which is the stable coin sandwich use case right you start with money in fiat you convert it to stable coins you move it to the other side of the world you convert it back to fiat.

Hello. And at that point, uh, you're done, right? So, the stable coin sandwich use case, right? But what we're seeing now is that's evolving very, very quickly. It's evolving beyond the crypto in the background, just money movement to very deep and sophisticated use case.

And I want to cover kind of a couple of them, right? What we're seeing is that users don't necessarily just want to use stable coins to move money in and out of fiat, but they're using stable coins to start opening US-based accounts or USD based accounts in Argentina or Brazil, right? Where there's a little bit more currency fluctuation. They're using it as a way to gen generate yield in Nigeria, right? These are all use cases that did not really exist at scale a couple months ago.

And a lot of the conversations we're having are with fintexs that want to actually enable that today which is pretty wild concept. So let's talk about how to build this right. So first let's talk about two we'll kind of talk about two things as I mentioned right we'll talk about the use cases and how folks are implementing and then we'll talk about the stack. On the use cases side there really three use cases we're seeing emerge over the last couple months of how folks are using stable coins. non- in cryptonnative businesses but outside those the first one is payins so I uh want to sell a product I can accept credit cards I can accept bank accounts I should be able to accept stable coins in fact I should be able to accept any crypto that's out there convert it immediately and settle in fiat right so the payin use case and we'll talk about that the second one and this is the use case that I'm most excited about is the payout use case.

So, let's say you're in the US and you want to pay a contractor, not a problem. You a them, you same day a them, you wire them money, great. But if you want to do that internationally, that becomes a little bit more complex. And so, we're seeing a lot of these payout use cases, which are really fascinating and they happen across multiple fields that sound very different, but are really familiar and similar, which are accounts payable. So, I want to pay a vendor, so B2B, contractor, and employee payment.

So B2C I'm an a uh I'm a company I want to pay an employee on the other side of the world or remittance C2C I am a person I want to remit money to my family member on the other side of the world right so these use cases all fall into payouts and the last one which is also really exciting is the concept of why take the money out of stable coins let's keep it in the system let's let folks earn yield on it issue a debit card against it so those are all really cool use cases we'll dive dive into some of these. So on payins um as we said it means moving money kind of into in in from stable coins or from any cryptocurrency into fiat very quickly. We're actually seeing this for instance with Stripe. So if you go to Stripe today, you can click pay with crypto. That's actually by the way powered by dynamic.

So you can pay with crypto via wallet. You can pay with crypto via centralized exchange. and Stripe does this really cool thing which is convert that in the background regardless of the chain you're on etc and settle in fiat for the merchant right so that is a really nice payin type flow and it's not just Stripe right so Shopify announced this in a similar way you can use Shopify and as a merchant accept funding accept money in stable coins for the first time right there's no reason why you shouldn't be able to pay with any funds in your account and the merchant settles them however they want right so that's use case number one that we're seeing and that is what I just said so I'm not going to repeat that but uh second one is payouts and again this is this is the one I am most excited about and and I'm extremely bullish on right the ability to send money out and technically spin up a wallet in the process of sending that money out an embedded wallet and have that recipient receive money without having to know anything about crypto or stable coins but receive access to things they couldn't do before. Right? So the flow is the following.

So a user starts or a company. So let's say a company in the case of of vendor payments or accounts payable or in the case of um you know contractor payments. They pay in fiat. The money goes through let's say a zero hash or an iron or or um the these are some incredible companies. They're more in this space like bridge etc.

that gets converted through MTL licenses and and the compliance requirements that gets converted into stable coins that gets sent to a wallet. It can be an external wallet if someone has it, an Argentinian contractor or it can be that the contractor doesn't know anything about crypto and dynamic again we're an embedded wallet company generates an embedded wallet in the background for that user. So the user logs in with their email, logs in with Google and just gets their funds there. digital dollars and at that point they can offramp that to their local bank account. they can do more stuff and we'll get to in a second right so that is the payout flow right actual does this really really nicely uh phenomenal company if you haven't used them yet I highly recommend it um ramp for instance did this recently with dynamic in a recent hackathon that they did right so how do you actually pay out vendors internationally these are all ways to explore and experience this right so folks are playing around with this technology right not at scale yet but they're playing around with And that leads to the third use case that we talked about, the hold and invest use case.

So when I remit money and I open a wallet for someone, right, I open a a non-custodial embedded wallet for someone behind the scenes, do they have to take that money out or can they keep it in their wallet? And that's where companies like Off-Ramp and others play like a super form play. Right? The idea is the following. The idea is that you send money in, right?

You set up a wallet, you convert to stable coins, but at that point you as the end user, the recipient, the contractor or the remittance recipient, etc. have a choice for the first time. You can choose to offramp into your local currency or you can keep that money in stable coins and all of a sudden earn yield on that money or issue a debit card against that money. So it all of a sudden keeps you within that crypto system instead of just being that end toend A2B kind of flow and that's really exciting right because for the first time and the reason we say Neoank for the first time it allows for these global fin global first NEO banks to exist or global first accounts to exist where regardless of where you are globally you're able to very quickly hold dollars digital dollars and get access to a financial system that you couldn't access before a small players exper these are conversations with some of the biggest fintexs out there. They're all thinking about this which is pretty awesome, right?

But all of these flows pretty much have the same stack in common. So let's move now from the use cases to the stack, right? So the stack that you need kind of has to cover all these types of things, right? It has to cover on-ramps, off-ramps, etc. And it kind of looks like this, right?

So you need compliance and regulatory, right? At the end of the day, you still want to make sure you don't deal with OFAC. Um, you need kind of onchain FX. You need to potentially issue cards, right? So Rain and Banks and Wirex are all phenomenal companies.

They let you issue cards against your embedded wallets. You need a combination of and fiat and off-ramp. Fiat on off-ramps and payment processing are pretty much the same thing which are essentially you need a combination of a zero hash or a stripe on ramp or a moon or any one of those uh moon iron in order to move money in a compliant way from fiat to stable and from stable to fiat. You need to do it on a blockchain network, right? and you need to ch choose which network you you you go through and you need wallet infrastructure conveniently given that we're here right so that's the tech stack that you need to kind of leverage and depending on your sophistication you might do more complex stuff right so this is a different view of this right so you need anywhere from debit cards to compliance layers etc uh that this kind of shows a deep dive into the previous view and what's interesting saying developers have this really nice slew of options to choose from, but the challenge is they have a very large set of options to choose from which is very complex.

If you want to like enjoy your like week, go to a friend that's not in crypto and have them try to implement this. just sit back and and observe and you realize extremely quickly how far we are from being able to provide this in a way where anyone any developer can actually implement this. As soon as you start explaining to your friend who's not from crypto about the wonderful adventure of gas and 7702 on EVM, you have lost the pot and that's what's happening today. Right? So it really looks like this.

Right? This is the market map of all these wallet providers and the on-ramp providers and liquidity providers and orchestration providers that you need in order to do this and that's really really difficult and that's where we are today. So we have folks interested in the stack we have folks interested in fintech but the gap to actually get there is non-trivial right. So that's even just the basic decisions, right? If you go into more advanced players like a Stripe or Robin Hood, uh you start asking yourself even more sophisticated questions.

Do I even do this on a different chain or do I do it on my own? Do I issue an L2? Do I issue an L1? Do I even use USDC and let them own a bunch of the yield on the treasuries or USDT or do I go to an M0 or Braille or any one of those wonderful kind of providers and issue my own stable coin? So the level of complexity and questions that need to be answered is really really high for folks and that's where we are today.

So the good news you can actually build this today. The bad news it still takes a while to to sift through all of these. And so what we're going to see in in Dynamic being a part of this trend, we're obviously not the only ones. I'm a little bit biased. I kind of think we're cool.

But the idea is that you're going to start seeing a lot of these providers provide this unified experience, right? You're not going to shop around for five providers and stitch them together uh in order to find your solution. You're going to go to one, right? Just like you don't go to um you know stripe for your credit card and someone else for your a sort right you go to a single provider you go to plaid for all your banking connectivity needs right these are the same things that we'll see consolidate in our ecosystem right so in our case we launched something called dynamic stablecoin accounts which starts combining all of these so you set it up chooses a chain for you does your on-ramping does your off-ramping uh that's your stable coins and you can get and build your own uh version of a global Venmo in 10 minutes and that's where we're spending time and that's where you'll see a lot of announcements from Dynamic is the ability for you to abstract away not just wallets but everything that has to do with getting to that onchain system extremely quickly. Right?

So that's where we're spending our time. Now the the way to imagine is obviously kind of as a full crypto in a box, right? Or stable coins in a box. We have a little bit of time left. So I want to cover kind of two more thing two more very quick things.

So the first one is this is actually already live. So if anyone actually wants to build a global fintech today, you can do that with dynamic very quickly. If you go to our docs, you can start seeing how to send USDC by buy USDC, how to earn yield like a or Moro, how to do crosschain swaps, right? And that's going to keep growing because developers really should not care. It should just kind of work, right?

Uh if you want to talk more about this, you can reach out to me. There's a few folks on our team. Matt's here. Uh but in V2 is coming soon. Don't share.

This is a secret. I trust everyone here. So, you know, uh don't tweet about it. But if you do, tag me. Uh, but let's end with some predictions because we have a little bit of time left.

I want to end with some predictions. Um, just for the sake of, you know, if I'm if I'm wrong, no one's going to remember. But if I'm right, and here you'll be like, boy, like they damn it. They're great. They they they predict.

So that's that's the hope. So if I'm wrong, just forget this ever happened, right? But very quickly here here's what happens next, right? Here are the predictions, right? So we're we're going to see existing fintexs uh all add stable coin support.

So again if you are to go and ju just ask chatptd rank the top 100 fintex and check on that in a year 100% of them are going to have some sort of uh crypto and stable coin functionality. That's going to happen next. Second is what we just talked about is you're going to get this massive consolidation as to an offering that's a full stack offering for crypto. You're not going to pick five providers. It's not scalable.

It doesn't work. It doesn't work for a company the size of a kind of a a ramp, right? They need a single source that works with them on everything crypto. Then you're going to see this really really cool thing happening. A lot of the companies in fintech today are country first, right?

So is a US-based company. It's a it's a it's a phenomenal neo bank within its system. New bank in Brazil is the same way. Revolute in parts of Europe, same thing, right? They're country specific.

They grew out of that. You're going to start seeing the reverse, which are global first type neo banks, global first type Venmos and cash apps. They're going to leverage these crypto rails at scale to build these global businesses that have these massive economies of scale. And so what we're going to see in a year, we're going to see all these new brands come up. It's an exercise in both technology, but it's mostly a branding exercise and a marketing exercise.

It's like this dark art of building consumer product. I have no idea how people do, but that's going to happen next. And that's going to be really, really cool, right? That's going to change your next set of fintexs that are out there to be global first fintex. They're going to have this massive scale and then stable coins become a global rail and we can all go to sleep.

That's pretty much the prediction. So with that, I'll end with one um tiny thing which is a lot of what I talked about is actually very conveniently available in a report that we just launched an entire 15 minutes ago uh in a PDF version. And every logo that you see here are folks that helped contribute to this report on stable coins, right? So anywhere from RAMP to Inc. uh and the Kraken team to Zerash and Stargate all kind of helped pitch in on building this report um to kind of kind of give a guide for how we're all seeing the evolution of this play out.

This is available today, available on Twitter. Did everyone scan it? Yeah. Cool. It goes away in a minute.

Okay, I'm at zero minutes. Okay, so with that, thank you

thank you so much for uh that overview. I think the coolest part about all this thing is that all the infrastructure that's been worked on over the last few years is simply just now ready to make that instantly available um and uh make these applications directly without having to worry about any of the logistics. Um I also want to actually thank it for one quick thing. He actually flew in just to give this talk and he's going to fly back right now. So, it's a very good reason and we really appreciate the fact that uh you did this on your kid's birthday.

He's nine. There you go. So, thank you for for making this happen and uh we really appreciate that. [Music]