Paypal workshop

all right um I guess we will go ahead and get started with this uh I'm told this is the first Workshop now for um unstable Summit so thank you for joining us uh my name is Edwin naoki I am the CTO of PayPal's blockchain crypto and digital currencies unit I am joined here by Elon yeah I'm the engineering manager for uh the blockchain team at paxos which is the um regulated issuer of PayPal USD happy to be here and uh yeah we're both happy to be here and we are uh here to engage all of you in a conversation around what you want from your stablecoin um as you know PUSD is still fairly young in this space uh and that gives us a unique opportunity to engage with all of you to help steer the course of how we make this more useful how we make this more valuable and how we make this uh more uh easily accessible for you all in the developer ecosystem to participate uh with us in py USD so let me maybe start with a short history of how uh py USD came to be and what PayPal's involvement is in the crypto space um and then we'll jump into a conversation uh where really we want to hear from you and we want you to be uh your voice to be part of the evolution and the journey of how we move forward with uh py USD as the premier stable coin for payments um so uh as we're doing this feel free to get close um we want to have this be a a discussion rather than a uh uh a lecture um but I'll start off by just sharing a little bit about the journey to PUSD at PayPal and Elon will speak a little bit about the structure of uh our reserves and how uh we work with paxos around the issuing the minting of the of the coin so you know our goal uh within the bcdc unit at PayPal is to help move Commerce uh uh from online to onchain in much the same way that PayPal helped move Commerce from offline to online some 20 plus years ago um we started this journey at a really interesting point where we understood that uh finance and payments and the digital space were really starting to evolve in new and interesting ways uh we saw that there was huge demand coming from our consumers around a great greater amount of choice in how they pay and how they use uh uh and interact with financial systems and services and at the same time we saw saw that there was a tremendous opportunity to improve the way that money and value moves globally around the world now we knew that we couldn't move from sort of zero to issuing a stable coin overnight so we went through a process where we helped to uh bring uh cryptocurrencies to our consumer audience uh by uh launching in 2020 with our buy andell uh business some of you may or may not know that today you can actually use Bitcoin or ethereum or a couple of other currencies to actually pay at almost any of the 30 million plus uh Merchants that we offer at PayPal if you have uh a crypto in your PayPal wallet um you can use that to pay almost any PayPal Merchant around the world today um and that was a way that both we got additional uh visibility into how to operate uh uh with paxos and and uh bring these to Consumers uh and also to work within the confines of our regulatory environment and with our uh uh stakeholders around the world to really start to bring crypto to the masses and that was really the first step that we made into this space a short while later we expanded to venmo we expanded to the UK and we opened up the uh uh the wallet to being able to receive and send uh uh crypto to other external wallets uh anywhere else in the world we felt from the beginning that this needed to be an open system we felt that we wanted to be uh uh uh responsible participants in the ecosystem and we want to promote and help folks get on board with crypto and that's why we partnered with folks like Ledger and uh metamask and Phantom to bring easy and efficient on-ramps and off-ramps so today again if you want to fund your metamask wallet with ethereum um you can do that in two clicks uh with your PayPal account uh it's really fast and and simple but that was never really the final goal our final goal was to be able to streamline payments and streamlined transactions uh and to do that we knew that we wanted to have a stable safe easily transferable source of value and that led to PUSD our stable coin which we announced and launched in August of uh last year um so we're about six months in now if I'm doing my math correctly and um you know we're thrilled with how that's going but as I said we are now in the sort of early stages of really coming and um engaging with you as Developers and as builders in this community and the point of our conversation today is to really uh help us understand how we can evolve this to make this more useful for you so um before I get into that let me turn it over to Elon to talk a little bit about how uh PUSD is structured and the role that paxos plays uh in uh in the issuance and the reserve management for that yeah thank you um really interesting hearing about the the history and where we're going and where we've been so Pax is the regulated issuer of PayPal USD uh we are the infrastructure platform and Technology provider to Enterprise um uh Partners like PayPal here and paas's role is to enable the Enterprise Partners like PayPal to build their stable coin on our regulated infrastructure and um to be able to use it in an agnostic way on their front and for and users and customers uh our issued stable coin PUSD and its reserves are strictly um regulated by uh the New York Department of Financial Services that's the nydfs one of the top Regulators in the country and all of the reserves are held 100% in US dollar deposits Securities or not Securities absolutely not uh us treasuries and cash equivalents meaning that customer funds are available for oneone Redemption at any time uh our reserves are also audited monthly by a top auditor and available on our website including down to the qip so you know exactly what is making up the reserves at any given time our customer assets or customer assets are protected from bankruptcy and they are fully segregated this is um even by law so the New York baking um law means that customer assets are always their assets if uh paxus is ever insolvent for any reason we are unable to use those deposits or any of the reserves to um use for our own business practices or for obligations for our own debts and um this is extremely important for any user of PayPal USD to know that their token is their token on chain it can never be used by paxos for our own business uses and I will pass it back to Edwin to talk a bit about payments and kick us off with the workshop yeah so we're not going to spend a ton of time beyond that talking a little bit about the advantages of of PUSD this group more than anybody knows how stable coins work and and and all of that but one of the things that we feel like we bring to this party is the payments aspect because a lot of times when we talk about sort of moving funds around and moving value around we talk about it as if it's a sort of oneandone operation but those of you who may be um you know working with payments uh those of you who may need to collect payments for a game or an application that you're working on know that the real world is a little bit messier than that right there are refunds there are disputes there are claims that happen uh and you know our goal with PUSD is to be able to also facilitate the larger ecosystem around subscriptions around um uh uh customer servicing around disputes management around returns around all of those things that really make a payment more than just the movement of you know some amount of value that that that goes back and forth um and that's sort of what we want to bring but it's also you know uh uh uh what we think is uh valuable for you all and what we want to get to now is what you think is valuable for you all because as I said there is an opportunity we're still fairly early on to um direct how we engage with you how we integrate the kinds of tools and services and and documentation that we offer um to make integrating with payments not just integrating with stable coins uh useful and easy for you in your daps uh and um uh uh and applications so we had a couple of questions but you know this is a small group it's fairly free flowing um you are welcome to come further forward to engage in the conversation we do not bite much um but uh you know again this is really about um how we make this better for you and the first thing that I'll mention is you know as we've been talking developers and and um entrepreneurs around the organiz around the ecosystem uh one of the things that we heard was Hey how do we get started where's your test net how do we get a faucet so that we can start playing with this uh and so I'm pleased to announce that in conjunction with paxos today we are launching the PUSD uh test net on spolia um so if you go to faucet. taos.com there are some cards back up there um you can start getting started with uh py USD on the test net um you can start um to uh engage with that um but you know we've already started to see some really interesting uh real world use cases uh that I'll just start off from and then I'll I'll turn it over to all of you to help us understand what you want to use your stable coins for um about a month ago uh our Ventures R in PayPal Ventures actually did the first uh VC funding with PUSD so uh we invested in a company called mesh um and a significant portion of that funding round was uh funded with PUSD which eliminates um you know a lot of the uncertainties around wires and Bank transfers and other things that happen for uh Founders at the sort of throws of their funding rounds uh we have worked with uh our vendors so we do some of our vendor payments now from PayPal with PUSD and and allow those people to get paid more quickly and more readily uh uh uh and more efficiently for them uh and we've been working with part Partners like yellow cart to be able to also streamline the movement of value across borders uh so that you can now send money from the your venmo account in here in Denver to uh a recipient in Malawi uh for a much cheaper faster and and more transparent uh uh rate than uh you could with traditional remittance services so these are some of the things that we've been really pleased to see uh developers and and Founders and entrepreneurs doing with uh the stable coin so far um but again we're here to learn from you so um what would you like to see what are the kinds of use cases that you'd like to see what are you thinking about um what are the things that we're not seeing uh in this space where PUSD could be helpful and I'm going to pass this around and I'm going to randomly call on people if people don't uh actually say anything so be forewarned yeah anyone want to kick it off yeah come on in um yeah uh I do a l development and I work at open Zeppelin um which I know some of the components found its way into both the uh the paxos and then later PD so I guess I'm uh I guess I'm curious do you have any kind of comments on the design or unique aspects of the token itself that's been deployed in ethereum in terms of like how You' compare against usdc or tether whether it's gas efficiency or additional features I saw a few things in the code so maybe I I have to ideas about it but I'd love to hear it from yall sure yeah what was your name uh Michael Michael all right thank you for the question uh and for open Zeppelin really great uh yeah so we tend to use as many standard pieces as possible right we want to make sure that our token is extremely reliable um more than anything else and safe so having tools like open Zeppelin have been extremely helpful in that process um and we have you know it is upgradeable through the proxy path as is most uh stable coins at this point and so we are developing a number of new features actually Henrik here who's in the audience is um is leading the team that's doing a lot of that work and uh maybe you twoo might want to connect after too uh yeah so some things that we are excited about are things that are um readily available in some other tokens but I'm excited about some of the use cases that we can enable with them through our Partnerships with PayPal and through through other Partnerships with other onchain uh companies related to you know delegated transfers right um using something akin to EIP 30009 um to be able to do that is something that I'm really excited about um gas efficiency is something that I know we're looking at and looking at improving how we can do that while when we were launching the number one thing as I mentioned was security and stability at the beginning and then additional features that we're looking to enable are things that um we're actually I would love to hear from you all as part of that as well how important is account abstraction in you know in servicing those types of wallets better how can we do um improvements on our side as well I would almost turn the question back to you is there something that you wish was in there that you maybe don't know of or do you see of any or do you know of anything that you feel like would be awesome to have a stable coin adopt but you haven't really seen adopt yet um I would definitely second like the account abstraction support but with the caveat of what will account abstraction look like when it's kind of become stable um we worked with the ethereum foundation to audit them so we know that it's still kind of a work in progress in terms of how wallets will support it but but but I saw the the delegation by Sig which is just kind of General metat transaction support so that's great to have because I think that's the number one thing if someone has a stable coin in their wallet they might not have ether in it too so having someone else transferred on their behalf is like a great much better user experience um I guess other than that like maybe uh I I know the solidity compiler version that's currently being used is like 4.9 but you're still using safe math and other things to protect against that but I'd be curious to know if you you think it would be worth using a later compiler uh I know there's a balance between using Code that you've already secured and you know Works versus upgrading for the sake of just staying up to date uh but yeah curious if you have any thoughts on that yeah it's something we're looking at and actively working on um a bit to to be able to upgrade to a newer version of course we again wanted to just be safe when we launched and so that was the number one concern um and now that we have more time and are able to put more resources into how being thoughtful about what we upgrade to and how um is something that we're we're definitely looking at um as far as the compiler version is concerned sweet um yeah I guess one final oh go ahead sorry yeah go ahead I I was just goingon to ask is there any considerations for going cross chain and if so or have you thought about any ways you might do that similar to like how usdc is doing it or um yeah if there's any considerations in your road map for that yeah it's it's almost like I planted that question so I I was going to say that you know we we've designed PUSD from the beginning and our it was our intention to be uh multi-chain from the start um we started with a fairly standard erc20 uh for compatibility so that we could very quickly engage and get the um the acceptance and the uh distribution that would really allow for more of these use cases to be relevant right like the yellow card folks implemented very quickly because it was already an erc20 uh we were able to leverage the uh existing expertise and the security guarantees that paos had against some of their additional existing contracts because we were able to do that um but it was and has been Our intention from the beginning to be multi-chain um we continue to evaluate various l1s and l2s for what those next chains will be um actually maybe an interesting aside or what are the interesting chains for you because again we have our ideas but um there's nothing better than actually hearing from the makers that are that are actually using them um but to to sort of get back to your earlier question we very intentionally went with something that was not revolutionarily different um because we wanted it to be easy for the metamasks for the ledgers for the yellow cards of the world to get started with it and now that we have that base we're here to try to figure out what are the right Evolutions that then add that value on top sweet thank you so um hi my name is Rio um actually have paxos but I mean I have a question to you because you you mentioned the whole um the refund topic so back in the day I started a couple of startups and one of them was in a was a Marketplace and um in the whole group of friends of uh of Founders back then there was like always this pain of like you have to deal with these claims the refunds it was a big part of your business that you didn't really want to worry about I know there was startups trying to to White Label that your final solution for you know all kinds of marketing or marketplaces um I don't think it was ever really solved in the white label so you mentioned that you want to bring this in because PayPal solves this of course or solves it for eBay and stuff like that and so I'm really curious um I always say know see the the crypto space or something it's sent and done um and so I'm like really to hear if I'm a developer that is interesting to sell products whether it's a game or in-game product or whatever how do I deal with claims and and refunds you know a big question that developers have to deal with what is your what is your thought on that yeah so you know I think that the way to think about that is that there's sort of a payment layer right so that is the movement of well so there's the transaction layer which is the movement of value in this case on chain um and then there's the sort of Commerce layer that sits on top of that and so that actually starts even further back before the refunds right because you need if if you're receiving uh whether it's stable coin or crypto to a specific wallet address you first need to be able to associate that with an invoice or a transaction or an order or something else that comes in so there's a layer involved that sort of starts by associating some transactional element that you have in your system with with regards to a purchase or an order with the actual value transfer that happen there may also need to be some uh engagement with things like antifraud and and and risk behaviors that then come in to make sure that those payments are um are legitimate and that both sides are protected uh from that once you have that um sort of connection now you have the ability to be able to do things like reversals uh refunds and other sorts of things because you're able to associate a larger transactional context to the movement of value across chain that's not always going to be possible for straight transfers for you know movements to uh uh unhost wallets and various other sorts of things but for us the idea is that we can actually tie a you know for example when you are doing a transfer into the PayPal system today of any crypto um users have the ability and really the recommendation that a unique wallet address gets generated for every one of those transfers for merchants we can then associate that or we would be able to associate that with a specific order or specific activity that then allows us to understand sort of the traces and the movements of those of those flows across so those are the kinds of things that we're thinking about as layers on top of the actual movement of py USD that we can then bring um through sdks uh we have a partnership with fire blocks for for merchants that um you does settlement in PUSD um and other sorts of things so that if you are building a you know you know uh a a great game if you're building something um you know a Dap uh that has a Commerce capability that you will not only be able to associate the transaction on the way in with whatever your order is but also that you'll be able to do a lot of that post-transaction work on the back end and again these are the kinds of things where you know we're still early in being able to put all of this in putting all of this together so this is where you can help us to say is this important right there's a there's a view in crypto that it should be one and done and that the irreversibility is a feature and therefore you know dealing with things like returns or disputes just shouldn't be part of the equation I I'm not sure that all of our Merchants would necessarily agree with that but if that is the if if that is a strongly held belief here that's actually a really important data point for us yeah in the back um hey uh H roads uh the company's Friday building Consumer Credit I know Paul bis as well um and actually weirdly Henrik you and I met at I think at a at a Bitcoin conference in La maybe six or seven years ago oh yeah um so I actually I think the opposite is true uh I mean the idea that immutability is something that consumers are desperate for as opposed to returns refunds warranties that's absurd um and actually as you're describing the features that you're layering um I'm I'm curious and I I'm not trying to like ask anything proprietary but are you bumping up against uh MasterCard Visa are you starting to think about that service layer all the way up because arguably that is a large part of their value I it's a great question here I mean I don't know that um I I'm not sure I would agree that that's a huge part of their value um you know certainly MasterCard and Visa which you know our partners of PayPal and and and we work with them a lot on our Fiat business um they provide a way of moving value between Banks and between issuers and acquirers and a fairly efficient way globally um you know I think that you know for example one of the reasons why people prefer to use PayPal and sites that they're not familiar with is because we offer a set of guarantees on top of that um you know a lot of people don't know even in the crypto space we've extended that so if you're holding crypto with us and your account gets hacked and uh and taken over and somebody extracts a bunch of crypto we guarantee that up to 50 grand um uh and those are things that we do as a payment provider that is not associated with the banking rails or the crypto or the the card rail I didn't mean versus I I meant like Visa Mastercard versus crypto just saying that the service layer uh you know life is messy I I I get it yeah I I I guess my point is that you know I I I think that visa and MasterCard you know their uh their main proposition right now is to be able to facilitate that actual bottom movement of funds between Banks um and it's the service providers that are already providing like PayPal um and others that are providing that value and I think that those will always be the folks that provide that value we think that we're pretty well positioned to do that into the crypto space because we've got a lot of that infrastructure and and and support already um I don't think that we'll be the only ones uh by any means but I'm not I'm not sure that that's an area that visa and and MasterCard are particularly worried about with crypto I think they're worried that it's going to that crypto will come and start to eat into their settlement uh activities uh more than that thanks for the question question but you know actually I think um you know one of the questions came up up here that I'd love to to to dig into a little bit around cross chain uh support um what are the chains that you all are interested in if we if if you were sitting in this seat and you could direct our folks over at paxos and our folks over at PayPal and says we're going to launch a new chain tomorrow or a new L2 what what should that be Sal all the rolls and real okay and and and and and those were easy but I'm going to make this a little bit why ethereum classic is the largest proof of work evm largest proof of work smart contract Network proof of work is proven proof of stake is not it's proving right now but it's not proven security okay mutability on the L1 mutable in the contracts and the assets on top of it sure but on the L1 security stable okay that's why so that's the that's the argument for you were talking about integrating yep it's supported everywhere okay I would say does it have significant tvl over roughly 200 million has it been deployed and operating safely for at least a year and as a rollup does it at least try to adhere to some of the mechanisms there's going to be safeguards and caveats but has it it genuinely implemented some of those features um to the point where it can be considered a somewhat safer than like a normal side chain yep and in the case of polygon is just the biggest one that people are using right uh that is a side chain okay and here you said salana um uh robust non transferable uh token standard I mean I know you can do so bound but the truth of the matter is when you're dealing with these kind of things at a certain point you're going to be ID either you know pseudonymously or whatever it's got to be tied to a person fraud Etc and Sol's got a robust non transferable St okay anybody else things I names I did not hear include s include Aptos include near near yeah Bas base Stellar yeah okay interesting okay I'll take that note um was not expecting ethereum classic to come up so the hash rate just moved over this year that's why great um all right um maybe one other thing for us and then maybe we can open up for some questions um some I mean that you've been asking some great questions so far but um you know as I said we just launched our um in conjunction with paxos we just launched our faucet and our test net support um which we're excited about and I hope that you will uh start to engage with at uh faucet. pax.

com um but what is your preferred integration mechanism straight apis straight to the blockchain would you rather you know there's a huge uh presence here from um uh AWS over at the main conference for example would you prefer to go in through that or through fireblocks or through other um you know sort of uh uh providers and and platforms um what what what can we do to make it easier for you all to use py USD other than just handing out a bunch of cash is is there a specific use case in mind like retail def uh it's your specific use case that you want to do in the case of defi uh it would be listing any how your erc20 compatible what you're yeah so I I do security work for compound as well so we list assets as collateral we also have like major stable coins like tether and usdc tether is a good example of a it's kind of erc20 but there are caveats to that so saying uh H having clear documentation we actually have a checklist I could send to yall that we tell every asset to follow so just to very clearly post this is how we're erc20 compliant these are the potential risks you run integrating with us we could pause we could Blacklist but if we do this is a team you should get in contact with or rather this is how we you should want to coordinate so for example usdc upgraded their token about a month ago we had security monitoring that detected it and we're like well it looks like they upgraded nothing broke so I guess we're good but there was no for warning right and we just we saw an update after like a day or two where they were like this is why we did it super minor stuff but uh I would say like a big Advantage would be to say hey this you don't have to say everything because there's some advantage to being obscure about your security posture but saying this these are the policies you can expect from us and yes we will follow the law if there are sanctions there we will do this but in general as a def5 protocol as long as you can accept these risks and if you ingrate with usdc or hether you probably already do you don't have anything to worry about got it okay so that transparency absolutely other things how about in the nuts and bolts you all know how to do this and we just just need to get out of your way is what I'm hear in I've got I've got I've got a a a specific use case and I'm probably the least technical person here I put on events like this one so I'm more of an event producer but I do this in in Denver New York Paris Brussels Singapore Korea you know it's very International when it comes to the web 3 Global crypto conference circuit there's all these side events and I'm responsible for managing the payments to all of the vendors I always like to use local uh producers for swag um musicians venues um none of them none of them ever accept crypto the key to I mean getting getting them to accept crypto takes an onboarding step you need an on-ramp and an off-ramp before you can accept the payments so I'm wondering what's what's like PayPal's role going to be in I guess onboarding International small businesses uh and as a step to actually making payments here yeah no it's a great it's a great point and and since you mentioned swag I should mention here that there are some beanies on the back here that uh you can grab on your way out um it's uh it's still a little chilly here in Denver so uh that might uh that might be something for you um look we think that on-ramps and off-ramps are vital um you know we like I said have started in the US uh you know with our customer base to make it easy for them to onboard onto crypto more generally but to PUSD specifically um that if you already have a PayPal account uh or you're dealing with a PayPal Merchant it's pretty straightforward uh you do have to go through some kyc and you have to go through because in the US there assets and so there's some some uh uh information reporting that we need to do but for the most part you can get started pretty easily um internationally it's a little bit more of a mixed back um we work with a number of exchanges um and uh outlets around the world so we've got what 23 exchanges I think that now um accept PD or or or work with pyd um we think and we haven't published these numbers but we think there's probably about a half billion folks uh and wallets out there that are PUSD enabled or enable um uh across all of those uh areas and so chances are that there's already a way that people can get that into a local wallet or into a into a local exchange that last mile is tricky and we are working you know one of the things that we've got um at PayPal is a global distribution Network for our remittances business called Zoom um we're looking at ways that we may be able to activate some of those Partners we're looking at ways that we can work with folks like yellow card uh who has 60 some odd countries in Africa that they work with um and that's a pretty efficient way to offboard into local currencies there um but we think that that streamlining both the on and off is going to be really key to mainstreaming this but there isn't really a reason for people to use it unless there's also those use cases around payments around Commerce so there's a little bit of a chicken and egg problem there we're hoping that what we can do with our two-sided Network and the 400 million some odd people that we've got in it can actually start to break that because we actually have both the Chicken and the Egg in our Network and start to encourage both of those those aspects yeah I might um pull the audience a little bit on your previous question uh to try to get some some response so I'm curious of uh the folks that are here for your own stable coin usage um if I can get a show of hands if you acquired and I'll go through a few of them so you don't have to just answer once raise your hand for any of these that apply um if you have acquired a stable coin through a DI protocol okay great um really useful to know pretty solid representation of the audience there how about directly with the issuer also pretty good amount of people which is interesting to see um for those of you that integrated with the issuer directly was it through a UI yeah or an API only one okay so UI seems to be the way there um are there other ones that should be yeah how about through an exchange um let's do non defi like Dex or something way less yeah that's interesting any others that I didn't miss that people would be curious I think those are most of them yeah appreciate that um were you I thought youing yeah onoff ramp in Canada onoff ramp in Canada uh I do not believe that we have an onoff ramp in Canada right now um but uh but yeah I'll I I will take that back to our team um as a as a as an ask for you um so so one thing that I also really realiz more and more particularly in the US is that sometimes the question how do you get your cryp how do you transfer your crypto your blockchain assets into US dollars and uh obviously I'm happy to see that PayPal is maybe you know becoming in one of these offrs but are you concerned as PayPal as a big brand that this might become a rout for people to illicitly you know hide use it as an offramp to get you know all of crypto into into us dollarss where there maybe it's really hard right now to find another way that is not that's control I mean uh you know one of the things that I think that we bring to the on andof RAM space is the history and the experience that we have around uh the Fiat Network and so you know if you have a PayPal account we do already know some things about you and we already are able to vet um you know how Fiat moves in and out of those those areas so we think that we have a pretty good handle on being able to manage terrorist financing or moneya laundering or other illicit activities especially in the interface to the traditional Financial system and the and the Fiat world so you know we actually think that we're better positioned than most people uh in the ability to uh allow legitimate users to be able to take crypto and bring them into the Fiat space um into US dollars and be able to do good things with them because for the most part the people on the PayPal platform are already doing uh uh money movement and and uh interactions with the other parts of the financial system and commerce um and you know so we have that history and so if you now suddenly start doing that with crypto we know that you're a good customer I here and then in the back okay perfect yeah uh to build on like the narrative like if you have a to me the most compelling idea for stable coins right now for someone in crypto is to be able to put it into a lending protocol and borrow a stable coin against it and then use that in an actual an actual use case you get you keep your your exposure to crypto you can potentially avoid a tax event talk to a lawyer but um do you ever see yourself getting to the point where you might actually in addition to allowing people to do that offramp through PayPal but maybe direct natively integrate with defi protocols so not just have defi protocols integrate with you but the other way around which might be an open question but kind of like what coinbase or others do with some limited defi protocol as well um it's an area that we've looked at behind you on the left it it is an area that we've looked at I wouldn't say that we we've looked at it extensively to date um you know there are um there have been a lot of interesting activity in the lending and the staking space especially around regulation and we do um we do take care to make sure that we are doing everything in a way that uh fulfills our obligations to our to our Regulators um it's absolutely like we absolutely understand that people want their money to be working for them um and so that's you know that that that area is definitely something that we've been looking at um but we have to your point um uh been working with partners that that will then allow for py USD in their own products and and services to be uh to generate yeld and to be able to uh be staked and loaned out um whether we do that internally uh on platform not sure go over here yeah uh my question is on um just regulatory incentives with on ramps and off ramps um you know one of the best use cases of stable coin is the ability to um obviously send money easily across borders and then U help people in many Emerging Markets protect their wealth from inflation um the challenge is uh you know people want access to US dollar or US dollar equivalents absolutely um but uh that creates an economic risk to central banks and these countries and so uh wondering if you've seen you know incentive systems where uh you can actually have on- ramps and off-ramps where people can access USD easily or usdc easily or any stable coin sorry um and uh how do you get like you know central banks and countries to actually agree to say okay hey yes come set up your own rone pram and you know operate from here yeah it's a great question I'm sorry your name is palan palan yeah um yeah I mean I think that there's so we're seeing I think a couple of different Avenues to that um you know there are countries where remittances are a significant portion of GDP um places like the Philippines um you know portions of central America and uh uh certainly in Africa and you know we see a great desire in many of those central banks and and governments to be able to facilitate the easier movement of funds into those countries because it's such a vital portion of their economies and such a vital Lifeline for the people uh for their citizenry um there are concerns among others around dollarization of their economies there is a concern around you know uh losing control of monetary policy if if a significant portion of of of funds is kept in in in foreign currencies or foreign to them currencies um and I think that central banks and governments are starting to to work through sort of what those are you see some like Argentina that are like look we're just going to go to the dollar and and and be done with it I'm not sure that that will actually happen but you know there's that's sort of one extreme or um you know the the the uh you know the Bitcoin uh uh as legal tender and some other other places um but you know I think that we found that uh central banks and Regulators in those organiz in those countries are um very interested in making sure that there is an efficient way for funds to be able to move into those countries and then for them to be able to either move into local currencies or into sort of the the regional Banking and Financial systems um we work with a number of Partners uh and and firms out there that are facilitating exactly that so you know we've talked about yellow card but there's um uh uh um coin pH in in the Philippines uh that's not right it's coin uh yeah zcash and and and others that form some of those off-ramps as regulated entities in those organizations um but you know again the the there's a lot of local knowledge uh and local sort of interaction that are are necessary there and that's actually one of the reasons why we think that it's important for these to be Open Standards um you know if we had to build an off-ramp into every sort of country that was necessary like we would be here 20 years from now and we would only be halfway done um but the fact that you can move that to any compatible wallet again which is one of the reasons why we started with the rc20 um allows for those local providers to be able to work with those local uh within those local areas and we've seen a lot of success from people that are that are starting to do that open questions maybe here in the back and you can also move forward like it's okay thank you uh yeah I I was wondering um what you think On Any Given weekday the percent chance that the US government decides that uh stable coins are illegal and uh decides to civil astim forfeiture uh all the funds backing PayPal USD and what what's the percent chance that that happens on any given week dat because they would never do it on a weekend thank [Laughter] you um well I think that the fdac likes to do things like after after uh banking hours on Fridays right so maybe they would do it on a weekend um I I would say that I think that that speaking only for myself and not as a lawyer or any of those things I I I think that that is incredibly small um we are as I said you know and and uh paxus is regulated as by New York DFS it's a it's a it's a New York trust um you know the ways in which the reserve funds are titled and held are in the name of the token holders so they actually belong to people that are holding the tokens um and uh for that reason it is not it would not be a claim against paxos and it would not be a claim against PayPal it would be a claim against citizens and token holders um which number one makes that a much more dicey sort of proposition from a regulatory standpoint to go and seize those funds um secondarily as I said you know we've gone through a lot of work in in in working with policy makers and Regulators across the ecosystem for uh getting to PUSD um and we're very confident in the regulatory structure that exist we are on top of some of the emerging uh draft legislation um none of that seems to suggest that there is going to be a mass extinction event for stable coins um certainly not us issued stable coins anytime soon um so I would I wouldn't put it at zero because you could never be 100% sure but I would I I would put that at a fairly small Point Alon I don't know if you have any yeah I think your points were spot on there um especially around the the claim against the citizens themselves instead of you know either PayPal or paxos because of the way we have our treasury uh set up and the fact that all of the assets are bankruptcy remote what would you put the percentage at uh I would put it higher than zero and uh I think the rwa folks many of them here today are lying about the percent chance that that could happen and also civil asset forfeiture in the United States means uh if you're accus accused of a crime or the the people using your your uh stable coins are accused of a crime that your civil assets you know cash or uh cash equivalents like the things backing PayPal USD can be seized without uh without saying what that crime is or or actually um or actually uh you know saying PayPal committed a crime so I think uh that's a quite a high risk um and also to be clear like there is no legal regulatory framework for stable coins that doesn't exist yet uh in the us the Senate is working on one um but to say like that we're following the the the regulation or uh you know rules around stable coins there aren't any um so uh until there are I think that is still like increases the risk still y so if I were Peg you down to a number greater than zero but lower than L lower than 1% okay but probably at least 0.1 % okay so maybe if there's you know 1,000 days in the next 3 years on any one of those uh it could just you know be seized for that particular day fair enough other questions open let's open up to you yeah in the back I have a quick question like how could you differentiate between the uh Pi USD and uh usdc like how could you do you have any special unique features better than the usdc kind of like a make it different yeah I think that that's similar to the question that that came up earlier I mean from a straight token perspective there's not a ton of differentiation in the structure of the token or the smart contract uh between those those areas I think that the differentiation comes in in terms of things like how the reserves are managed and audited uh and and and transparent uh they come in the use cases that we enable through the PayPal platform and other other partners and platforms that are there um the uh acceptance that you can now use that to pay at you know 30 million PayPal Merchants around the world uh and the fact that our Focus around P pay PayPal USD is really around driving some of these uh utility payment use cases um that really bring some of those additional layers on top whether that's around the disputes management whether that's around the customer service uh and other sorts of things that um you know we've been doing on the Fiat space now for many many years um so you know I think that if you were looking at it strictly as a a set of protocols or a set of of of interactions on the blockchain you know it it's a fairly vanilla token uh and as I said that that is at at this moment Anyway by Design um there are some things that we're looking at in the future that we think will make it more efficient for payments more effective for some of these other use cases uh and I'm just going to have to ask you to stay tuned for some of those oh I already started using the P USD PayPal app yeah how are you using it uh basically uh I just deposit USD and get a pi USD then go to the onchain so that yeah the only thing is like I think it's hiding a lot of like uh onchain things like you don't see the gas fee right it's only show like a yeah I think it's in a good way or bad way sometimes you don't even know how much gas fee you know pay so it's kind of a hid in the complex yeah so yeah yeah yeah another question back there yeah um I don't know if you mentioned it earlier I might have missed the beginning but uh are there any new chains that you're going to support uh in terms of PayPal USD and what can we sort of look forward to on that side of things so uh I can absolutely confirm that we will support additional chains um we haven't uh announced what those are yet in fact we took a little bit of a poll earlier uh around the chains that you'd like to see uh I think we heard salana and arbitrum and uh ZK and ethereum classic um and polygon um if you have others to add to the list please send those along um but um you know one of the things that we absolutely understand is that um we started with ethereum because of the ubiquity and the and the distribution and the ease of integration um we understand that that gas fees are uh uh disappointing um understand that there are uh more efficient uh protocols and there are ones that are more suited to specific Industries and specific verticals so those are definitely things that we're looking at cool thank you uh we'll go over here first and then yep um I'm Emily I'm with paxo so I'm a little bit biased but I recently had to register my car and I paid with P in Colorado which is like kind of cool um but more interested in what like the merchant reaction has been any push back any positive negatives and just like framing it from the merchant perspective how are they um reacting to PD you know I think Merchants are I would say cautiously optimistic um and I'll I'll share a story um which really caught me by surprise but you know there was a lot of activity especially a few years back around Merchants wanting to accept Bitcoin and ethereum um and uh I would be in conversations with a lot of these especially larger merchants and their Technical and Engineering teams would be very excited about this and their CFOs would be very very not excited about this because they were sort of in a place where you know they could accept some number of Bitcoin for a pair of sneakers and by the time that that actually settled into their accounts it was either worth a lot more than they sold the speakers sneakers for or a lot less than they sold the sneakers for um and that's probably still true uh in terms of sort of native settlement um so you know I think folks are excited about at at the merchant level are excited about the idea that they can take advantage of digital the speed and the safety and the transparency of digital payments without the volatility um but the story I was alluding to which was really interesting was that there was one retailer um sort of a large we'll call it a large Electronics retailer um and some of you may know that when you go online and you want to buy you know I don't know a camera or TV or whatever that there are so-called minimum selling prices so this is that the manufacturer of the TV will actually prevent the retailer from advertising a price lower than x um I'm told that many of those contracts are only specified in Fiat currencies um and so this retailer was particularly excited because they saw this as an advantage where they could say well look if I price this thing in in py USD I'm not subject to any of those restrictions in my in my sales contracts I again I'm not a lawyer I'm not in retail I don't know how how how valid this is but it gives you an idea of how retailers are actually starting to think through the implications of what digital currencies do and I thought that was particularly interesting because here is one that was that was actually like really thinking hard about not not just it's cheaper for me to process it's faster for me to settle but also it gives me sort of optionality that I didn't have in the Fiat space so we have a question over here yeah so uh sorry if you talked about this before but um for paxos could you explain what exactly happened with buusd what you guys learn with that and as someone that would be using a paos supported product how do I you know like what you learn from that and the confidence I have that that won't happen to the next asset sure um yeah so I'll first state that I am an engineering manager at Pao so um understand that with with my answer here the thing that I actually took away from the BC experience was a story of success to be honest um in the way that we Unwound billions of dollars of assets with no problems right like 25 billion 25 billion dollars of of assets with no problem um maybe tether could do that now with the price of everything going up but I don't know if they could have done that before right so I think that just um speaks to the the trustworthiness that we have gained in the space in the way that we were able to handle it I won't speak about whether or not it was fair whether or not it should have happened whether or not it maybe is even legal but um I am proud of the way that we uh handled it in the end there any other final questions I'm not sure how we're doing on time as well I can shoot a final question if that's the last one um so on the regulatory uh uh point of view I mean we obviously have the nydfs you have your own Regulators I mean how how does that space work do you do these Regulators have to talk to each other now like or do they trust each other or you know I mean let's say you know there was a question about the remittance payment now let's say you talk to another regulator in somewhere in Korea or whoever you know do they have to now talk to DF the nydfs how does that work lots of lots of regulatory questions these days um well that's that's the setting point I heard right that's what is different to they used yeah no look I think um so first of all Regulators do talk to each other I mean they just do as a matter of course um because they want to understand where the trends are and and and what they should be looking at um there are a few quote unquote Marquee Regulators around the world that sort of set the standards for for and and and sort of serve as the gold standard for other Regulators to look at these are the ones that you've heard of so these are New York DFS for crypto uh the monetary authority of Singapore uh in in the Asia uh pack region um uh depending upon where you are things like the uh Financial conduct Authority in the UK or or or uh various entities in Europe and so um they talk to each other both informally and formally so there are a number of sort of forums that you know things like the bank of international settlements or others that that Regulators sort of routinely work to uh engage with other Regulators around um but you know what we found is that Regulators are also very interested in learning about this space some of them know more than others some of them are um more Savvy and have done more experiments and Pilots than others some of them are much more willing to just say look if it's if it's good with the us or if it's good with Singapore or if it's good with whatever we'll just do whatever they do um and so you know the the complication I think with stable coins is that there is an intersection between the traditional Financial system particularly around things like reserve management and onramps and off-ramps and the digital currency and crypto space and so there are a lot of folks that get involved we've before launching PUSD spoke with literally dozens of uh entities and and regulators and policy makers around the world about sort of what we were doing um and that interaction and that and that uh exchange I think is just going to get tighter as things go on but I also think that as Regulators see more of these use cases that they see that there's value and utility around them that it's not just pump and dump schemes and you know terrorist financing and things like that that they will start to um engage on the Utility side as much as they will on the control side so I think that we're coming up on time um why I'm am taking away that um from this that that the regulatory side is is is at least something that you all are curious about um that additional protocols or something that you'd like to see us uh pursue uh and across a wide variety of of of protocols um that you are interested in the direct Integrations uh with daps and and and defi um rather than through some of these other other agencies and that you know hopefully you will engage with us uh as we go to help uh craft a stable coin that's really going to work for all of you please uh take a look at the faucet at faucet. taos.com please send us any uh um any other suggestions or thoughts that we have we really want to be here with you uh and we really want to be building this with you to make it uh the stable coin of choice for payments in your applications and please do take a beanie because it's cold outside thank you very much have a great rest of your [Applause] show