Payments 3.0: Building the New Financial Rails in the Age of Digital Assets | EBC11

Thank you to everyone to shorten your lunch break to to join us for this amazing panel. I'm really honored to have such amazing uh with me on stage about this very innovative topics about new trends with regard to to payments with fin. So uh what we'll do is really to to shift about understanding what are the new use cases what are the main opportunities and challenges related to payments sentiments and now we see that day after day we see many conseria we see many projects that arise in many jurisdiction including EU and US and so just to start I Good afternoon. Uh my name is Paul Wington. I lead the lead public policy for Stripe in the UK.

We provide financial infrastructure for businesses to build on top of from processing payments to financial services and increasingly uh in the crypto and stable coin space as well.

Thank you so much.

Hello everyone. My name is Alexander Surv. So I'm leading uh crypto stable coin products for Visa Europe. So covering all activities that we have about crypto cryptocurrency issuance they will go inside to meet you all. My name is Anthony.

I'm working in clarity global. Clarity global regulated Canadian EMI that helps businesses to transfer funds cross for border payments. Our role in this industry I would say to join with the market leaders and I would say to connect traditional games and multic events like into one unified experience. This is what we all about in one table with traia and we have to connect all the world together. Thank you.

Hello everyone and welcome. Um I'm g the CEO and co-founder of

uh I believe we are here collectively to bring the world's economy on chain. Uh our mission is to tokenize the most obvious assets fiat currency. So at s we are a regulated stable coin issue. uh with currencies like dollars commanding 50% of the onchain volume stable coins and it's a pleasure to be here with all

and just to finish uh I'm presenting myself so my name is Steph I'm working for the global firm Whites so we are advising various which is capital P and so to to this panel maybe to to start and to set the stage we will potentially discuss at first about this transition to the use of new technologies of what's been called broadly payment 3.0 And maybe to to ask the panelists what their things what there is their experience with regard to these new use cases uh both with regard to opportunities and potentially the main challenges that they perceive today maybe fantastic well in general just to set the scene I think Mastercard sees themselves for now as being the bridge between the fiat and a digital assets world so we are enabling end consumers like yourself like we're sitting here to move your funds from your bank account to a digital asset platform in a safe and compliant manner with a debit credit uh um or um prepaid card. In the same way, we also enable you to offramp that in a safe manner with a product that has been in the market for a long time, a card, but we have basically renewed that product, revamped that product because we added a new funding source. So you can now basically use your Crypto.com or cakes account, your Binance account like we've just launched in Brazil, attach a card to it, go to the point of sale and pay your coffee on a daily basis again in a safe and compliant manner.

It really that that is our main focus at the moment, allowing our customers to have the choice to use the funding source they want to to pay the way they want to across the globe 24/7 all year round. This is what my team is building um currently. Um however we are expanding our focus more also into the stablecoin space. We are enabling stablecoin settlement. We're allowing our customers to settle with us in stable coins.

We are looking um to integrate that in our overall settlement products as well to not just focus on digital asset players but also traditional financial institutions. We are um enable stable coin cards and we're very active and working with our customers on a day-to-day basis to figure out what are the new use cases that end consumers would like to go bring life to life so we can actually enable that choice

and and after maybe that do you see that that trends as more revolution or an evolution from your perspective?

I think it's both. Um I think it started on the Mastercard side definitely with an evolution of our products. So we recognize that there is a demand to um be able to spend digital assets, digital currency, cryptocurrencies or stable coins at the point of sale. Um we use that technology to upgrade, improve, make our products better. But also um with um services such as crypto credentials, we innovate, we bring to the market new products that are digital asset native for credential verification or with multi-token network.

We allow our customers to also engage with the digital asset space in a safe and compliant manner. Not just digital asset native companies but also traditional financial institutions. So it's both. It's an evolution of the products that we have but we also bring new products to the market. Yeah.

I completely agree with Roie um you know thinking about the shift from payment 2.0 to payment 3.0 I would say it's completely an evolution you know from talking about technologically and you know evolution that is natural in the business in the market however I think that this time the impact of the shift from payment 3 to payment 3.0 has a revolutionary impact and this is I think the name of the game here and you know what's driving this impact is basically the clients and we are looking on clients with multiple use cases and basically they are the clients are the one that are deriving this entire shift and you know we need to adapt we need to adjust oursel we need to integrate additional solution and additional rails in order to to be able to allow our customers basically to to used this as and it became a kind of a business necessity for them. So we must adopt and this is why I believe that the impact is revolutionary.

Oh thank you. And in that gradual transition uh Alexandra what where do you see potentially some some key use cases from your perspective? So if I may first I I come to states how how we see that because I think it's it's it's important to relate it to the uh evolution in the sense that Visa philosophy for um quite some years is uh the network of network positioning. So you know Visa brand is a card network maybe but we already have accounts and traditional mobile wallets which are integrated so we can pay from and push towards. So the first thing so the way we approaching uh crypto stable coins is how the technology expand our network but also allow the users to basically benefit from our network.

So it's exactly how you can connect uh a card to your stable coin wallet. So we can spend in 150 million uh point of location of merchants where visa is accepted. That's the first thing and the second also how we can integrate stable coin settlement in our current visa network. So using what is already there but implementing uh the advantages with stable coin do bring like 20 24 by7 payment one aspect and another one which I hope we develop further is the programmability uh and so about the use cases so first cards I mean there we are pair with this approach uh but it's definitely important to make it um usable and simple the UX is a big question I think in generally stable coin and crypto. So how make it simple uh to to spend the balance which you have um the first thing and also how to reach out all the stable coin wallets.

So we're working also on the use cases like push to stable coin wallets. So benefiting from existing visa infrastructure how we can access new additional endpoints when money can be received

and Paul.

Yeah. So from a from a technology perspective, we at Stripe, we see two two technologies that are really acting as tailwind for economic growth. One of those is AI and the other is stable coins. So what we're trying to do is try to bring those technologies forward to today to enable our users to adopt them in their operations um going forward to expand their businesses. So from a Stripe perspective, we've had a long history and we actually grown up alongside crypto.

U the Bitcoin white paper came out relatively shortly just before Stripe was actually founded. And we have tried in the past to experiment with these technologies from a payments perspective to see if they can operate at scale. So we initially turned on Bitcoin as a payment method back in 2014. Um, at the time it didn't really get much adoption um from merchants or users because it just wasn't a very good payment method, you know, frankly. Fast forward to about 18 months ago, we enabled merchants in the US to be able to accept stable coins as part of their business.

So, you know, as a customer, I can go on to your to to your website and use stable coins to pay. And what was really striking from that from our perspective was that in the first week of us enabling that feature for merchants, we saw more volume processed in one week using stable coins than in a year and a half of when we had enabled Bitcoin back in 2014. So directionally it really showed us that the technology had a matured but b there was a real moment of opportunity here to put this technology in the hands of our users. And like what does that mean today in terms of what we're seeing? Well, look, it's still early.

However, some interesting data and numbers that we're seeing today are that if you are a merchant on Stripe in the US and you're enabling stable coins as as a payment method, you're accessing customers in twice as many markets whereas if you are a merchant who's not enabling stable coins. So, what that says is that stable coins are enabling unlocking opportunity for crossber commerce that wasn't previously there. And also the value order of customers who are paying with stable coins is actually three times the average of a regular regular customer. So it's about expanding the channels for for merchants giving them opportunities to expand into new markets and also getting actually higher value order flows through from from that. So from a from a merchant perspective, this is, you know, from in terms of the title of the panel for us, it's about enabling a new type of infrastructure on top of what we already provide around traditional payment rails that offers new opportunities and channels for for merchants today on Stripe.

Thank you so much, Paul. We discussed about the opportunities of from a stable coin issue perspective. Maybe Gly from your perspective what would be on the other hands the key challenges notably on on the business and the tech side for stable coins.

Yeah. Um I agree here in the short term this is an evolution but I believe in the long term this will be a revolution. So right now we're at a stage where we're kind of recreating everything we have in Dreadfi and some of the use cases that we have seen uh if you had asked me like a year ago I would have said something else. If you had asked me 6 months ago I probably would have said something else but we're at the stage where you know we're connecting the stratfire rails with D5 rails. So this means like Monarium has for every customer a sepa connection.

So every customer gets an IPAN account for their wallet and you can seamlessly just on and off ramp through that. We have partnerships through partners with both Visa and Mastercard where the tokens become now spendable as they've explained. So we're slowly getting to a stage where we're on par with regular finance. Um and and I think like what we'll see once we start to see more of the assets tokenized and we can go into that a little bit later. we actually start to see some sort of a network effect among the assets on chain and this is when the real revolution will start to happen right you mentioned the from a tactical perspective I think we've actually solved a lot of things when we kind of issued the first euro token back in the days a single transaction cost 80 bucks right today fast forward everything is you know for pennies it takes seconds it's like you can go from a bank account to an onchain wallet in 5 seconds or less for a fraction of a penny.

Um the the the remaining thing that I think needs to be solved is kind of abstracting all the chains. That's one thing, but the real thing is kind of privacy. Because from a regulatory standpoint, it's great when we showcase all the tools that we have to kind of monitor all the transactions and how they relate to other assets, the banks actually just get envious. Uh but at some stage this is going to become problematic because you know not every business will be able to transact in public, right? So I think that's one of the remaining technical challenges which maybe goes into also kind of regulatory challenges like how do we actually make it so that companies and individuals can transact in privacy from other competition but at the same time allow for regulators to have the compliance uh oversight.

So I guess that's the remaining technical and regulatory challenges.

Oh thank you Gly. So we we have set the stage about understanding this gradual transition and uh for sure this new financial rays are really pitched as uh instantaneously interropable and compliant but what's the what's the ongoing road map and notably how could this new financial rails uh potentially be integrated into uh traditional ones and notably through existing payment networks maybe uh uh Dorisia it would be interesting to have your view about this integration as a journey.

Yeah. So as I said before I think um we see it both ways. It's an evolution of what um of the products that we have to enable choice. So we integrate proactively the the option to spend digital assets at the point of sale across the globe with our car products that we have in the market physical virtual card any market. We took this even further.

We we uh typically are used to work with centralized financial institutions obviously but we have now with metamas developed also the decentralized card um enabling um the spend through um via smart contracts. So here you can see how we are actually working with those players to bring um the digital assets into the payments world to connect those two worlds as well. Why are we doing this? Because the end consumers have been pushing and demanding for it and we see the value in actually um driving um that choice. Coming to the point there the second um I think very interesting use case that we recognize around stable coin specifically is um remittances and B2B crossber um transactions.

So we are again here we are um upgrading in a way our product by integrating the the stable coin technology um in our move um cross remittance product and then we um take it a step further. We we're exploring how we can use staviscoin specifically to u make our offerings better to like offer new services to basically make payments efficient um overall with regards to st um to settlement maybe with regards to um collateral um but not only and that's I think it's very important to remember for digital assets player because my team mainly looks after digital assets player but the innovation coming out of this is for the broader payments ecosystem overall. Thank you. And and with regard to notably the topic of uh crossber payments, Paul, what what is your views about the the use of such new assets such as regulator stable coins, tokenized deposits?

Well, the the what I'd like to do is try to contextualize what developments we're seeing like from a policy and regulatory perspective um in the context of the of the question which I think is a really interesting way of doing it. So from a crossber policy perspective, look what we're talking about here is the need to improve like payments and really a lot of the use cases here are crossber based. We're talking about I think from a policy and regulatory perspective there's general agreement um that the current state of crossber payments is not fit for purpose. You know, I think that really um gain pro gained prominence back in 2019 uh with the advent of the Libra project from Facebook that that set off a whole wave of regulatory and policy initiatives things like the financial stability boards um task force on crossber payments and so I think there's a diagnosis of the problem that we need to improve crossber payments and then now what we're seeing is different diagnoses of like the way to go about that and the different products and uh uh projects and initiatives that are stemming off the back of that. So part of that is about the regulatory regimes around stable coins which we've heard a lot about already this morning whether that's Mika or the Genius Act in the US.

So there's there's stable coins as a as a solution to that. You're also seeing innovation in forms of digital money around areas like tokenized deposits. Uh in the UK for example where I reside, the Bank of England is very pro- tokenized deposits from a banking um sector. You've obviously got a whole agenda around the future of central bank digital currencies which I I won't go into in much detail today. But then you've also got some really interesting like global collaborative initiatives going on around how to improve say um correspondent banking um through tokenization of central bank money which like the project uh sorry the project Agora which is the bank of international settlements is running which a lot of central banks and also private sector players are heavily invested in in terms of how to upgrade the way correspondent banking um payments uh work today.

And then also maybe less relevant for this crowd, you've also got interesting work going on in terms of crossber payments related to traditional payment rails in the sense of how to integrate real-time payment systems around the world and a lot of that work is quite has been driven out of uh the the Southeast Southeast Asian markets. So the reason I say that is because you've got these different projects initiatives underway which will offer new opportunities for how crossber payments can be conducted. And so you're going to end up with and this is a phrase the Bank of England's coin not my own but like a multi-moneyiverse world where we'll have different forms of digital money and it will be you know on providers and platforms like Stripe to enable the different opportunities for businesses to to use those for different use cases for different purposes and things like that. And one question and a buzz word that's increasingly popular right now is this whole interoperability. And it's not just interoperability between different kind of digital assets, it's also interoperability between all these different types of crossber payments.

And I think that is kind of like something that we'll probably see much more um resolution and clarity on in in the coming years.

Maybe to pick up on this point, I I think that's actually very true. We talk about like technical interoperability, right, between chains and all that, but I actually think one of the things that we, you know, doesn't get talked about enough is the interoperability between different stable coin issuers and how that actually gets solved. And I know that Stripe like you guys have you're in a position where you can play the huge role there. But there are also other things that can come into play like using the technology itself to move the collateral the backing of the stable coin between the issuers. And I think that's where C CBDC will actually come into play, not as a retail product, but as a wholesale product between the issuers of tokens that are regulated in their jurisdictions to make it kind of very efficiently transferable crosssue boundaries and and geographical boundaries.

I believe that also you know in terms of the interoperability also between regulators super important you know eventually regulator you know we are here we are we are developing we're moving forward and eventually regulations will what will be the place where scalability becomes a thing and I believe that the regulatory um landscape must be unified also in the in the same sense of the interperability um in order to allow us to scale eventually. You know, we are driving as a startup. You know, I can say that we are moving fast. We have the opportunity to be very agile and very fast. Talking about multiple integration and to do, you know, to take all of them together, but eventually in order for the entire ecosystem to scale, this is what we need.

What I wanted to to pick up on on that is I think we will be living in a different form of money generally. uh and uh stable coins will be like features different features of stable coins will be more important in one geography comparing to another geography. So for example uh when we think about Europe we have real-time payments so it's we less we need to solve for stable coin or we have a stable currency we don't need to to store for leverage to store value um functionality of stable coins which is used by the emerging markets however exactly crossber payments makes sense and programmability will definitely play an important role uh and and so there will be a coexistence the other thing is also for today's stable coins they are they don't solve for all the problems neither so it makes attempts to do in a certain amount of payments but you don't want to make atomic payments on a forex exchange multiple times a day it's inefficient so I think every form of money and stable coins like one of them will find its niche driven by a geography and what real problem does it solve so for going back to use cases so collateral I think you were mentioning about collateral of course this is one important thing that it can be solving or 7-day settlement which today uh fiat rails doesn't allow and we enable stable coin settlement because actually our clients can settle with us 7 days a week. So that that's very important and so depending on use case that's going to be uh stable coin will be a choice or maybe sometimes not. Uh thank you so much and maybe we'll deep dive on this issue of value and and not only with regard we we we we talked about innovation with regard to regulation with regard to the types of assets that are used but maybe also innovation with regard to user experience and and business models.

So maybe to understand where would you identify the value in those modified or uh uh updated uh pine rails uh what's what what's what kind of value do you see for retails for financial institutions for many corporates from your side

well I I think it's very important to come to the world when actually users don't know about stable coins and which rails are being used so it's actually very convenient for them and simple. Uh and today we're not there because even when we say uh it's possible to have a card next to stable coin wallet, but it's still not easy to to use that. It's easy to spend, but it's not so super user friendly to get to that point. So that's one thing. The other thing in a crossber payment in ideal world, the sender and the receiver don't don't know there stable coins underneath.

just instantly receive the money and there are providers who doing that in one case or in another case one send fiat and another and and the other side receives stable coin and it's easy for both sides that's a direction where we're going to actually create a an abstraction from uh from the rails so it's possible for our clients to use uh visa providing the rails and depending on who wants to receive fiat and stable coin both are possible

we actually see the quality of our partners has increased dramatically over the past few years. So the US from the user experience perspective I I absolutely agree what needs to happen everything from language uh to addresses to private keys all of this needs to fade to to the back and for the user for the time being it's kind of you know you remember the phrase like uh what was it like uh fintech in the front and DeFi in the back we're currently at that phase um but we're seeing high quality teams coming out of you know revolution uh Clara all of those emerging that know how to build product where they don't talk about like a DeFi thing they just talk about savings accounts and they're recreating the experience so I predict that you know neo banks on new rails especially when you have the capability to like transact with your old friends who aren't yet on board um through sea connections through card payments through all of that like for fintex of of the world it like the blockchain should be the native rails um and I I do believe and we we are seeing that happening right now uh new new neo bankanks being built on top of those layers uh and the cool thing that we've observed in our conversation why these teams are building on blockchain rails essentially because they're not holding custody right that means that they don't have uh uh have to have be regulated in their jurisdictions, they can partner and recreate the user experience of Revolute or PayPal or whatever uh with like a team that is like onetenth or 100th of the teams that they did belong to uh in in the transface.

I I I love that point. Oh, do you want to go in?

Yeah, I just want to say something also about adoption rates. How do we actually get to our customers to adopt it? For us, it's actually three things. user experience and improve user experience also maybe via partnerships, regulation and use cases in general. Now user experience I think we all agree espe in some um decentralized platforms is still tricky.

That's why I think it's also makes sense for those platform either to partner or also have maybe work also with a with another tra traditional financial institution has actually figured this out with like the likes of Revolute and they're doing it now. you see this convergence between D5 and um CFI as well. Um and we see more traditional financial institution actually adopting um digital asset native use cases overall with JP Morgan with Deutsche Bank with um Sock Gen also issuing their own stable coins. So I think this will also help getting end consumers in general more comfortable. They already own those end consumer relationships as well.

Regulation is key. I think we um we have seen it in Europe with Mika. We have seen it with the Gen Genius A in the US. the market has t picked up massively in the US because they built this clarity and then of course use cases meaningful use cases just because it exists the technology doesn't mean it solves a painoint no it has to have a meaningful use case to solve for and then the adoption will come as well so I think for this is where what we look at from our point of view and I think we also have to realize that we're pretty early in the whole adoption rate depending on the stats you're looking at around 6.8% 8% of the global population use digital assets or own digital assets.

550 million there around 220 million active wallets out there. When you look at it from when you compare it to the internet, it's where we were with internet adoption rate around 1999 and uh or early 2000s. So we still very very early in this journey and I think the industry overall has made tremendous developments over the past couple of years and gotten a lot better. But I think there's a lot more to come in terms of innovation, in terms of how um how we can get better together as well.

I I I really wanted to build on the the comment I really agree with the idea that FinTex um can build on top of this new infrastructure like you know quite a small team to be able to do this. Um I don't without getting too academic for a second look if you if you think about the the three core attributes of what makes up money. Um so you've got unit of account um store of value and medium of exchange. And what we're talking about here is innovation in the medium of exchange as in the payment. And that's happening in tandem with innovation in the form of digital money, whether we're talking about stable coins or we're talking about tokenized deposits.

And why is that interesting and relevant here? Well, because if you look at if you look through history, there are a number of examples where there there's been innovation in forms of money and payment that have been responded to the economic needs of the time. And I think that's really interesting because what you're seeing today is stable coins for example step into a gap where there is friction uh in crossber payments where it's not working the way that businesses need today. And so that's the technology responding to the current friction. But there's also a second other side to that equation which is that there's all the problems we see today and what the techn is aiming to solve.

But then there's also the things that we don't know yet which will be built that the the infrastructure will be will will provide the basis for and we've got examples of this even recently in Europe we can point to. So if you think about PSD2, you know, 10 years on from PSD2, we've got this whole wave of non-bank payment firms, open banking as a as a sector. And it it shows you that, you know, and we see this at Stripe. A number of the business models that we support today from our users are built on things like subscriptions, platforms, marketplaces. You couldn't make these didn't exist before the internet and the type of native internet payment serve that we offer today.

So I think what's going to happen in terms of a value perspective to come back to the initial question is that there's the value we can see today filling the gap from the friction but there's also going to be this wave of fintex that will build on top of the infrastructure and build new products and services that we actually just don't know what they are yet and I think that's the really exciting aspect of this and that's why that's why we're so excited about trying to put this technology in the hands of our users as quick as possible. Yeah, and I absolutely agree that that's what I meant like we're very very early on in this like innovation cycle. It's basically as I said where the internet was in 2000. So what it's coming in the next five years nobody can predict that. But I think we need to keep an open mind.

We need to be open for innovation. Try out new things. Not everything is going to work either. No, but that's how we learn. That's how we get better.

That's how we bring better products to the market. What I would say you know we are all talking about the the challenges of you know enhancing the user experience and you know what we are trying to make the payments become kind of invisible for the clients for the user experience and when all of this is becoming invisible what the value that become visible I believe is the trust you know I was walking around here in the in the conference almost every almost every stand here has the word trust in it you know and it's becoming so much important you know the trust in the system who is behind everything who is behind how to connect all the rail all the rails that we are talking about all the CBDC's and all the new product that you are talking about and trust is a big factor and this is the value what we see we are hearing it from from our clients all the time and this is the value for me you know that we need to keep the trust of the clients in the process

and thank you so much and um even though we invol previous instances you said that we are uh in a step-by-step process and that it is still early stage with regard to this ground breaking evolutions. Nevertheless, if we project ourself maybe in five years from from now and even though it's it's still difficult to to project uh at the very least even a year from now. uh what what what are the the key elements? What are the key perspective that you would have with regard to the evolutions both on the the payment side, the infrastructure side with these very moving topics both from the the way the the industry is stacking this this project, the way public stakeholders could interact with private ones in order to assess their own products themselves. What are your views in this five-year step?

you want again like thinking even before five years. I think one of important part which to think about stable coins is today we talk about that as a payments but in and which is solve many problems but not all because fundamentally it remains a debit instrument. You need to actually have money to send the money and one of the big parts which exist in the global ecosystem is actually the credit. So especially when we go to enterprise payment in the big companies it functions with a credit credit lines we pay suppliers after 60 days 90 days etc. So I think the big potential and especially for the markets with a stable currency and resolved fast payments like where we are the programmability element of stable coins and the ability to bring uh lending uh as a as a as a the way of using stable coin will be super important.

Just want to hit you one of uh use case and example to get an idea how we uh today already doing that. Uh think of a partner who who issue visa cards a visa credit card. So they can um basically lend uh lend stable coins to pay us against the receivables of the users of this uh stable coin back card. That means they don't have money yet but they will have a receivables from their clients. they got the money from a lending protocol to pay Visa.

So we will see I think a lot of lending new financial products related to credit and when those two two things will be combined and it will be a big question who will play there defy protocols new players or bank will learn how to play in this game and basically adopt the marketplace model which defi are like uh to Paul to your point how uh internet brought all the marketplaces to retail is this model going to be in a financial world that will be very interesting in there important to see.

I agree with his sentiment. Um, as I talked about earlier, I think the true unlock comes when we have all the assets on chain. I used to work as a bonds broker and it still amazes me how bonds are settled across the world like how much liquidity you actually need and how costly it is. You never see this of course because it's all hidden behind the scenes. But like we talked about like the importance of different kinds of stable coins, different currencies.

And I think this is one of the key reasons actually why even though we have a real time payment system in Europe for example we need to have the money on the same form as the as the you know the lending because as we've seen in DeFi we've had like crypto markets you know where they rise and drop and DeFi just continues to power through liquidations you know act work flawlessly. almost uh because there's no human making decisions in the loop. It just works and this is the reason why you need a a stable coin on a stable coin as opposed to you know some other system. needs to traverse at the same speed. And uh in the next five years, I think we'll start to see a lot of the other asset classes being tokenized and we'll see some interesting use cases where you can start to do real delivery versus payment.

uh you can start to do a lot of interesting things. And my hope is that by the end of the next five years, we will start to see not us just recreating what exists, but actually through some of those startups that will emerge like with permissionless like they can build almost permissionlessly. We'll start to see some of the first use cases that couldn't actually have been uh realized in the in the Traty world. I don't know which one those will be yet. Is it going to be kind of AI agents like that could well be but I actually expect the end of the next five years we'll see something completely new.

I believe you know following up on your point you know the next 5 years you know we are all sitting here I believe that we represent a kind of a full spectrum of what payment 3.0 So is how it's becoming real and you know looking ahead um through partnership eventually through collaboration between different players making this ecosystem um enhanced and and full you know you you mentioned that you don't know what will be in 5 years but obviously there will be something and like anything you know innovation come from the day reality and for us at clarity you know we see on a daily basis this business necessity those needs for businesses um to to move funds to cross border payments. You mentioned that still you know the offboarding and on-ramp off-ramp is still a challenge. It started with this but obviously it will be solved and it will continue and there and like anything also here I believe that the businesses the business demand will actually will be the one that say stating the state the the the page of what's going to happen next. Yeah, I think from my side it is um adding on what you said before making payments invisible.

I think making payments frictionless um is is my point of view. Um including using the uh benefits of digital assets overall um and stable coins making it easy for the consumer to engage and be able to spend that is number one user experience improvement on on the offramping side as well. For this to happen, I think we need to see more on the merchant side as well on terms of adoption. I think the I think we we've mentioned it before that it has mainly started on the retail side with the end consumer with the trading and so on so forth. But for the cycle circle to close for people really to be able to use the stable coins and the digital assets to their full extent at some point the merchants also need to be um become more comfortable accepting it.

I think we'll see more of that happening and we seeing we're having more and more conversations with mergers overall being open to accept digital assets at the point of sale. You have mentioned it as well. Um overall I think stable coins have also an infrastructure component. Um so this I think the more and more of this will come. I think the um I I can see that the traditional financial institutions are actually realizing that as well through the either as a new revenue stream issuing their own um stable coin using it as a settlement um tool like we do um improving their remittance products and then there's the whole tokenization of real world assets and that has massively ticked up over the past couple of months with Black Rockck JP Morgan NASDAQ and so on so I'm very curious to see what is coming out of it.

But I think we will see a lot of movement and uh development and innovation hopefully for the benefit of the end consumer making assets more accessible, easier to trade, infrastructure cheaper and more efficient.

So as a as an ex regulator and policy nerd, I'll I'll I'll give I'll try and give my predictions in that space if that's okay. So look, so f five years ago, so let's look back before we look forward. Um it was only September 2020 that the EU actually published its draft uh first draft MA proposals. Uh I always remember that because actually they they published it the day of my birthday. So it was kind of nice happy birthday from the commission.

Um so it just shows you like where we are with Mika implementation today to where we were like 5 years ago and we were really just kind of like getting into it. So if I if I fast forward five years from from today, I think look where where we are right now like from a policy and regulatory perspective, you know, we we're in the we're either in the phase of implementation or design of various st stable coin regimes around the world. uh meek is obviously in in force. Genius you we've passed the legislation's been passed but in the rulemaking phase the UK is further behind uh in the in still in the draft uh draft process. So there's been a lot of focus on the domestic regimes and that's that makes complete sense because it's that it's getting that domestic regulatory framework in place.

There is definite recognition and I think this is becoming more a prominent part of the policy discussion though that what does the crossborder international regulatory cooperation and framework in this space look like given the global nature um of the use cases and businesses we're talking about. So we're starting to see that conversation emerge in the context of of the EU in terms of what does future mutual recognitions or equivalents look like? It's in the Genius Act for for for the US to consider that and also only last month the US and the UK actually announced a new initiative to look a new task force to look at potential regulatory alignment when it comes to digital assets including stable coins. So it's it's very much a topic that's come up the agenda. It won't be something that has a quick fix but it is going to be something that I think in five years uh with the continued growth of the market and scale of adoption that we'll need answers to to ensure that businesses can scale and not get caught up in this you know whack-a-ole of national regimes that don't like talk to each other and that doesn't mean we're talking about harmonization you know it means we're talking about potentially even like equival equivalence or reg same regulatory outcome.

So you can have different rules and it won't even be that all aspects of this space probably need to be uh mutually equivalent anyway. You'll be spec certain things you want to focus on. Maybe for example the reserve backing assets as opposed to some of the things like consumer protection just as an example. So I think that would be that would be where I hope we'd get in 5 years. If I could have one more, it would be that there will be increasing awareness, confidence from the regulatory uh community about how to really leverage the power of things like blockchain analytics um for improved compliance and reimagine what uh you know AML controls and things like that could look like for payments in this in this space.

Um there's there's there's movement in that space, but I think in five years, I'd really hope that the regulatory knowledge and uptake and and and policy agenda has really sped up as well. Thank you so much, Paul. And as as we won't be able to solve everything about interoperability and and equivalence during this panel, maybe we'll try to have at the very least interping remarks of the the panelists. So maybe I I'll I'll ask to to each of the panelists some key words for the for the audience to to end unfortunately on panel.

Who wants okay um as I as I said before um I think I know for all of you probably here and also for myself um it sounds like this industry has been around for ages but that's not the case. No, we have to I think I have to remind myself every day we're still very early on. 220 million active wallets is not a big number in the big in the grand scheme of things. So there is still a lot of innovation coming. We have come a long way.

Um keep an open mind, work together, collaborate on the CFI and the D5 side to bring the meaningful use cases to life for all the end consumers.

For me, I would say that the one key word I would uh want to leave you all with is bridge. um in the sense of uh we need to bridge to be able to to bridge between different technologies between different rails between different architectures. Um I believe that this is where we position ourself at clarity in a place to be I would call it like a the connecting tissue between different rails between different settlements and to be an enabler by by bridging all those technologies and all those rails um to enable our clients everything that they need eventually.

Yeah, I would maybe just like to call on all the builders out there. I mean I think we mostly have many of the components already you know solved. Uh we need more user applications userf facing that you know are comparable to what they use in chatfi. Uh so I would actually just like to use the opportunity to call on to all everyone in the audience who's actually building something like yeah that's that's my call like join join the evolution it will become a revolution. Can I can I also jump in on there because I I I'd also like to make a similar um appeal to to any any builders listening which is that I think the phrase I'd like people to take away from today is global from day one.

And what I mean by that is at Stripe we are seeing fintexs build on top of this infrastructure and think about business models and operating globally from the get-go. And if you think about previous generations of fintech like 10 years ago, it was like a local from day one. And I think the the the kind of technology and infrastructure underpinning this um this evolution is actually enabling that global from day one mindset. And that's definitely what we're seeing at Stripe. So yeah, global from day one.

Can I add to that? If you remember the days like of the early like telos, right, when it cost something like 10 euros cents to actually send a text message and that kind of defined the behavior of us using this technology and if you god forbid had to send the text message abroad, you know, you'd pay a leg and an arm. Uh what happened was that the internet kind of allowed everyone to exchange globally from from wherever you sit in a peer-to-peer manner. And this is slowly happening with uh with stable coins and blockchains. And I do agree.

I'm probably sort of the naive optimist. I hear my co-panelists talking about like in five years we'll be you know hopefully with the correct regulation. you're probably right. However, like things tend to move slowly, slowly slowly and then suddenly. So, I actually think the next five years could be way more interesting than we are kind of talking about here today.

So, from my side, three things uh to take out of this panel. Interperability will matter a lot. There will be many blockchains that made these stable coins. abstraction and user experience super important will be key for adoption and programmability and credit behind that the financing that will be really transforming the financial ecosystem.

Thank you so much. I I would like to to to thank uh the the panelists for this fascinating debate. I think they deserve a a huge round of applause.

And we are on time

and just to tell you that this the the debate has only started. So feel free to continue the conversation after the the debate. Thank you so much.