Crypto Powered Payments - TOKEN2049 London 2022

uh good afternoon ladies and gentlemen um my name is Chris and I'm co-founder of bvnk and today I'm going to be speaking to you about crypto powered payments but first a little bit about who we are as bbnk we're a payments company at heart and we're building crypto powered payments products we have a cross-border payment solution we also have a crypto payment Gateway that allows traditional Merchants to accept crypto payments and then we bring the whole platform together with our bvnk business account so it's always been our core thesis at bvnk that traditional financial services and crypto financial services are converging um the fintechs of the last 10 years have done a wonderful job upgrading or adding a new UI layer on Old Legacy infrastructure particularly in the in the payment space but we really feel that blockchain technology provides an actual core infrastructure upgrade to the old Legacy infrastructure and that's where we really see Innovations at the Forefront within this payment space I always like to use this slide to really show how disruptive Technologies are adopted at an increasing and accelerating space this specifically shows all the big Tech a big large cap tech stocks and how long it took them to accrue value and reach a trillion dollar market cap on average they've taken about 33 years and Bitcoin took 12. so you can see that accelerating value creation um coming through there's another great technology adoption curve that I like to look at this is basically plotted the internet users attract to 1 billion and if we plot that same growth Trend and add it to the adoption of crypto users you can see that by around 2024 we should hit 1 billion users in crypto current estimates put us at about 200 to 20 to 250 million end users so if you're talking about adoption and you know despite the depressed prices at the moment um you know we're still seeing adoption and interest grow across most Industries now you can see a slide showing that 81 of all you know of top 100 public companies are using blockchain in some way shape or form um if you zoom in a little bit on the payment space we've had a few recent announcements where PayPal are adding a send receive feature to their buy hold and sell product but also more recently MasterCard um looking to help very highly regulated traditional financial institutions access crypto trading services for their end customers so you know I'm going to take you through a couple of slides here looking at the end user adoption of crypto or some of the slides that we're looking at because at the end of the day end user adoption will then drive payments adoption so this is quite an interesting slide showing uh the number of active addresses on the ethereum and blockchain network Through Time we can obviously see the 2017 retail Bull Run put together that initial the initial curve and the 2021 Bull Run saw new all-time highs and what you know what this shot is particularly showing is again looking at the Bitcoin and each network but these have now become proven systems for transferring value um they're transferring moving billions of dollars daily and this really shows to me that this early signs of blockchains being able to support a global digital economy I like this shot as well it shows kind of another version of Bitcoin adoption uh this is bitcoin's annual transfer volume as you can see it's already reached about 14 trillion um just year to date in 2022. so it's just showing the size of the crypto economies or significantly larger than they were five years ago so all this talk about adoption what does that really mean for Bitcoin as a payment rail so I mean I think there's five things we really need to look at here uh five things we need to touch on or four things one being you know the speculative nature and volatility of Bitcoin does not really lend itself well to mainstream adoption within payments uh We've also got the digital gold narrative that has come to fall in the last few years and that's really stopping end users from wanting to spend their Bitcoin uh the core kind of piece is a transaction speed so naturally Bitcoins transactions per second is probably not suitable um for a scaled payments Network you can see that uh MasterCard does something around 24 000 transactions per second whereas Bitcoins in the region of seven to ten so we also have people working on the lightning Network and this is specifically looking to solve the transaction per second but it doesn't really solve the kind of volatility aspect of Bitcoin to be used as a payment method so again this is kind of just another chart showing uh bitcoin's transaction per second and you know it's not really going to give us what we need to do um you know what we need for an upgraded payment rail um and although the lightning network is gathering momentum uh we're just not there yet and you know they're more kind of focusing on satoshi's original vision of Bitcoin which was peer-to-peer electronic cash and so despite you know some early successes that I've in you know in El Salvador with the chivo wallet um the lightning network still has some you know some way to go so what does that mean then if Bitcoin is not really fit for purpose as a as a you know and a scaled payment Trail we really find that ethereum is kind of leading the way specifically on transaction counts but you know also on um while it's active wallet addresses on a monthly basis so this shows adoption there as well and I think the Innovations around what's being built on top of ethereum which is really um you know D5 nfts but particularly stable coins is really proliferating uh an explosion of payments Innovation that we're seeing today I love taking a look at this chart these charts as well this is the massive growth in stable coin issuance over the last couple years and you can see that Jacob growing so the charts on the on the right is um total stable coin issuance and as you can see from two years ago it was under 10 billion and we're now sitting with about 150 billion of stable coins in issuance and the charts on the left is Fiat backstable coins which is specifically still about 90 percent of the total stablecoin Market despite a couple of experiments with algo stable coins and you know one kind of unique data point is usdc has already settled 3.8 trillion of transactions to date um which I think is always pretty impressive this is another stablecoin adoption chart that is very apt so when we started our original cross-border payments business in early 2020 stable coins as a percent of total crypto market cap was about three percent so naturally liquidity and adoption and issuance wasn't there yet but as you can see we are we're almost at 17 today uh and it's just showing the increasing importance of stablecoin infrastructure in ethereum blockchain to to the payments use case and you could arguably arguably say that stable coins are really one of crypto skill apps but if we're focusing on stable coins what does really that mean as a stable coins as a payment method uh well we have kind of four things we need to zoom in on here one is that they are stable first and foremost uh naturally it's a low volatility asset because it's picked we then have it's you know it's able to be a singular form of global digital money at the moment we have fragmented forms of digital money your Square app doesn't really talk to your venmo wallet but with a kind of stable coin you have a global standard for you know for a form of digital money and then naturally the transactions are secured and managed by a blockchain so double clicking a little bit deeper into the kind of the payment space so if we take a quick look at what the existing cross-border payments landscape looks like today these Legacy Payment Systems um will struggle and the core three things are are cost you know time and accessibility if so from a cost perspective it's still pretty expensive to move money around the world from a delays or settlement perspective it can still take up to five to seven days to actually get your money on the other side and accessibility not everyone can access cross-border payments and move money easily around the world so what then can an up you know an upgraded crypto payment rail do for cross-border payments it actually attacks it right at those three core problems speed is obviously obviously can move at the speed of the blockchain so a couple of block confirmations and value can be transferred from one side of the world to the other you then have also got a significantly reduced cost at all in for all intents and purposes you really only have the network fee or the gas fee as the as the cost to use the actual payment Trail and then finally accessibility this connects end users payer and receiver directly through a you know a series of digital wallets so looking at you know the core benefits of crypto powered payments you know we've kind of isolated five of these that we kind of showed through this cross-border payments use case you know one of them is speed the second one is cost which I've just you know just touched on but I think a significant one is the settlement times so they no longer have chargebacks like you do with card payments you also no longer have four seven to 14 days settlement Windows these can be instant real-time payments powered by a blockchain also access you know most uh you know most uh Financial Financial Market participants can't access quick and easy um you know and cheap cross-border payments uh crypto crypto ballot payments allows you to do this and then I think a really interesting one for me is the Advent of micro payments so with blockchain powered payments you effectively increase the ability to do micro payments which really unlocks a lot of untapped economic activity so we've spoken a lot about kind of adoption of crypto payments where we stand you know how they work and what the benefits are but really our end users adopting it because naturally you need the end user adoption of of crypto payments to really make this relevant you know there's been a recent study from payments where fifty percent of crypto users are actually looking to pay with crypto and P 59 of people interested in buying crypto would actually also be interested in using that as a payment method so what does that mean you know it means Merchants are taking notes if end users are adopting crypto payments Merchants are starting to adopt crypto payments themselves and looking for crypto powered Payment Solutions um we've seen kind of you know it's it's largely starting to give some of the key Merchants a Competitive Edge and even some of the bigger payments companies are venturing into the crypto payment space so effectively you know what is what will it take for crypto payments to go mainstream and I think there's two cool things that we've drilled in on one being the increased uh stability and consumer trust we're going to specifically around stable coins and regulated stable coins and then the second piece of that is a unified Global regulatory framework regulation at the moment is still fairly fragmented around the world uh different markets are doing different things regulation is moving at different speeds and I think bringing those regulatory Frameworks together in a sort of a unified regulatory framework will do a lot to push the kind of payments industry and payments industry forward specifically you know ones using a new upgraded payment Trail like blockchain and then finally you know I just wanted to kind of leave you with a few kind of trends that we watching specifically in the crypto payment space or almost slight predictions um you know we really believe that Emerging Markets will lead you know the crypto payments adoption we see that saw this specifically with some of the routes in Asia where originally it started with individuals and now we have businesses and payment PSPs and payment gateways using crypto as a as a settlement currency we saw the same adoption going happening in Africa right now and latam is starting starting to get moving it's no longer in latsam just a a retail speculative asset but businesses are using it to actually move move money around the world and and use it to do payments and then the second piece is broadly what I touched on earlier but the significant amount of capital that can be unlocked in the pipes if you understand the existing Swift network with nostro and Vostro pre-funded nostro and Vostro accounts around the world you get a significant amount of capital just effectively stuck in the pipes um and you know buying you know in incorporating crypto powered payments or using a better payment rail powered by blockchain you can unlock a lot of that you know that trapped capital and get things moving um you know at a bigger speed and and just better overall so thank you very much for your time and um please come see us at Stan K15 if you have any questions awesome awesome thank you so much for that great presentation just before you go I'm interested to uh know what is it like to operate within London um how have you found London City to be a place where you can build a business since we're at London look I mean I think we originally you know there was one or two of us in an office in London you know about a year ago now we are to about 45 at an office in farringdon so it's been a crazy you know crazy ride and I think the density of talent in London is unmatched specifically in the fintech space um so it's it's a deep you know talented talent pool that we can you know we can kind of pull from and we do have that framework of already I think you've just pointed it out having that framework of fintech innovation which you've seen for the last 10 years is helpful I'm not too sure if it's applicable from a regulatory standpoint but at least it's helpful to see where we grow from 100 I think it gives us a Playbook that we can kind of model the existing kind of fintech regulatory landscape take some of those and apply them to to crypto whether it's transaction monitoring KYB due diligence and that sort of thing at least there is a framework and we're not operating completely blind well that's brilliant a big round of applause because thank you so much for your time today thank you thank you