Stablecoin Distribution Channels and Their Impact on Adoption & Liquidity - Panel

Good afternoon or still morning depending on what time zone you flew in from. Um pretty excited to to chat about this today. And then Mariano is going to be joining us a little late, but he's on the way where a lot of our discussions in this industry tend to focus on, you know, the the the benefits of stable coins, the why, the the more technical aspects, but uh distribution tends to be a a much tougher part of our our space. Uh where you could maybe argue and we'll we'll debate it that some of the incumbent businesses uh still hold hold reign there. But I think just to set the backdrop, 11 trillion in in terms of onchain stable coin settlement over the last 12 months, 316 million digital wallets have interacted with a a stable coin.

Uh you're looking at 52 million just in October versus 31 million uh last October. So tremendous uh growth in adoption. Um, now we'll kind of see where things tend to go post regulation, but the fact that we have Genius, Mika, and other regimes has really brought our our space into the kind of front line of of fintech and and tradi. Um, but I I have a couple questions. I'm going to try and make it as as spicy as possible.

So hopefully you guys debate each other. Uh, before doing so, it would just be helpful for a quick intro. On my side, I I cover a lot of our payments and uh stable coin investments at the firm. Um we're a $2.5 billion multistrat solely focused on the space and excited to be here today.

Hi everyone. Working one, two. Yes. All right. Uh Matthew, I'm the co-founder and CEO of Octav.

Um Octav, we're a portfolio intelligence for digital asset manager. We work with mostly hedge fund and family office to help them with uh reporting, reconciling or anything related to uh tracking their assets. Hi. Um, well, there we go. Hi, I'm Katina.

I work for Stables, uh, Stables.money because there's about a trillion stables companies now out there. Um, and we first started off as a retail focused company, um, debit cards for people to spend the stable coins, but now we've launched our institutional arm. Um, and we we do stable coin settlements, OTC, um, third party collection and payouts, um, named Ivans. We're basically um a sweet spot between an EMI and a crypto exchange.

Um and we're in about 150 countries. So yeah, that's us.

Hey everyone, my name is Benjamin Testing. Uh and I'm the founder of CAP. Uh we're a private credit engine that's fully insured cryptographically.

Great to meet you. Um, so if you zoom out, for most of the stable coin history in our space, we tended to characterize our sector as a duopoly, right, between USDC and USDT. Um, and I think you're seeing over the last 12 months several challenges to that duopoly, whether presented through something like JPM stable coin or the issuer as a service model. The the kind of key question I always find myself thinking about is do we think that the existing network effects created by USDT and USDC will be strong enough to effectively kingmake them to provide this kind of first mover advantage or um do we see the kind of incumbent distribution networks you know those of banks and fintexs the stripes the Robin Hoods of the world strong enough to be able to push their own stable coin act.

Ben, you want to start on this?

Yeah. Well, at CAP, we've always had the idea that there will be thousands of stable coins. Um, every jurisdiction will have their own uh regulations, which means um local companies will have a competitive advantage on making their own stable coins. Um the trunch of Tillback stable coins like that part of the market is very commoditized, right? The there's no tech mode and so the only mode you have is distribution.

Um, I think the only cryptonnative companies that are able to survive the takeover or the adoption by TRFI will be those that can have some sort of uh mo beyond um just making, you know, a stable dollar onchain. You're going to need to do something on top of that. And so that's why we're we're not going to make our own stable coin. We are stable coin protocol. Uh we're going to build on top of everybody else's stable coins like JP Morgans or City Banks.

Yeah. And and personally I'm I'm uh probably more a D5 maxi let's say that and for me USDC and USDT they're using D5 but they have a centralized component so it's kind of risky for purists. Um so there's a lot of other like like cap they're using this but also there's bold or there's alusd there's other like small stable coin that are a bit more defi the challenge is like the security KYC and ML around that and also liquidity. Talking about liquidity today, biggest challenge for these small uh stable coin and why they did not thrive that much as like USDC or USDT is the liquidity. Uh we work with hedge fund that have like 25 million to like a billion dollar.

If they want to move 5 million, there's only USDT and USDC that can work. So how can we bring more liquidity to different stable coin and like Ben said, we're gonna have a ton of stable coin. How do we manage this? Martin talk before was awesome for this. How can we bring technology to bring more stable coin?

That's the challenge. Yes. Is GP Morgan going to use USC other one depending of the liquidity they can have. I think that's really the the crucial part of stable coin is how can we bring better liquidity?

And I I really want to like double up on that on the liquidity component because a lot of people try to own the whole stack like I'll be the issuer. I'll build yield on top of it. I'll have a lending market. I have a perex. I'll have a chain and and that creates silos of liquidity.

And so now I'm trying to onboard people away from USDC or away from you know JPM or a money market fund and you're not doing yourself any favors because now you have to recreate all the on and off ramping. You have to recreate all the bridging infrastructure. It's a much smarter idea to focus on your part of the vertical rather than try to do everything yourself. And that's why I think um Ethereum is the best chain for stable coins because they are not trying to do the whole stack. Um, I'm not particularly bullish when people just try to, you know, make a monopoly out of everything.

So, you're you're bearish tempo.

Uh, I'm not bearish tempo because uh, Stripe is a huge company and I'm sure they'll figure out a great use case for it. But personally, the reason I'm interested in crypto is this potential for a global financial system that's interconnected where market forces lead to better outcomes for users. I don't like wild gardens in general.

And and just one one quick followup. Um you kind of mentioned technology as the key part. If I have you know hundreds of millions of users already or or trillions in assets is technology really like the thing that that I need or I mean I already have the distribution. So why if I am JPM should I use Circle's product or Pacos's product or you know someone else if I feel comfortable creating my own stable? I mean, I'd like to take this one, I think, because I mean, looking at what the market cap is now, um, and what the technology can do already, I think always leveraging off the existing distribution channels out there is much more costefficient for them.

And I think [laughter] it sort of gets them out, it gets them to tap into a more of a bigger market as well. So, in my opinion, um, I think that they should, you know, there's kind of like this two two stack approach. I would call it like the internet money approach which is like where your stable coins are sitting right now. Um looking at um the flows that are coming through uh their remittances um global money movement and letting um or you know JPMs out there sort of just leveraging off that and then them having the second stack having regulated sort of banking products or you know banking tokens that they that they can they can issue. So that I mean that's my opinion.

And I think that's how I I would in an ideal world would work really well.

I can jump on this and again always the kind of the more DeFi side of this. But um personally like there's also a legal compliance part of this. Uh GP Morgan is a bank. They're going to need KYC AML everything. That's why you have a blacklist on USDC and USDT.

So there's going to they're going to have to do something specific or work with specific stable coin that can give them KYC and ML. So that's kind of the challenge for them to go use the DeFi structure that exists at the moment. I think what I'm afraid of is that we could at one point have two kind of DeFi world. The KYC ML DeFi and the crypto defi that kind of see. So I think it's going to be different.

It's going to be really based on a lot of regulation. Junior hack is a one like one of the first clarity in in the regulation, but there's a lot of work to be done. And I always say the same thing. It's been about 14 years and in crypto and like I always say the same thing like we cannot try to get traditional market regulation into DeFi because it's a new machine a new system. We need to build new regulation that fit with the system while we still comply with the old system.

So that's the hard part. Interesting. Um, you know, maybe related to this, if we look at the stable coin ecosystem through the lens of a value chain, right? You have the blockchains, the issuers, the orchestrators, the apps at the account level. Obviously, it's a bit of a selfish question as an investor, but where do you think like value acrrus in that?

And I I think it's shifted my opinion over the last 10 years, but yeah, I would love to open that up. I think traditionally it was a dishure side because um all you needed to do was have an onchain dollar that was stable and that was amazing and so then you can get mode in that but now we have you know everybody and their grandmothers making a tibo as a tibo stable coin as a service uh project which are all you know great and they have their kind of u competitive modes but uh that's a race to zero right uh and so you're increasingly having to share yield um maybe not with the users but the people that are creating the distribution So an example of that is table stable coins that give all the yield to u howdy sir uh that give all the yield to chain foundations etc. Um I think it's just moved up the stack now yield bearing stable because they're making a ton of money like Luke Ethena or Sky uh they're making a lot um because they're able to give a user something that they don't have in Trifi. You know it's not it's no longer enough to give you stability or TBO yield that you need to do something more interesting and I think the people are able to do that are going to make the most.

Yeah, I think it's um I think it's the orchestrators like at that level. Um I think I agree with you like it was the issuers for for a long time. I mean and it still is they're still extremely profitable right now but that value is becoming I mean what they're doing is becoming more of a utility than anything else and the orchestration layer especially um you can you know you're pushing flows through the centralized exchanges decentralized exchanges OTC desks etc. But then you've also got your KYC layer um and you know operational layer that you know where you can sort of provide value um and then obviously at the tech layer you've got APIs um dashboard syncing UX and there's a lot a lot of um you know you're putting all of that together and you've got this beautiful polished product for someone to use um with them not seeing all all the stuff going on in the background but I think um you know over time that's that's really where the value is going to grow.

Yeah. Here's to here on this. [laughter]

Oh yeah.

Hi. Sorry. Sorry the delay. Traffic is crazy here. Sorry.

We're just talking about uh where we see value acrewing in the in the stable coin stack. I don't want to put you in the hot seat already, but if you want to maybe throw out your view.

No, no. Yeah, it's a super interesting question and this is something that we also h kind of we think about every day at Sky, right? Um and for us it's like uh super clear that you have two two types of kind of wars in the environment right you have the distribution war and the yield war right the the distribution war is super expensive to fight super ultra expensive I mean you can see that on uh circle's balance sheet the amount of money that is paying to coinbase in order to be the the main place for for the distribution right Um, on the other hand, you have Tether as the king of distribution, right? Being uh used as the number one asset for Burps, arguably the the product with most product market feed in in the whole scene. And and the idea for the rest of the stable coins is that at some point you have to think of stable coins as some sort of liquid fund that needs to provide yield in order to attract users, right?

[snorts] And this is also a pretty difficult game to play because you have as a company, as a Dow, as an entity, right? You have to create a yield to pass to your users to get adoption, but at the same time you have to keep a spread, right? And that is a race to zero basically. And that is why then you have other stable coins like issuing uh their own tokens in order to quoteunquote bribe right um users to you know start providing uh start providing hard money for the stable coin to work on this yield. So yes, it's it's super intrunicate the the inner inner workings, but we tend to see the the environment in that manner, right?

It's like the distribution and the yield and most of the stable coins that provide yield needs to behave as a as a liquid fund.

But I think that's still pretty nent because even though we know that that's like the next thing like moving away from just saying to stable coins that generate more yield, most yield bearing stable coins give a yield that's around 4% anyways. And I have to ask myself like you're putting money in these liquid funds where teams have full decision- making power or Dows have full decision-making power of your money and you're getting the table rate.

Uh I mean that's insane. It's effectively a unsecured loan to the team and if you look at unsecured lending rates for private credit you know first lean the most secured unsecured rates in Trafy that Apollo does you're getting 9%. But a DeFi hedge fund is giving you four. Um I think there's some problem there.

I agree with you on this. It's like and we've seen it on October 10, right? Like there was a lot of risk creator that were not really looking at everything in the risk. that say that and so I think like if we talk and we talk with a lot of like traditional people that want to come into DeFi and they quickly tell us like well my risk is not worth like the risk is not worth it there right TV bills at 4% you arrive on like any platform lending you get 4% why would I take that that risk the the traditional market is way more mature than us right so you need to boost that yield like Marino said there's a lot of like token incentive to do that but that's not the long-term game we need to build real sustainable yield for the long term otherwise as soon as you don't have any more token and we've seen it since forever people move to the next project. So like you have to build something for real.

We need to stop trying to chase the highest yield. We need to start building real product that bring more yield than the T bills. Otherwise, what are we really building? So no, I think I think that's a those are all fair perspectives. The one that I I want to bring out more which wasn't covered as much is the application side.

So you you teased this a bit with kind of circle and distribution and and you know tether if I have a phenomenal centralized exchange in a certain region um and these are actually very profitable businesses why can't I just keep pressing everyone in the value chain to give me more and more of their economics like would love someone to to play the steel man to that why would you know tether be able to maintain more of its economics over time for example I think there's a good argument I have one but curious curious to hear how those not on the application side would push back to the kind of inversion of the fat protocol thesis which for all those who are early in the space was a big thing you know back in I don't know 2016 and there's it's being challenged a lot lately because I think some of the best businesses in our space are userf facing versus protocols but how would you kind of argue against that

well cap is set up as a smart contract protocol u the team doesn't make decisions over the functioning of the protocol We have rules just like Ethereum has rules and um an open market participant participants can come in and uh interact with those rules. Um obviously you can have a fat protocol. Look at Walmart. They do very well uh pushing down the their verticals and forcing people to give them you know tighter spreads. So that can work.

But also look at Ethereum right? If you build a platform where other people can have an economic incentive to give a better return or a better outcome for users, then um that becomes your distribution, right? If there are a lot of different companies that can be built on top of you, they will um distribute your product for you. And so there's like both can definitely work. And to me it's a question also like it's it's are we staying in the true value of crypto of DeFi and everything or like we want to go more fintech and I don't think there's a like the right answer to this.

I think we need to adjust and move toward to like have more mainstream but there's still a lot of development to make sure that happen and and a lot of like new product will bring some value on the app level like a yesterday launched their AY app and they cover up to 1 million. Like how the hell do they do that right? So I think they will catch up a little bit of revenue from at the app size but then the distribution will always also generate more a lot of revenue and I think everyone in the stack will be able to find the right thing if you provide your services. At the end of the day if you provide a services wherever you are in the stack you should be rewarded for this rewarded the right actor in crypto has been really challenging since forever. But I think that the the more the market mature the better we're going to have real actor at every level of the stack that can get rewarded for PMF.

Um, no. I think I think those are those are interesting arguments. Um, I also think you see certain stable coin businesses get distribution and brand value of of their own, right? Like USDT is really popular down here for example. Um the next question I have which is again a little bit of a a one that originates from my neck of the woods in in in venture we have um this saying that you know first time founders focus a lot on on product and tech and second time they really focus on distribution.

Maybe for for either those in in the audience or watching later that are founders you know how would you recommend approaching this distribution war in your your words or this distribution problem? It could be a quite a difficult challenge for for first-time founders.

Well, I mean, I'm not a first-time founder, so I I obviously like

you focus on distribution. Yeah.

Um, well, the the market has changed. It used to be that if you wanted to get deposits as a stable coins, so we generate yield on stable coins. Um, you would have to, you know, tweet, do, you know, frog nation and do crazy things and get people to deposit into your protocol. Now we have institutions and institutions are like for the most part logical actors and so if you can um you know give them a good argument for why they should be using your protocol and why they would you know uh make money from using those protocols then you have network effects of institutions using you and uh maybe you're talking to 100 people to get the same size as protocols that would need to have gotten I don't know 20,000 people depositing for the same amounts. Um like right now at CAP most of our TVL is not incentivized is us going to a family office and pitching cap us going to a liquid fund and pitching cap and them using it on the merits of the protocol as opposed to incentives.

And so I think um because when you think about distribution is often in the uh sense of uh retail of trying to get in exchanges you think okay to be a good stable coin you have to be collateral for purposing exchanges you have to be on a you have to be on spark and that's how you get big but now with institutions there's just so many different ways to do that and it doesn't necessarily have to look like a retail product

personally also not a first founder and the client that we work with Edge fun and family office they they are way more sophisticated or and they are able to look at the product and they want to have like kind of insurance of of the risk of the protocol and everything which is more first founder mindset of product perfect product. So it's kind of strange because we went from like pure nerds product focus where it was like Twitter only and just word of mouth to super distribution like okay let's give token let's be everywhere and everything and now the the market is more mature therefore in general are going back to yeah okay you have the the distribution but what about the product is it really safe how does it work like the lendy effect work but there's also like okay how it and who are you what did you build before and all this and this is getting really important for them because they will forfe [clears throat] feed a 12% yield for 8% if it's way more safe and you could put more size because they're sophisticated and understand the risk. Um at octave like we've been around for about four years and when we started data was not that important. Now especially since October 10 every asset manager come to us like I need to understand the underlying what's under everything all the the composibility of defi is awesome but you need to understand everything under it and in general really understand the power of the data and understand the risk of that. So we see a lot more people wanting to see the product but distribution is important.

So it's

also depends when you ask if you were to say that at the beginning of the year people say you're wrong. Let's just yield yield yield. Maybe after like what happened with all stream finance stuff like uh there's like a I don't know maybe crypto just has its waves of people caring and not caring about where the yield comes from.

Any comment from the distribution war side? [sighs and gasps] Oh uh yeah I have a quite a few but being as a product person I focus mostly first on the utility right I mean what is the utility of your stable coin in that sense right h and if you start thinking uh you know kind of composing the whole thing into first principal thinking is okay what is the utility of a stable coin it's possibly the the closest to $1 with a significant size right again that quote war it's based on liquidity right so that liquidity in which market are you providing that liquidity right I mean for example one of the strangest cases for me for example is the um PayPal stable coin I mean they have such a large user base but see seems like 80% of the user base of PayPal they don't care about the stable coin they care about the balance that they have in their application right and that is crazy because PayPal has a long time application on on space right on the on the on the fintex space. Um so thinking about that it's okay if I'm issuing a stable coin what what is the utility? Uh it's not burps for sure. What is it's it's remittances.

Okay. But if it's remittances, do you have like small shop and offices in every border of every country that is where the remittances most are most transacted right not so it's difficult then right I mean there's you you have to think about the utility of your stable coin that for me that is the the first thing the second is again is how much liquidity do you have if you want to provide a solution to to a business that is kind of outside of the ecosystem. For example, in Sky, we have something called Stars like Subdows in which they specialize in different businesses, right? And we have um a team that they do, [clears throat] let's put it like five things, right? And they associated with security ties and Black Rockck to finance CLOS's right collateral loans obligations.

And there are so mean business to business this is a super popular product in which you can make a lot of money if you have capital right but for security and black they don't care if it's USDS USDC ter whatever they want dollars right so in that sense we are not saying hey yeah we are giving you USDS through finance closs no we are giving you dollars it happens then when we finish the business the money that we are making we are paying that to the sky semics rate. So people that are saving in USDS Canada indirectly they are being also um participating on this financing CLOS's right. So it's it's it's interesting how you need to first think about utility then liquidity right and then comes the distribution out of that.

I agree I agree with that. I guess um from a BD perspective that's exactly it like what problem am I trying to solve and then from there I think that getting really sort of niche you can't be too big sky like right like at this point in the market right um and then you know think about the liquidity exactly that that's um and then distribution comes I think the other thing is um leveraging I mean there's so much out there already so leveraging what is out there um and you know going back to what you said, you know, um I think going back to also just um h how do we get it um whether that's like marketing or, you know, Twitter and you know, getting the name out there. I think um I mean each each use case is is is different. But yeah, I think thinking first what is the utility? Um what's the purpose?

Get get like really really drill down to the niche. Um and then everything else will flow after that. very very interesting. I uh you you brought up liquidity. Uh all of you did in a different way.

Um and in 2024 I spent most of my year with with local businesses traveling with crossber companies both traditional and and uh stable coin powered and you kind of come to this fascinating realization that we all you know love speaking about stable coins in the onchain context but when you start employing it for B2B crossber liquidity is a currently a big issue right like you in many markets a five you kind of mentioned this a bit a 5 to 10 million uh transfer will eat up the whole book and then you have to start to go to third parties which then you you move back to the old world because they will charge you opaque fees. There's counterparty risk. Sometimes they'll just take your money. Why does this liquidity problem exist today if you [snorts] know we're all here truly believe in stable coins? What's the missing link?

I mean crypto is a drop of water in the ocean, right? Like sometime it's good to get out a little bit of the crypto sphere and us and all people and realize that like we're really small 150 billion for a human is a lot but 150 billion in defi for traditional market is nothing right so I think I think the reason why there's not that many liquidity is fragmentation of liquidity like we had a lot of experiment and everyone is like trying to do a lot of stuff like USDC and USD but USDS now bring like fragment the USDC liquidity which is good because it's a different technology right I'm not saying it's bad but I think there's a lot of work to be done on the technology technology and Martin before was speaking how can we get a better AMM and stuff like that. There's a lot of technology that need to be built before we can really expand the liquidity. I think we're trying to go really fast because it's useful and we see that it's frictionless and it removes some border but there's still a lot of technology that need to be tested and and and developed so that we can have deeper liquidity. That's my personal thought on this.

I think um that uh you know like you said zoom out crypto is just a drop in the ocean. There is huge friction between the regulators and the banks, right? And this is I mean I'm I'm Australian and in Australia you can't do anything that's related to digital assets like you will be blocked. I mean stables benefits from that because we act as bank we you know we provide banking rails but you know for for the everyday user when there's a lack of regulation when banks are scared you know um that is going to prevent flows. going to prevent transactions and that means it's stopping the growth of you know you know the growth of um you know liquidity out there.

So I think I think that's something to really consider as well and maybe with Mika with Genesis with everything that's h genius sorry with everything that's happening yes it will selforrect but I think we still have a little ways to go as well unfortunately

and because you talk about bank and at least for me the goal was to replace bank not to go in bed with the bank so that's a long topic I think we don't have the time to talk about this but like you know

I mean that's our goal too we love our goal like our motto like unbank yourself, but that's going to it's still going to take time. They're way too entrenched. They're such a big institution and that's probably a challenge and and maybe another topic for a panel at the next table summit. So yeah,

I would say that like it depends on what kind of liquidity you're talking about because um inter entity liquidity is actually quite well quite good in crypto um because you have all these redeemable reserves like Sky or like CAP where you can mint and redeem with different assets. Um and so you know long gone are the days of trying to maintain you know pegs of uh synthetic assets. You know we all had fun with those uh many years back. Um but now really the question is at some point people need to leave right if you're connecting to the on uh the productive economy at some point people need to pay taxes. you know, they need to pay their people that then I don't know, they pay their electricity bill or they go grocery shopping and at that point now they need to leave and that's really the friction because if they didn't have to leave then the liquidity problem is already solved.

It's super easy to send and receive ERC20 tokens on a blockchain that's not particularly complicated. Uh the complicated part is not being connected to the productive economy. There's a there's a good um analogy I once got from a founder which is it's very similar to the early days of Skype. So Skype is VIP but when it started it just enabled one leg like you you're on VIP and you can call a landline of someone else. So, like you don't actually get the VIP benefits, but they would subsidize it.

But over time, the other person is like, "Oh, Skype's so cool. Let me get an account." And then you have a closed loop system where now you really get the benefits. We we speak about 24/7 access, low cost, speed, and and and programmability obviously and and voice over internet. Now, we're talking about money over internet.

But I I think that the movement from open to closed loop in the sense of closed loop onchain is is what gets us there. We just need I think a lot of regulatory progress. Um, one other quick question that I just want to throw in is we always talk about US denominated stable coins, right? And there's an interesting discussion of do we need non US denominated uh especially when there's RTP in some of these countries. Would that maybe solve the liquidity issue?

Curious first if anyone is in favor of non USD stable coins being really big. you please start and then if not I want to yeah we can go through everyone. Well, I I have an interesting take because like usually people say, "Okay, euros or whatever like because um there are other people that you know pay their electricity bills in different assets, right?" And they want to save in those. Uh for us at cap, what's really interesting is, you know, we're marrying these two types of assets.

Those that uh are dollar denominated, you know, high opportunity cost, high market premiums with those that have low opportunity cost, which initially is like Bitcoin or ETH. But then there's this whole world of um fiat currencies with no opportunity cost or very low opportunity costs like Japanese yen, Singapore dollar, Hong Kong dollar that are equally, you know, valuable, but again very low risk free rates and so we're doing a lot of work with those and we need them to be on chain so that they can interact with our system. Um so JPYC just launched maybe two weeks ago. um still very small but um I'm a huge proponent of that because I think that's the future of CAP being able to marry all these different kinds of assets. Yeah, this is a

okay

just starts.

Hello, this is a super interesting topic for me uh because I founded a company in 2021 which I sold in like seven months ago. We were doing emerging market stable coins for Argentina, Braasil, Colombia, Peru and Mexico. And and yeah, I mean we we love them. We love them because we saw the problem that they were solving. Initially we have created those because when you have exchanges with branches in many different countries with different exchange rates the settlement that they have to do between their different branches.

If you do that with uh dollar stable coins or dollar per se you have different exchange rates in different countries and according to the time that they are also receiving the money. If you are doing wire transfer or even if you are um selling the stable coins you have an effects risk there right? So for them it's much easier to have all that settlement in their local currency doing stable coins than doing it that in the traditional way. That is the first case. The second case that we have been seeing is also related to retail and how they are using cryptocards, right?

The cryptocards for example here in Argentina we have a gasillion cryptocards since forever right. H and [clears throat] the bad thing about it is that you have to top up with stable coins in dollar. So it means that you receive your salary, you have to purchase the stable coins, you pay for something with your car and you have to pay again to convert from dollar stable coins to local exchange. So there's a bunch of um fees that you are paying. That is why for example there are super big um exchanges here in Argentina just writing that thing you know.

Uh so initially for the retail and for the people it's much easier to top up your crypto card with the local stable coins, right? Because it's one to one. That's amazing. That's the second thing. And um and the third one and it was the the most popular for us in terms of the TVL.

We get to be um number three base past year. It's to offer carry trade on chain. Right. For example, our silicones were backed. It's more like an hybrid thing with sovereign bonds and and and dollar stable coins and forwards, right?

Um and we were paying for example for Argentina we have been paying for two years around 48% in dollars APY. It was the [clears throat] to my knowledge we were the high paid stable coin out there for two years, right? And all that thing was because we were able to create this basket of rolling windows hovering bones in which you can pay block byblog the interest rate and the people can exchange blog by block that rate for USDC again. So it was a super popular product, right? And same for Brazil, same for Mexico with setes and and different things.

This is something that I I'm still kind of shocked. There's no big player doing it like in a big manner because it's it's such a powerful [clears throat] thing and super profitable, you know. Um so yeah, I mean I'm a huge proponent on on non-USD stable coins. I look I think they're I think they're going to be part of the toolkit. Um but I don't think that they're the entire solution.

I completely agree with you though like completely agree with like how it plugs into local payment rails. Um the one to one the slashing the FX fees but at the same time I think that the the backbone of global liquidity is still going to be USD um stable coin denominated. I don't think it should be uh personally I it's going to be a bit contractor or like challenging but personally like fiat money USD as the inflation of the US you live in Europe why will your money inflate based on the US dollar because US dollar is inflating with the GDP of the US with the decision of the US and now you have USDC and your money like it's inflating as the US which is not your country it doesn't make sense and to me it's even more than that we should not only have USDC and euro and yen and everything. We should probably have stable dollar of crypto like that is not st like pegged to the US dollar to the to the euro. It should be like reflexer was doing that was a floating stable coin.

It's not stable. It's floating but it was a representation of real crypto mindset. So we clearly need to make sure that it's not only USD because otherwise the entire planet going to run on USD but only the USD will decide inflation. That doesn't make sense. crypto like back in the time Bitcoin is a store of value.

Now you have stable coin, you have the inflation from the US which is not even your country. Doesn't make sense to me at all. So we need to have all the the currency in stable and we probably need to build new stable coin or floating coin or stuff like that to use.

There's a there's a pretty cool case in emerging markets where you when you have like super ultra high inflation that we had here in the past uh with one of the exchanges here. What we did is like a campaign in which they can lock USD stable coins. It was at that time USCs and USDC and you can get a a loan on our stable coins in peso, right? So you can top up with your crypto card with that. So if actually it's like a credit card, you know, paying just the interest rate on USD.

But the cool thing is that when you spend that thing with the uh Argentinian stable coin, the depth that you have, right, since it's inflated away like super super quick with this, just with the stable value of the dollar sheet Argentina, you can get rid of the 40% of that debt in a year. It was crazy. It was super popular.

That's very interesting. Um I remember the reflexer experiment as well. uh inventing new monetary systems is very difficult but I at least it's analy everyone will do it crypto for challenge that's

um I think we're we're coming up on time but um really appreciate all your insights it's been great uh very deep perspectives and I'm glad we got a little bit of a debate going at least uh yeah round of applause for for the panelists