EN | The Next Generation of Cross Border Payments Stablecoins in Practice | MERGE São Paulo

And here at the merge stage, we have um the next generation of cross-border payments, stablecoins in practices. Um please welcome our moderator uh Diego Perez, president at AB FinTechs. Well, thank you very much everyone for being here. I'm going to call my my colleagues here. Arthur He is not here.

He's replacing Darren. Uh Federico my friend from Argentina and Massimo the Italian. Thank you for being here. Uh we have just a few minutes to speak so about a very interesting topic, so it's very challenging uh to wrap up everything in 25 26 minutes, but I think we can do it. So, to start, please introduce yourselves.

I'll start with you, Arthur, then we'll go forward with the other colleagues. Hello everyone. My name is Arthur. Uh it's a pleasure to be here and thanks for the invite. Um my name is Arthur Evans, so I'm on the country manager for Brazil at Ripe.

I've been at Ripe since November 2024. Ripe is basically the biggest uh crypto card issuer in the world. Um we are originally from Hong Kong. We also have offices in Singapore, but also but we have been growing quite fast here in LatAm. This is actually our focus market right now.

And this is why we're very happy to be here. I'm actually replacing our CEO, Darren. He had some flight issues in New York, but I'm trying to do my best here. Hopefully I don't I don't uh mess up. Okay, Federico.

Hi. Hello everybody. Thank you very much for for the invitation. Uh I'm Federico, the CEO of Manteca. We provide API infrastructure for neobanks, banks, FinTechs for run on and off with stable coins and as well for QR payments all around LatAm.

Massimo? Hi everyone and yeah, lovely to be here. My name is Massimo. I lead Mastercard's global efforts in digital assets and blockchain and obviously now stable coins and yeah, I guess everybody knows about Mastercard. We're a small small brick and mortar payment company.

But yeah, super excited for this conversation. Looking forward to it. And just to present myself, I'm Diego Perez, president of AB FinTechs, the FinTech Association of Brazil. So let's start start here with Federico. Maybe we can touch a little bit about the potential of stable coins, you know, especially for cross-border payments.

What are real use cases that you actually see today, especially in Latin America? Yeah, so first of all, stable coins are already playing a huge game in in LatAm. I think all of us here we've seen growing every day the the stable coin ecosystem. In our case in Manteca, as I said at the beginning, we're using stable coin a lot. It's probably 90 to 95% of our our volume to provide the run on and off for people especially who is getting their salaries abroad, not in LatAm, and they need to bring the money to national country to national currency in their country to pay for for stuff.

Or directly scanning the QR. So in Brazil, if you want to Pix or in Argentina with a QR or in Bolivia, so you pay directly with your salary or your stable coins directly the goods in in your country. So and this is growing growing and growing and we are seeing the banks starting to play a huge game which will definitely help the ecosystem to keep growing ever more. Okay, perfect. And Arthur Arthur, how do you prefer?

Arthur. Arthur Arthur in Brazil. Yes, yes. So, are you already seeing stablecoins being used in real merchant flows? For example, cross-border payments via QR codes as our friend said, or cards, local payment methods?

100%. So, we have a bunch of use cases. So, for example, we have some clients that for example, have merchants in the US, they they want to receive money from tourists from Brazil in pics. Currency, right? And then the money actually settles in Brazil, of course, in the bank bank account in Brazil, and then you have to do the cross-border payments back to the US.

And they're doing this via stablecoins just because it's, you know, faster and cheaper. And this is just one example, right? At Reep, one of the corridors that we actually are experts at is trying to bridge the Latin American market to the Asia market, right? That's where where we originally from. And then we have like all sorts of merchants and importers, for example, that they're buying goods from China, they need to settle that as fast as possible.

If you look at, for example, what they used to do, which was via Swift, payments would take like, I don't know, two, three days, four days, and sometimes would get lost, which is bizarre, but it actually happens when you Swift. With us, it settles in like in 10 minutes or 20 minutes, you know, it's it's crazy the amount of efficiency that we got. And then also, yeah, Fede mentioned also some of our use cases. You see, for example, countries countries like in Bolivia that you can buy stuff in the streets with USDT, which is mind-blowing, right? But yeah, man, it's I think this is this is a technology that's out there.

There is no way back. We are now seeing the mainstream use, but one topic the Republic we're going to talk about is regulation and I think that's the only missing piece for us to see like the really the adoption across the across the board. Okay, very good. It's impressive when you see the adoption happening instantly and especially near countries like Bolivia. Well, Massimo, from a global network perspective as you work for a big company like that, where do you stable coins already outperform in traditional cross-border rails and where do they still fall short?

Thank you. Maybe it's easier like this. Yes, I just want to quickly bounce back on on on what the colleagues here said on on on the panel because I like the fact that they actually start discussing real use cases as opposed to telling us about the technology that they employ, right? Because this is a common shortfall I think still in the in the industry. The technology's obviously already there, right?

And and there's outstanding innovation, there's outstanding amounts of the new platforms that are coming to solve for for real problems, but the fact of the matter is we often talk about what the technology does and not what it helps solving for and I think it was it was very interesting to you know hear about you know payroll issues or inbound money movement issues into into Brazil or into Latin markets because it makes actually what all of this does a lot more real, a lot more useful to sort of understand. Going back to your question, obviously from a MasterCard perspective I I'm going to have a hard time today on this panel not discussing the obvious elephant in the room, which is our acquisition of BVNK for $2 billion yesterday. Um So obviously I think that's an intent and that shows really the commitment towards institutional adoption of let's call it traditional financial sector and ecosystem within within the space. It doesn't mean that we're not agnostic anymore. So, we obviously we we we keep having a very partnership-centric lens on on the entire ecosystem working with the with the likes of these guys and and a lot of others.

Um but certainly I think cuz you you were mentioning Swift um Arthur um just earlier, right? I think where a lot of the inefficiencies today because you you you want to hear a little bit about, you know, whether stablecoins are actually reaching um relevant scale. I mean, stablecoins today are, you know, transacting trillion-dollar value on a daily basis. That's more than Visa and Mastercard combined. So, the scale's already there, absolutely.

Um the use cases that are we're solving for are also becoming a lot clearer, especially in a in a market like like Latin America or Brazil or in Argentina with hyperinflation or um etc. etc., right? I think um I think Mastercard's always been This is not news. So, Mastercard's always been through waves of um infrastructural innovation, right?

Where some of the efficiencies lay is that the entire financial ecosystem has always been innovating on top of an infrastructure that is actually dates before the internet economy, right? I think Swift that you were mentioning was built around in the 1970s, I think 1977, right? And so, we've been building on top of these legacy infrastructure. No matter how much the effort to innovate are there and the intention is there, I think obviously blockchain represents that shift towards, you know, a modernization of new rails. And Mastercard's multi-rail strategy has always been that of adopting new waves of not just innovation, but new rails of platforms that are allowing for more fluid uh money movement.

And that's that's certainly what we're seeing today. Okay. In your perspective, this uh oh Sorry. In your perspective, this single rail is is still a big inefficiency and the multi-rails are are the solution. Yes, at the end of the day our perspective that we want to offer customer choice, right?

And so, doesn't really matter if it's one rail or the other. At the end of the day this from my perspective I think this entire notion of talking about which chain or talking about which rails or talking about which platform from a consumer perspective shouldn't really matter. Consumers, what do they want to do? They want to send, they want to receive, they want to pay, they want to earn, they want to invest, they want to experience, right? That's that's the language.

That's what they understand. What happens in the background, whether it's you know, crosses three chains, goes via stablecoin, or goes via traditional correspondent banking chain that takes you know, six weeks to get there, you know, sorry if there's any bankers in the room, I'm sure there are. Doesn't matter as long as it matches the expectation of today's consumers, right? And what is that expectation? Obviously, it's instant gratification, it's everything now, it's everything transparent, everything one click.

So, we cannot have that in a hyper digitized and hyper global economy and a hyper global world, and at the same time our our money tools, our money movement rails are not adapted to that, right? So, money is not moving today at the speed at which the internet is moving. And and that's really what blockchain is obviously enabling a lot more, and we need to see a lot more of of that adoption happening. Very good. And Arthur, as enterprises experiment with stablecoins and tokenized money, what do you see as the hardest problem preventing stablecoin from becoming core financial infrastructure?

That's a very good question, and I would say

Very tricky as well.

Yeah, very tricky. Honestly, yeah, honestly on my side I would say it's regulation to be honest, like I mean, when it's not regulated it's great, right? I mean, you move fast, the The adopters just go there and conquer. That's great, but at the end of the day, I think a bunch of people they still rely on something that says yeah, it's it's it's it's strictly it's it's legal. And you can do that.

That's the those are the rules. There are punishments in case that there are some players that doesn't do that. Because at the end of the day there still like the the last mile for the fiat currency, you know, there is Unless if you're talking about the entire common economy of the planet going on chain, that's one thing. Then it's a it's a scenario which is a bit of anarchy, you know, like the governments will have nothing to say about that. But as long as there is there is people wanting to receive in fiat to use to need some entities that's going to do the off-ramp, you know, or on-ramp.

Um, I think there's someone using a library. There's someone speaking here. Okay, or whatever. Um Yeah, so so the one consequence for example in Brazil we got the regulation, right? We got the vast regulation finally.

And as you can see for example in an event like this, we have big banks such as like BTG Pactual. It's unthinkable that you think BTG would be sponsoring this with a booth like 2 years ago, you know? But it's like now that's regulated, now they're there. Now we see like big banks going there. And well, when the big big banks move is because it's it's mainstream now.

It's it's it's it's actually late cycle, you know? Um, but yeah, man, I think now that's regulated and it's a trend that's the entire all countries are regulating or thinking about it. I think we're going to see the a different stage of of maturity in the the ecosystem. Yeah, I cannot agree more with you. I used to say that regulation is good, but we need to keep it in a perfect balance, you know?

Otherwise, if you have too many regulation, maybe it will constrain the struggle of the development and the advancement of the system. So, Federico, in many Latin American countries, the challenge is not only sending money abroad, okay? But entry and exiting the system, and how critical are fiat on and off-ramp in making this ecosystem viable? Yeah, so as Arthur says, uh for now crypto stablecoins are growing a lot, uh but still a way, let's say, to move fiat faster. So, everybody wants to start with fiat fiat and end with fiat.

So, stablecoins are definitely making better the cross-border or the swift thing. So, on and off-ramps are definitely a must in the different countries in order to allow this. Um actually, in some countries where there's no regulation at all, uh which in some cases is definitely good, but in others is very difficult for the off-ramp, and you ended up I mean, I remember a few years ago in Argentina, you ended up doing cash somewhere in the street. So, um I mean, they they are critical for the system. If banks are starting now, they will probably want to play the role as well for on and off.

But, um it is something that we need in order to improve the fiat and the stablecoin ecosystem. And to anyone here in the stage, who is solving the ramp problem today? Banks, fintechs, or new players? Manteca. Manteca?

I was I was going to say the same. I mean, there is no one single entity that is solving for this. I think there's a value chain, right? And and I think we've all learned that it, you know, Arthur was saying, it's not an anarchy, it's not fully decentralized cryptopunks anymore. It's a coalition of the old, the new, um the safe, the unsafe, the quick, the the slow, right?

So, I I think it's a it's the same that we saw with the the acceleration of e-commerce, with with the acceleration of the digitization of the financial industry, Fintech and neo banks, there's a high number of You cannot hear? Oh, sorry. There's a high number of new entrants, nimble players that move quickly that solve for gaps in in the market. They start to consolidate. The big players start moving in later.

The regulators that we we we discussed already are coming in to put a bit of framework into place. And players like the banks or MasterCard or or large merchants obviously are bringing the scale. So, I think everybody has obviously a big role to to contribute to that and it doesn't happen at a single point. It happens when it's scaled within an entire ecosystem. Yeah, I mean, I think there's room for everybody, honestly.

Actually, I'm not sure if we compete with banks, Fintechs. Sometimes we cooperate. So, um There's there's room definitely for everybody, especially if everything keep turning on from Swift to stablecoin. Man, it's a exactly. I couldn't agree more.

It's a huge huge huge market, man. It's a It's a It depends on like the segment of industry you're tar- targeting, depends on geography. So, what you see in the cross-border payments, players that touch stablecoins, what usually happens is that they are specialized in different corridor, you know, probably Moneta is very strong here in LatAm. Ripple is very strong in Asia, you know, then we complement sometimes use the rails as impossible for a single player to have all the rails in the world like proprietary. This doesn't exist, right?

So, we it's a very collaborative environment, which is good. At the end of the day, we come out of this like stronger, right? Because we want to provide the best experience possible to the end client. The client at the end of the day, he just wants to move money as fast as possible and cheap as possible, you know? Absolutely.

Yeah, so and securely. And securely, yeah, compliant way, yeah, 100%. Uh hence the the all the regulations uh conversation, the need for that, honestly. But um I think it's again, man, it's a trend that's not going to go back. I think it's it's it's there.

It's a real use case. It's a real pain point. Um regulators are always like behind. Now they're ca- cat- catching up, you know, but but um yeah, it's it's a very interesting moment. We see like volumes from all players, all industry just growing month by month.

Uh we see big players such as Mastercard, for example, getting serious into this space and getting like more presence there. So, yeah, man, very excited to see that in like the next chapters. Okay. And with you again, uh how important is to integrate stablecoin with local payment systems like Pix? You mentioned Pix, but also we have the UPI in India.

And I I heard that very recently the Ireland launched the Zipay, which is the fast payment system as well. Uh do do you think it this integration is important or prior to that uh uh interoperability between the the arrangements is more important? Look, it's uh it's definitely important. At the end of the day, it comes out to you user experience. So, one example, uh if a client at Rip in Brazil wants to pay someone in Hong Kong, he's going to send a Pix to a like a Rip account in Brazil.

We're going to do the stablecoin sandwich, you know, via app, and then we offer it back in Hong Kong, we then pay it uh in fiat in Hong Kong with the local Pix in Hong Kong. And the entire process takes like 5 minutes, 10 minutes, you know? So, it's uh it's mind-blowing, you know? And it's again, it's because there is the need of the reside of the recipient or the sender to have fiat involved, we always need to integrate with the local payment networks, you know? Um but again, if we see them the the market going towards a space in which both sender and recipient wants to receive in stable coins, then it's a complete new different market, man.

Uh it's very it's actually very hard to to imagine this and think about it because then uh you know, um there is no actually no no connection with web two uh financial markets uh traditional financial markets at all. Yeah. Okay, perfect. So, uh we are 5 minutes away from the end of the session. So, let's make let's start to make a quick one a quick round uh with you all all of you guys.

Uh so, uh what is happening in Latin America that makes the stablecoin adoption stronger than in other regions? What are your thoughts about that? Well, um

Anyone. I As being an Argentinian, I can definitely say that uh we are very used to uh go from our national currency into US dollar. It was not allowed from 2019 till 2025. So, the way for us to save money and invest money was uh buying stablecoins. So, it was a a must for us.

And to do cross-border payments as well, to pay stuff like Netflix, let's say. Um so, definitely I think as as the national currencies in LatAm are very weak, it is a way for the Latin Americans to to do this. At the same times, I think banks are a bit complex when trying to do a cross-border payment not a credit card payment but a cross-border payment. So, a lot of importers exporters, as Arthur say, in 20 minutes receiving the money it's it's it's magic for them. So, that was as well the uh the the reason why uh stablecoins exploded here.

I believe it's the same in Africa. And Masumo, you are almost Brazilian. Half Brazilian, I would say. Absolutely. My my brothers-in-law are are either in In fact, I will I will Your your thoughts on that.

Well, you know, I I completely agree with this, right? I mean, hyperinflation in Argentina it's it's no longer a nice-to-have I use stablecoin I trade crypto. it's a it's a necessity for survival and so that you know with with these kinds of use cases when you're solving for real problems, right? I have my payroll that gets diluted immediately when I receive it. No bueno.

Okay, I need to send money urgently across borders to my abuelita because she's sick. Cannot take 5 days, right? I need to collateralize my Bitcoin to to get a mortgage to buy a house and I do this with Ave, right? Like a real things. I want to buy pizza with my my girlfriend on first dates, you know?

So, solving for these kinds of real use cases actually actually makes it scalable I want to say and and obviously Latin America is is a market that's very prime for um international e-commerce. In fact, I was I was I was I was kidding but my my two brothers-in-law that are uh Brazilian uh from São Paulo, they uh they run their own international um e-commerce and when they talk about it to me, I'm always very interested to hear, you know, what what kind of hurdles, what kind of problem they encounter and a lot of the time these problems are related to cash flow management, to treasury, to FX, etc. right? So, they're actually looking to build their own payment gateway with crypto on and off-ramp to solve for these types of inefficiencies, right? So, it's also the the the maturity of the of the market in Latin market is very prime for this type of of innovation.

And and Arthur, your vision as well. But, considering your answer that you are very well connected to Asia as well. So, are you doing better? Are you side side or they are doing better than us? Uh Asia is a very big place, man.

Depends. Um some countries uh there's it's all right forbidden, you know? Though, so it's zero progress there. Some others it's uh yeah, they're far ahead in terms of regulation, in terms of adoption, you know, Hong Kong was actually Hong Kong was a bit like felt a bit of envy when when New York started to be called the the stable coin capital of the world because they were doing that for so long and then out of nowhere New York just became the the the the city that was the capital city. As it's it's a bit crazy because but again I think in LatAm the thing is I couldn't agree more with Federico.

Uh It's a combination of capital control and and the currency that like the the strength of the currency or the lack of strength, right? Of of the currencies in LatAm. So for example in Brazil we we had episodes of moments in which the politicians just seized all your savings for example. This creates a lot of institutional uncertainty. Um some countries in LatAm have this more others have less.

But um it's it's a mixture of For example if you want to diversify if you want to take the risk off your currency that you live at I think one of the easiest way right now to do this is actually by by stable coins. And stable coins are like crypto, right? Uh so against capital control is and then the capital controls also affect the way money flows. So it's not only about uh like reserve value reserve but it's actually money movements or payments. Uh it creates a very um it's a hard to experience to move money out of Brazil and into Brazil if you're a foreigner for example.

Uh if you want to just open a a local entity in Brazil and then send money to this entity it's actually like it's not an easy process, man. You have to open like an effects account and then you have a bank that's going to convert this USD back to BRL and then you're not so sure like okay but can I hold USD in Brazil? No, you're not not really just if it's an effects account you know it's it's a bit strange just it's a lot of different dynamics that if you're just using stable coins it's much easier, you know. Um so again I think LatAm, Africa definitely are the places that we see this more often like the PMF, right? For my first for cost payments and um Yeah, I'm very very happy to to be here and see all this happening.

Yeah, likewise. So, I'm running out of questions here, but our time is going up as well. Uh a single uh phrase uh punchline uh what what the message are you uh can you deliver to the audience here? Each of of you. Keep using stable coins and uh I don't know.

Call us if you have a fintech or even a bank. Um open bar if you pay with your MasterCard tonight. Just kidding. I think uh on a serious note um this technology and this infrastructure uh really starts scaling when it actually becomes invisible in the background, right? Where it's no longer about the chain, the token, the stable, but it's actually about sending, paying, uh receiving, um and actually the technology is just the rails in the background and nobody knows about it.

I think it's just starting. Uh I think a lot of people think it's a hype. It's not a hype. It's here to stay. I really think we're just just starting, man.

I think it's just uh the beginnings of the internet, you know? Um yeah, I think the next chapters I think in 5 years we're going to be doing things that's unimaginable that today, you know? So, keep optimist. Well, thank you. A round of applause for our colleagues here.

Hope to see you soon. Another interesting chat. Thank you. Thank you.