Nick van Eck - The Next Waves of Stablecoin Adoption - TOKEN2049 Dubai 2025

All right, I'm here to talk about the next waves of stablecoin adoption. I'm Nick Vanak, the CEO of Agora. We are a stablecoin issuer and infrastructure platform. This is the biggest revolution to me since cloud. Blockchain based finance is going to eat all of traditional finance and payments over the next 20 years.

And as we saw over the last 25 years with cloud infrastructure, B2B SAS, I think we're going to see a similar growth and you sort of evolution in industry when it comes to blockchain based finance and stable coins will be at the center of that and are really the first building block. There's about trillions of dollars in the Euro dollar market today. And if we want to talk about why, you know, shorter stable coins are are valuable at a high level, it's, you know, crossber payments and access to dollars globally and frankly they're just a much better euro dollar. So I think at the low end in 20 years, we're going to see the stable coin market at, you know, 10 to 15 trillion dollars and really just eat eat this whole pie. Uh, and for those that are unaware, Euro dollars are sort of just offshore uh deposits of of dollars in in non US banks.

And this is really going to solve the global banking gap. And we're seeing this today in places like Latin America, Southeast Asia, Africa, where now you can download an app and all of a sudden be your own bank. And this is especially powerful for people who have been underserved by the global banking system. And we've seen this now, you know, with Binance sort of acting almost as someone's own super app, right? in economies where they had you sort of uh low banking access or were underserved by the incumbent players.

The main other thing that we've sort of seen this year is a US policy pivot. So for the first time in what feels like a very long time, the United States government is fully behind stable coins and digital assets. Scott Bessant, the US uh you secretary of the Treasury saying, "Hey, we're going to keep uh the US dollar as the dominant reserve asset and we're going to use stable coins to do that." And I think it's because he sees the clear value uh of stable coins and usurping euro dollars and frankly being a better form of money and payment system than what we have today. And when you have an army of private companies issuing dollars or building technology or financial service applications around US dollar stable coins, it's going to push uh stable coins into these markets in a way that the US government never could.

So we're at about 230 billion in circulating supply today. That's primarily made up of USDT, USDC, so early movers, but ones that have really built network effects over the last 10 years. And I think we're going to start seeing an evolution not only uh in sort of stable coin models but also these yield coins taking share of of some of this market. And you I just wanted to share a little bit of uh data on where activity is occurring. And this you sort of goes back to the prior slide where in developed markets a lot of the activity is just trading centralized crypto trading but it's really in these uh you know emerging or developing economies where you're seeing a lot of stable coin activity not happen on exchanges and happen because uh it's cheaper for remittances or because folks just want to hold dollars.

I was in Turkey last week. Tether actually trades above a dollar in Turkey because there's so much demand to get out of the local currency. And I think that's uh going to continue over the next 20 years. And you know what really has brought us to that $230 billion value is primarily trading, right? It's trading a little bit of EM dollar demand and DeFi, but I think you're going to start to see um a number of things that start to be growth levers on the adoption of stable coins, which we'll get into in a moment.

And you've also finally started to see uh the sec like the non-speculative adoption wave that we sort of all have said that will be coming over the last few years. So if you just look year to date and this is this data is you know about a week off now but stable coin supply you know grew mid- teens while the market cap of crypto itself you know is down 25%. And that is like a pretty clear divergence. And you that's coming from crossber payment companies, you know, banks and in non- US jurisdictions that are actually starting to use stable coins as a better form of money movement and just accessing the dollar. And so I think a number of different models are going to drive innovation here.

You know, so stablecoin 1.0 was Tether, right? They were the first digital dollar used primarily uh by trading firms and exchanges to move money from venue to venue and are different prices of Bitcoin, ETH amongst these venues. You know, as crypto companies for a long time have been starved of access to the banking system. You know, we're starting to see that uh with the US uh change in policy, but we're not we're not quite there yet.

Uh you had the 2.0 wave which was uh you sort of the single partner model which was USDC you know leveraging Coinbase's distribution Gemini trying to leverage Gemini's distribution Binance trying to leverage their own distribution but you know amongst all this you had everyone else that was touching stable coins cut out of this economic equation but also this relationship many of these firms were not customer first right and so you what we're doing with Agora is trying to bring everyone else sort of under this both econom omic umbrella through income sharing but also just deliver better service right build products alongside them offer zero cost fiat on and off ramps and ultimately we think that this is you know sort of this B2B approach is going to drive much greater adoption um and frankly be better right if you look at uh the crypto ecosystem these two large issuers are sucking billions of dollars out of these ecosystems every single year when you could be pushing that back to the builders in the space and frankly growing growing the crypto pie and also I would the uh the traditional company pie as they come into the space. And so what's next? That's where we are today. Um but we see a number of growth levers that are really going to take stable coins to the next level.

The first is payments. This is coming both at the merchant level but the crossber level. You know the FX market. Uh today US dollar stable coins are about 99% of the stable coin supply. We'll see that change a bit.

Um, and I would say in a dramatic way to the state of the market today, but we still believe that US dollar stable coins will be the vast majority of of issued stable coins as institutional finance and applications and and products come on chain. Stable coins are going to be that cash mechanism in a very similar way to how Tether was used at the early days of the crypto market to move uh between uh venues. Enterprise treasury management. So what I mean by that is think of Pepsi, right? They have uh suppliers in Mexico, Brazil, Indonesia, Singapore.

They're moving money between their entities 24/7 and they have to preund many of these accounts. They can now use stable coins to move money, you know, 24/7, settle instantly for a fraction of a cost and drive a lot of efficiency gains for traditional corporate business, continued EM demand, right? So that 1 billion plus population, I think, is going to get onboarded to stable coins. And then we're also going to see a large amount of adoption when it comes to trade finance. And so if we just take uh merchant payments, most people don't know this, but there's many middlemen in the stack.

And so, you know, the move to stables I think will bring a lot of attractive unit uh economics to the merchants who typically had to wait 30 days to get funded. They can now receive that money instantly and are cutting out a lot of the middleman fees, right? you know, it's two to four percent or more depending on where you are that they're paying to these acceptance networks and you know, acquiring banks, uh, you know, payment aggregators just to, you know, run their business. And so, you're going to see, uh, their margins expand in a really material way. If you look at businesses like Walmart, they're super slim margin businesses, but they're making tens of billions of dollars a year.

if you uh take their sort of gross profit from let's say 10% to 13% that is a meaningful amount of cash flow that goes back to the business and so once this really starts I think you're going to see it it take off uh in a in a pretty exciting way the other one is is crossber payments for anyone here that has moved money cross border whether you're you know an individual or done so as a business it can take days your funds can get held up you know for sort of unknown reasons um and frankly that results in a lot of different problems s, right? Uh, you have to preund accounts. Um, you have lower capital velocity and lower capital turnover. And so we started to see um a lot of PSPs and payment companies start to use stable coins because you have instant settlement and it's just that much better. And it's not like 10x better, it is 100x better.

Uh and so I think you know we're having a lot of early adopters now that are you the smaller hungrier companies the startups right that are willing to take risks because they can go to their customers and say hey we can deliver a much better product than the existing big guys but what I think will h happen in about 3 years uh is the big guys will be like wait they're able to undercut us and still make more money we need to aggressively move into stable coins and so that'll drive a lot of non-speculative uh demand for stable coins uh you know crossber payments on the retail level you know you see this with uh individuals today remittances can cost you know 10% or $10 on a $100 transfer stable coins are just that much better right and so I think you're seeing a lot of uh individual adoption and then individuals who are using this to send money back to their family actually start to run their businesses on it and so you're seeing pretty uh I would say high levels of growth uh globally in terms of what percent of those remittance you know rails are done via stable coins today but that's a lot of headroom right if we truly believe that stable coins are you know a 10x or even 100x better solution for crossber payments I think that this is the lion share in in 10 years and you know India's at 10% today I wouldn't be surprised if they were at 80% or 90% in 10 years um and just to to te off of payments you know there's a lot of opportunities outside of you know float income for stable coin issuers uh and I think you're going to see the rise of many of these issuers start to tap into to transfer volume. So you know what are we doing in crossber payments partnering with local providers um whether those are uh PSPs localized exchanges you kind of have to build build the whole network and so that's what we're focused on doing and you can see at a high level you know why stable coins are so much better than uh the existing systems the next big market is going to be FX and so you know we're seeing this today where a lot of different trading firms uh have the dollar leg on chain with USD stable coins, but they don't have the euro, they don't have the Mexican peso, they don't have the rupia on chain. And so this means that a lot of the processes are still extremely manual. I think you're going to see over the next 3 years the rise of a few dominant non- US dollar stable coins that start to be used in a traditional FX markets so that the entire life cycle of the trade and settlement can happen on chain. And I would like to point out that where these folks, you aren't, they're not really going to be able to monetize as much on the float as US dollar stable coins.

So, they're going to have to figure out a way to monetize on that throughput and that transaction volume. And so some of the things that we're doing is working uh with local OTC firms uh to build pairs, you know, against the Thai bot in in Thailand, the LRA in Turkey, uh working with local exchanges like Bitso to set up, you know, MXNB pairs, you know, both in in DeFi but also on on centralized exchanges. Um and build, you know, non you know, broader sort of non non-USD liquidity. Talking about, you know, institutional finance, I think this is still very early days. you know, the only real products that we have on chain are, you know, uh, onchain treasury funds, which are interesting, but they're not interesting if they're just on chain.

What you need to do is actually have liquidity for these vehicles. And so, what we've actually done, uh, is develop a product at Agora where you can have, you know, $50 million of Biddain, but if you're a market maker and you can't get out of that 24/7, you're not going to touch that. Well, now what we say is like, hey, we'll take that B as collateral against AUSD. Now you have a stable coin that you can use on chain, move to different venues, and then we'll offramp that behind the scenes. And so I think there's a lot of work to be done merging both stable coin issuers and a lot of these folks that are trying to bring uh traditional products on chain and and we're helping to do that.

This is some some of the things that we're doing. So enterprise treasury management which is what I was speaking about earlier with regards to Pepsi you have settlement time improvement you know better operational efficiency you know you can have a higher compliance rate too by building these these private networks and sort of KYC enclaves uh which we're working with a number of partners on and so I think these folks will be uh slow movers but they'll be really sticky when it comes uh to just having assets on chain and so I think uh you the fire boxes of the world and the early custodians are sort of the V1 of what these systems look like for more traditional businesses like like the Pepsis and I think you'll see adoption happen at their supplier level first but then that'll start to move into the broader corporate and so this will be a huge driver of stable coin demand um and it's not just large enterprises but it's SMBs as well I think SMBs are typically the first movers but it's these big boys that are moving money 24/7 globally to different jurisdictions in and out of different currencies that are going to really benefit the most from having a financial system fully on chain and then EM dollar demand, right? So, you just see this like the growth of stable coin adoption in emerging markets where they're just trying to protect the value of their assets and their wealth is enormous. They're not, you know, some of them are are speculators and uh you know, active sort of within traditional crypto tokens, but many of them just want to save their money. If you've grown up uh in a region where you have hyperinflation or a low rule of law, you know, through no fault of your own, it's really challenging to build wealth for you and your family and one of the beautiful things about stable coins and and frankly blockchain technology is that you enable anyone to be their own bank.

Uh whether they're, you know, living in a in a jurisdiction with yeah, hyperinflation or or uh a low rule of law or they're a refugee. And to me, like that's one of the the beautiful things about this space. And you can see this in the data uh you know when it comes to places like Argentina uh and Mexico. And then lastly, you know, trade finance is the other uh big opportunity that we see. So I think a lot of folks don't talk about this enough, but Tether is one of the largest credit providers in all of crypto and it's because they're smart.

They know that if they are starting to put debt on their token, they're not only pushing adoption and growing supply, um but they're building like real utility and solving real problems. And so I would expect that, you know, other issuers who think similarly are going to start getting into the credit game because you can also deliver credit at a much lower rate uh without pricing the risk any differently because you're making, you know, 4% or 5% on the back end. And this is something I'm I'm super super excited about and a little bit of an an alpha drop. So this is this is some of the things that we're doing sort of across the space and some of the growth growth levers that we see. Uh I really wanted to cover the things that were primarily non-speculative demand because I think that's what's going to actually take this industry from where we are today uh to you know become a true 10 trillion dollar industry not just in stable coins but really as blockchain looks to eat all of traditional finance and and the world of payments.

So yeah, thank you