Unifying Settlement Layers: Infrastructure, Interoperability & Institutional Access for Stablecoins

Hello everyone and welcome. Thank you for attending the first panel of the day. Uh it's still quite early so thank you for waking up for this. Um I remember the first uh edition of the stable summit which took place in Paris and uh back then when I told people that I was going to a stable conference, people thought that it was so boring and that I would just fall asleep during uh the various panels. Now apparently after years of struggle in trying to find a way for crypto to go mainstream uh the only thing that makes sense is a coin that is worth $1 at all the times.

So it's it's quite quite interesting because this panel has uh this uh summit has quite become the the main topic uh today of the of the crypto world. And so before diving into the infrastructure, the payments and all of this, I would just like to set the stage and talk about the current crypto landscape. So for years now, we have had two centralized actors that have been dominant in the crypto uh stable coin space, which are Tether and Circle. And so with new stable coins launching, we have new actors coming in. We have institutions, we have banks, we have Walmart, uh, Revolute, Ripple, whatever.

Um, we're having a lot of new centralized and decentralized stable coins coming in. And so the first question would be do you expect uh tether in circle to remain the global actors that dominate the space or do you think they will start losing their market share um and just uh fade away for some actors that are more established and less cryptonative? Feel free to I I can start if if you want. So there's a lot of industry when uh when you as the original leader you take the the lion chair of the industry. So it's really hard to say will it be the case here or not.

Uh usually institutions um the the overall thinking was USDT will not be the stable coin the institution will be using. It doesn't mean that it won't have you know existing or new use cases for um for retail and and remittances and kind of thing. uh what I could see in my seat quick introduction. So I'm Char Johnson. I'm the managing director for all digit data set at S&P Global.

So the credit rating agency for index S&P do indices commodity insight and and other divisions. We created um a product a year and a half ago to look at the risk specifically of stable coin, the risk of DPEG. And it was very interesting to see the kind of reception we we got like it was uh bigger than what we thought in the sense that almost every bank you mentioned corporate but it's it's really a global global phenomenon right now every banks are looking at launching their own stable coin uh some regions are looking at launching their own stable coin so while it's hard to say if you know USDT and USD will build as a leader in in five year in 10 years etc what we can see that there is uh a lot of competition coming. We saw then there's the competition to stable coin. So in some country you got the CBDC's but also you have the JP Morgan uh deposit token that was announced.

So, uh, I think it was going to be by use case. USDT will probably continue to lead where it's leading now, but the institutions and and the amount of well technically potential hundreds of billions that come with them will probably go to somebody else. Yeah, from from my perspective it's the question how we define the market and also at the stage of the market that we are in right now because I think if we look at the crypto industry and I think we we all know that in the crypto industry um the name players like circle um and and tether have uh almost the whole market under under their control. Um but it's just just the crypto market and uh as many market participants also expect stable coins to grow towards industries kind of like let's let's call it in in the normie world. Um so uh I think it's the question how how the market distributions maybe in two in five and 10 years will uh will be there.

Um and and there's another factor that that I personally really believe in. Um, so it's actually my theory that the closer we bring stable coins to the masses that local currencies will have um an huge impact also on the distribution. So what does it mean? So we're located here in in in Europe. Uh we have euro as the base currency when you go in to a cafe or to the beach bar to to get a drink.

Um and um especially people who earn their salaries in in euro they they want to spend in euro as well. So therefore um I think there will also be some sort of redistribution again. I can't say much about the time frame uh in two years and 5 years and 10 years. Um so where eventually also then local players can play an important role. He and I were actually just talking about this off stage.

Um there there are some very large players that were previously looking to launch their own. Uh they ended up some of them ended up partnering with Circle Um, I don't think that long-term that's sustainable. Um, I think, um, he mentioned deposit tokens. This is probably the the next big wave. You know, the the stable coin construction arguably has a structural limit in the sense that what percentage of Jamie Diamond's balance sheet do you think he's actually going to let, you know, these squid companies effectively control, right?

Is it.1% which it kind of is now, or less? Is it 1%? it's not going to be 10%. At 10%, you know, he's he's going to say, you're basically this 40 person company is extracting away from me my customer balance assets.

And so what you're going to see is either they're going to there's going to be a regulatory push back at some point, or as we've already seen, the banks are going to rush in with their version, which is basically tokenizing their own deposits. And we've already seen it start with uh with JP Morgan. I've I have meetings daily with banks on this and I think that the as you know again Charles really kind of framed it accurately like the the whole world just kind of woke up when circle went public um I was having daily meetings with banks in the weeks in the two weeks after and they were kind of slowly and then more aggressively kind of freaking out um so what I would say is like you're going to you know it is definitely going to get much more interesting very quickly I think it would be a bizarre moment in, you know, kind of footnote in history if these like two, you know, decent but not exceptional companies that, you know, that just happen to have a head start somehow end up, you know, becoming the um, you know, the winner take most of um, you know, of representation of dollars. I will give you one scenario that I highlighted to uh, two banks, two of the largest banks in the country that freaked them out. You know, going back to this, how big can the stable coin construction actually become?

The one way that it could become bigger is if and I do expect both of them to apply is if they try to become narrow banks where they actually are able to hold direct liabilities of the Fed. Historically, the Federal Reserve has never wanted this for macrocredential stability reasons we won't go into, but um I think you know there is a new Fed chairman coming in the next um 12 to 18 months and that that is not it's not a given that we won't have a narrow bank construction emerge that would give a direct path for either Circle or Tether to take their strategy much more mainstream. Maybe hello um you're right some on some long-term perspective but I think from shortterm and midterm perspective uh so we from S forge we issued two stable coins so one euro and $1 and to be honest to compete with with stator and circle is really difficult there's a network there's a distributor there's a liquidity premium and even if you want to compete another use case like payment because as we a bank. We want to integrate our stable in in the legacy system of the bank also for settlement asset in terms of securities security settlement. So it is the kind of thing that we can add and we can compete with with TA or circle but at the end you need to have a liquidity layer that is quite enough to uh to bring the user and to make the the the ecosystem comfortable and at this stage and I I don't have a crystal ball but it would be uh very difficult to to compete with with this two stable cocon it will get bigger and bigger and they will have the resource and maybe the lobby to uh to ensure that they would become regular regulatory compliance with with the US with the European etc.

So I think the competition would be quite interesting but it would be difficult at least at least on Ethereum where my I am a sole domain expert on Ethereum uh as the ETH max of Wall Street you know base rollups allow banks or any type of financial institution to have its own private permission execution environment that is synchronously composable against the Ethereum L1. You're going to hear much more about that next week uh um at the blockspace futures and the base rollup day. But you know the the the innovation that has happened in Ethereum where let's just to be clear 80 plus% of all stable coins exist on Ethereum. Um I'm not sure that these interoperability layers or the circle or tether constructions are even going to be relevant in the future to be honest. Just for the sake of the debate.

Uh so I I I was interested by your point on on euro. I I spent more than around 15 years in Argentina. So I kind of really see the demand for US dollar that they are in other places in the same stable summit in Singapore. I mentioned that I think some country can end up losing their currency. And since then what has been very interesting that even country like uh the UK are now uh there are conversation with central banks.

There were there is a concern that there could be a doification of even big country like that right we're not speaking of Venezuela Zimbabwe was thinking about even in the European Union I think uh Christine Lagard uh asked uh the country just recently to to focus on stable coin because well the US is launching this stuff so I think there's a case to be made that well stable coin have been so a tool for mass domination of the US dollar and they could beat it even more. Now on the point that were mentioned on on that side of the panel, there's one more consideration that can lead to well the the very strong long-term success of stable coin and it's that the US need a buyer for treasuries. So there's a world conversation around well will the the stable coin be the biggest buyer of treasuries many and I believe that it's it's it's likely and then all the implication that come with that there is I want to go back to what you said Peter you said it depends on what you want to compete on and I think that uh guy who is the CEO of Athena made a really good point in one of his podcast with uh Guart uh he said that there are essentially three layers of competition for stable coins today. The first one is trading. So on centralized venues such as for example Binance or Kraken or whatever uh where the most of the liquidity of stable coins are today.

It's essentially used for trading uh uh various pairs and uh there USDT is dominant because it's the one that has the deepest liquidity. It's the one where there are the most volumes and essentially today as an exchange you want to integrate USDT because most of the people have USDT. Then you have the payments uh the payments infrastructure where uh today USDT is also dominant because uh when you look at the USDT distribution per blockchain you have around 70 billion of USDT sitting on Tron which is essentially not a compliant blockchain uh from what we can say about Dustin Sun but uh it's a really cheap blockchain which is really fast and which has been historically uh used for uh stable coin transactions and when you listen to Paulo Arduino from Tether He says that US on Tron is essentially using countries like Argentina, in South America or even in Africa. And then you have the yield uh the yield where you have yield bearing stable coins where you still have some place where you some space where you could compete where basically people would hold stable coins um to to perceive yield on their on their dollars. So I I think it's it's a nice basis to summarize like the various areas where the stable coins can compete today.

Um now let's let's go to the next topic and I mentioned Tron before uh and I think it's one of these points where uh the institutions have so far been quite reluctant to use USDT or use Tron because of the reg regulatory hurdles. Yes, most of the tether on Tron is uh is there for a very specific reason that um and is controlled by a few large individuals. Um so I I don't think the prevailing narrative is actually accurate. I don't want to go into a lot of detail about it, but um I think a few large Asian whales um have financial arrangements that uh um have resulted in them having that tether on Tron. I would also say, I can't confirm this because I haven't used Tron, but apparently the fees have actually gone up quite a bit recently.

Um so I'm not sure that that previous take was actually accurate either. Yeah, I I add on on that too. So, um I think it was Castl Island Capital that sent a report on on on stable coin last year where they dived in this kind of use case and saw that actually Tron was not used that much for uh like in country like Argentina. I personally never met anybody in Argentina using Tron. The big blockchain at least two years ago when I left uh was BSC will be in B right now.

uh and and it was USDT. The way it works just for the audience is in in those country you don't had get like well now it changed a bit but you don't you used to not have direct access to the US dollar so you would go to a place which well they are everywhere called black market in Aqua and you will exchange your pesos for dollars and then since 2020 you have almost half of them that give you access to stable coin it's always it was always USDT on BSC and never so Um so from also also halfway also responding to to your points. So like the um like the use case that that you call yield I always call treasury and then I put these these two use cases in there. So the one is earning yield and the other one is for example countries like Argentina or Turkey who have instable local currencies so that that they want to hold money in those currencies. But um aligning it again with uh with like the timeline.

So who what is the market right now and what is the market tomorrow. So I think the um also like what blockchain is used is it Tron, is it Ethereum or is it someone else? Is it a layer 2? Really depends on the market distribution. So that's happening in those in those relevant markets.

And um so I at least have the have the perception that over the last 12 months there's really a lot of startups also popping up um really trying to address again people who are not naturally in the crypto space and already know about stable coins and about all that infrastructure and eventually already have a an own wallet and an exchange account and so on. So those companies are addressing the people who are not banked in the crypto world right now and and I think that's the that's the major difference. So therefore I think the the cards can be can be mixed in a new way again. So especially when these startups and and companies and eventually also banks and institutions really do a good job and onboard new people into crypto. No, I just wanted to to come back on the TR issue because um I understand that you all the TR USDT holding is is held by big well or this kind of quantity but at the same time the the tity take it quite seriously because they want to to mitigate this risk of concentration by pushing plasma all this kind of new layer one.

there is a risk and I think it's not only well on TR and the remittance use case in TR is quite real on that point. Yeah, I think that that's the topic I wanted to get in because uh we are seeing now blockchains which are focused on stable coins like you mentioned plasma. We are seeing from tether's perspective as well that they are deploying like UDT0 for example which is crosschain compatible which is uh quite uh similar to what uh circle does with CCTP as well where you can basically transfer stable coins from one blockchain to another uh in a really easy way. And so the question I want to get to is how do you perceive the role of various blockchains within the stable coin space. Uh because today we have Ethereum which is obviously dominant and then we have Tron as well and then all the other ones launching or stable coins being deployed on other blockchains.

Do they actually matter and in the long run will we will we even know which blockchain we are using? I think this is Tether's third uh blockchain now, right? We had I'm old enough to remember Omni. Then there was the EOS fork. I think they still run that one.

I'm not sure. I think they discontinued it. Oh, that one too. Okay. So, this is round three for them.

Um yeah, I I think I I'm not sure it's worthy of the time of the conversation to be honest. Um I think um I I I just wanted to throw that out there. Uh the the other thing uh I would a spicy take which not exactly relevant but you know getting back to Athena I don't really think of that as a stable coin it's more like high yield in a sense it's a different type of risk you're really taking kind of cascade risk and operational risk just to kind of point out but I'll let the the rest of the panel address this question um I I would just in general say we should make sure that we don't end up with kind of like amount of developers in the blockchain chain area equals the amount of blockchains that we have for for different use cases. Um so because that would be in particular bad I think um it's um so right now we let's call it we have we have blockchains that are multi-purpose. So in the end you have like for example Etheum you do asset tokenization you have like different kinds of assets and um in the end the the use cases for for those um for those multi-usage blockchains are in the end now still emerging and we still find new forms of usage for it and um and therefore I think um it's way too early for like specialization um I would I would say so like specialization might come so if especially if all the the use cases that that we're going to have for stable coins in the future if they really shape out and really uh find mass adoption.

So then then there might be enough scale for that. But I think right now where you also use stable coins for trading on a DEX and if the DEX is uh is sitting on on public Ethereum or on layer 2, you want to use the stable coin there. So therefore for the the the moment we're right now in I think CCTP and uh those uh kind of native um mint burn um approaches are still the way to go. So there is a channeling CCTP uh for like the like crosschain extra but there are some other interesting project I don't know if you heard of Ubisix for instance the they're creating this kind of uh place where banks can go and exchange a stable coin for for cash or any other stable coin. Of course here here we're back to one of the topic I'm looking at the most which is world risk.

like all stable coin are targeting a peg but they're not all made the same way and they'll have different risk which will affect well the yield they can get or how easily they can be redeem in something like cubix uh but the goal will be probably yes to just be abstracted from that in some form uh now there are hundreds of stable coin being built it's likely there'll be a consol consolidation at some point just one quick comment on on Ubix. Um so I think the the game changer on that end is really um uh streamlining the like the redemption process and so on. So actually I would say not the part that's happening on the blockchain. So which I think is already quite streamlined but um really managing what's going on when I swap from one uh stable coin to another and kind of all the offchain stuff being handled. I think that's uh that's really the game changer.

Yeah. um are just one point on my side. uh so interoperability and all the croch is is great but at the end for stable condition it's quite difficult to have so many layer one layer two and to be native to all these kind of blockchain it's a lot of resource and in terms of liquidity you need to pay a lot also to to be present in this kind of blockchain and in the blockchain you need to be present on some protocol so it's not sustainable in terms of business case for for stable because you need to pay the market maker, you need to pay the distributor, you need to pay also the protocol in order to bootstrap the liquidity to be honest. It's quite a nightmare to to have to have it. So cross protocol crosschain protocol is nice but I think at the end it's like your securities you know when you uh by in Europe particularly you have a lot of custodian so you have national custodian local etc and you do a lot of consation so you have a lot of set place and now it's the same for for this ecosystem but not on the settlement thing but on the execution thing so I think it's not sustainable and that's why at the end there would just one, two or three layer ones that will that will exist because uh it's not sustainable.

It's not it's impossible. Yeah, I that you touch on a really good point which is fragmentation within the stable coin space. So we have two types of fragmentation. The first fragmentation is between the blockchains. So which fragments the liquidity uh and then you have the number of stable coins which are available on the market.

So from the standpoint of a user for example when I go to a store and I want to pay with uh my Apple pay I don't think uh which euro or which dollar I will be paying with uh I know that it will be accepted anyway when we look at stable coins. So for example I think the the best example would be to take Walmart which are working on their own stable coin. it would make sense for Walmart to accept their stable coin within their stores. But for example, if you are using USDC for example, you would go to the store and it would not be accepted. So you would have to swap towards from USDC towards a Walmart USDC and then have a wallet on your phone which allows you to do that then have Ethereum or whatever to pay fees to do this.

Um and so with this uh type of fragmentation, do you think that we will have we still have we will still have uh stable coins that will be a marginal use case for example which will be kind of internal to some companies to some organizations uh which will be running only for them or do you think at some point we will have some unity within like this whole space where uh we will have an abstraction of stable coins that we can use that could be accepted anywhere. Okay, I can I can start. I think one of the use cases loyalty points that the kind of thing that makes the most sense to me like when you look at world airlines or even Walmart like do they really need their own stable coin for PayPal is different. You can see more the the type of company and how they could use it. I'm not familiar with the detail of of the world stable coin and and how it would work and what was the goal but I'm I'm thinking loyalty for that type of uh use case.

One thing I didn't say all opinions are my own and not of my employer. Yeah. So I also hope that um the future of stable coins um is not like the how things happened in the past with e-oney. So kind of that you get stuck in kind of like local verticals. um that are not interoperable to each other.

uh so where you only can spend money like in whatever at one shop and and uh it's it's kind of close to to move move money over and um so therefore I think the the most important part is that um so even if um companies um are going for for their own stable coins so that they use the same technology as all the open projects so kind of uh public permissionless um the best so open standards because then we can make sure that all the components that are also delivered from the industry like wallets and custodians and everything else which is needed is really also provided and that's I think the foundation for interoperability um and but if Walmart and whatever Zalando or whatever players are moving forward with their with their own stable coins I think at the stage of the market where we are right now it would still help to to reach mass adoption because in the end it would bring stable coins and the technology to more people um and I think that's uh kind of looking at the the distribution uh definitely something we should strive for. Yeah. Uh the same on the I think it could be a kind of niche for Walmart or this kind of stable coin is just to play with stable coin but when you want to go in this business you need to uh you need to compete with with the dominant stable coin and you need to push use case at scale and not just to pay for Walmart or this kind of stuff. So uh you need to be big and at the end stable will be I think a kind of commodity uh the margin will be like thread five where all the margin would be take would be taken by as a distributor. So you need to have a kind of good caution in terms of market cap to uh to uh to be sustainable in your business.

Yeah. Um, as our panel is supposed to talk about institutions as well, I think it's important to mention some of the main things that institutions will be looking before going into a stable coin, using a stable coin or deploying one. So, what are the most important factors? Is it the blockchain that you're looking into? Is it the scalability, the fees, uh the redemption, the fiat uh counterpart that you will be using, the uh yield that you can have on the stable coins?

What are the most important factors for institutions today? There are a lot of uh we we went through the business case step by step. Uh so maybe the only advice at that time that we u we have is you try to get all the compliance stuff validation internally as soon as possible and you issue as soon as possible because you don't want them to change their mind. So you you you you push it on the blockchain and after you uh you try to um to make your product better uh in the time. Uh so the and with that in mind uh I think the main things for for stable coin issuer uh to make it happen and to go faster is to uh to uh to have a lot of partnership a big big distributor to focus on your area zone first.

So it is if it is Europe, you need to have the big player in Europe if it's compliance of course because uh but we wanted to go through Binance but it was really difficult at that time to be honest. Uh and you need to find a good good partnership in order to distribute your your product and after you cross the finger that they will accept other use case like DeFi or this kind of stuff because it's it's a nightmare to uh to struggle with that. But yes, you you need to go step by step and you you need not to be scared uh to deploy and to uh to go forward. Yeah. In my conversations, they don't really know.

You know, they're still just trying to figure it out to be honest. Um experiment. You know, one bank said, you know, we love Ethereum. We know that's kind of like where the long term is, but you know, in the short term, we're going to play around on other blockchains, too. I said, good.

Go play. Experiment. Have fun. um you know take their foundation money to help you you know to pay to pay to pay to learn. Um but they just like they don't know like they're a lot of them are taking a lot of meetings so that they can wrap their head around what's going on.

They really don't know to be honest. They I'm being serious like a lot of them have not thought about this narrow bank situation were very concerned once I raised that fact you know um um I mean circle already has applied once so this is not a new thing. They applied I think a year or two ago and got rejected of course. Um but when I raised this they you know because up until now certainly before the election they were dismissive of this everything after the election that has gradually changed the circle going public there's like a holy whatever we have to figure out what's going on here. So they're in this like learning phase.

um this like the idea of like the network effective liquidity or whatever is like not yet something that's fully embedded in their brains. Um even some of the savviest players like what I was he and I were talking about earlier that have like longerterm master plans, they have in the short term traded off to work with the circles of the world. Um, but I couldn't see them um realizing that that's not a long-term solution and having to kind of pivot back. So again, even the savviest players are still trying to figure out what their long-term strategies and what what's important to them. Yeah, I think you mentioned already quite a few points that are definitely relevant when doing a decision.

So like scalability, low fees, also governance model of the of the blockchains and so on. Uh degree of decentralization. I think these these these aspects are important but I think there's also when it comes to institutional adoption one important thing that I think also many many institutions don't calculate in and that's simply the fact that we're talking about a product here which is deeply rooted in crypto and um so so like most usage of stable coins still is in crypto also for DEX trading for lending and yield and like everything that that that we're building here also like many people of do and um and in the end so also the money is earned in in in crypto and um so I think um also when companies are are mentioned in a let's say normal way so they're looking into okay what's the business case where can I earn money and so on and when once they start realizing oh it's I I earn the money in crypto so then potentially this the project uh gets slower and uh and doesn't move on as as quickly anymore so therefore I think um when going as an institution into into the stable coin market you need to accept that um so money and uh and also kind of uh like revenues are made in in crypto so the business model is around crypto and like when the long-term adoption comes of course so then um the uh and also all the use cases that you mentioned then really kick in so then we move out of that uh of that crypto world and it becomes a normie world but I think for at least a few years it will be crypto what we were lacking was really the regulation at least the regulation in the US um the line between crypto and trady digital asset will blur. We'll already see that when we see when what Black Rockck's been doing, right? So we we mentioned the IPO of uh of Circle but the interest in stable coin I think started um for many institution if my memory is right it was 2022 when Black Rockck invested directly in circle.

This had all the other more reactive maybe or or not as involved asset manager really scared and interested in the field. If Black Rockck is doing this, we should look at the field. Then of course you had the the the beetle uh actual product which uh is not the stable coin but shows how well they're not playing only in bringing uh bitcoin and ethereum to trafi is also bringing trade product and yield uh to defy and uh so this line will continue to blur because we one of the biggest topic right now is also vaults and all the the banks and fintexs are looking at that. So you start to get the the yield from um from triy into defy the y of defi into trfy and then it's going to continue to to blur more and more but we'll touch on regulation I think in one of the next questions. Yeah yeah yeah we are getting there.

Um just before getting to to to the regulation part I wanted to talk about the access that we have to stable coins today. And when you look a few years back accessing crypto, you could only do so through sexes and basically you would deposit euros and get in exchange uh some crypto cryptocurrency. So it can be stable coins. I think ever since the on-ramp in offramp for crypto has quite been solved uh in some way. It's way easier to access crypto when you look at wallets such as MetaMask or Phantom for example.

uh you can basically Apple pay your way into getting some Salana and to start trading. Um when you look at applications for example such as Moonay they offer a really easy access to that. When you look at Sexus which are still present you can look at Kraken and their on boarding which has been great for users and it's been one of the main venues to onboard and offboard your crypto because it's in almost instant transfers with low fees. So do you think that the on-ramping and off ramping still has some improvement to do and do you think it's it has been solved or can we do better? I'll start first but be fast.

Yes, there's a lot of impro improvement to be done. I mean metam mask is not something that is easy to use for most people. If you've been in in Ethereum for a very long time, yeah, you use it every day or it's you use it for a very long time. But if you want people I always take this this use case, right? So in Argentina, you buy a house in dollar in cash in wos.

You buy a car, you can do it in dollars. You don't buy a chocolate, right? You don't do your day-to-day life with with that or with a stable coin. And the reason is well, you don't have an easy way to do it. And the wallet out there today are nowhere near to the ease of use of Marlo Pago uh cash or you know like Uber cash or whatever you call it.

So there's a lot of improvement to be done. Yeah, it's a lot of problem. uh from my personal experience uh of of is an important feature for subsure especially for their participants. So they need to uh to sell euro against euro and the opposite but as a monk we struggle to to offer it during the weekend for example. So there is a kind of stuff.

So we need to improve uh we need to improve it and uh today the best thing to to do the front is to go through PSP or this kind of actor but not directly on the wallet or other facilities like this. Um I think I think the improvement that we need to do is that uh people are way more on ramping than off-ramping. So uh the best would be that offramps wouldn't be needed, right? So because stable coins would always stay in circulation or are maybe matched against each other um and the rest is happening in the background or maybe between the institutional or non-institutional um players who are um issuing the stable coin. Um but yeah, so um I think as long as we're and I think I still always hear these horror stories of people who cash out of the crypto ecosystem and their banks uh close their accounts and and all this kind of stuff is still happening.

Um so therefore I think the like the the on-ramp might be solved but the off-ramp I think still remains remains a problem. Yeah, I I agree. Metab is terrible. Um I stopped using it. I actually have kind of a slightly different take on this and actually where some upcoming announcements um that we'll be making about some of the things I'll be leaning in on.

But I actually think it may not matter. I think stable coins may simply be used for net settling at at the bank level. Um you know if you look at um you know if you look at the the transaction flow of how say a company like Stripe has to net settle between its major financial uh partners uh internationally and even domestically. It can take many days for them to uh complete a transaction say for a US customer of Wells Fargo transacting in Japan or or another country. Um, and if it's in an emerging market, even longer than four or 5 days, much longer.

And so that's where you can see this huge unlock of stable coins simply being used at a wholesale level uh to solve um, frankly the fragmentation that happens in the back end. So if I was asking these guys earlier, have you ever heard of Hurst at risk? um which is I encourage all of you to to look up but this is a multi-t trillion dollar problem in the global financial system that Ethereum can fix today by having robust um you know near CBDC or you know sound deposit token or or even uh commercial stable coins that allow banks to net settle in near real time rather than 24-hour or multi-day cycles. So you may be using your Apple Pay uh to do a debit transaction in dollars but on the back end the banks or fintexs are using stable coins to net settle that. So I'm going to be working with financial institutions and and and presenting this story more comprehensively in the coming uh in the coming months and years.

But that is where I see the the space maturing. Uh just to add one more thing to um or one more aspect to what I just said before because um also if stable coins in the future are used in a way that you get a stable coin, you do a transaction and then like a redemption happens on on the other side, I think we don't win anything because in the end, so we're definitely also not as cost effective as anyone claims that stable coins are. I think stable coins are going to be very cost- effective if they stay in circulation kind of you do a transaction maybe like a uh trading firm does a does a transaction um some some people like abroad are paid then they put it into yield onchain then kind of the protocol uses it at the next step at the next step and then kind of we have these of course like cascades that we're going to create but in the end that's kind of where the where the value is and uh where the productivity of the money is and on the payment side as you mentioned We we meet a lot of demand to meet our stable coin, our dollar stable coin in Euro in order to send the dollar stable coin on cross border. Uh and when you can pay with the stable coin so you can fix this crossber payment thing and it's a huge market to be honest multi-rillion. Yeah.

And that's why to have a range of currency as stable coin could be good things for stable coins to compete with other coins. So here's a little here's a little alpha for the for the builders in the room. Alpha. Yes. We can't end without a little bit of alpha.

Um you know the the the one multi uh you know multi-bank multinational in uh solution that was presented in 2002 to the bank's problem of this FX settlement is called CLS. You can look it up. A continuous link settlement. But it only solves the this problem for 18 currencies. Uh just to put that in context, no currency in Latin America is covered by CLS.

And so, you know, there's this is a global problem with a lot of different currencies. You're going to have a we need we need people in every country basically having uh stable coins uh in their local denominations to help solve this problem. Perfect. And to end this panel, I would just like to talk a little bit about regulation because we have two major uh changes both in Europe and the US which are coming up. So in the US we have the Genius Act uh and the in Europe we have the Mika uh regulation.

So uh what are your thoughts on the implementation of stable coins? I know the Mika one has been quite controversial because of the yield especially and then the genius act is supposed to bring the stable coins to everyone in the US and allow um institutions to use stable coins as they please. So what are your thoughts on this and do you think it will push the stable coin adoption even forward? Yes. uh so it's there's a before and there's an after right especially with the US just uh for companies in the field are I was speak I speak with many three are moving to the US because of that we need to remember that it's a field where the US were working really against us they were behind in regulation but you had an an administration in general which was really not helpful now there is a tailwind and the regulation is changing a lot of things just the fact that the regulation is was discussed had many bank look even more banks because when I mentioned we launched a product was mostly bank in outside of the US that was that were looking at stable coin stuff so it will have a huge impact and then there's a clarity bill also coming so the US will become a leader in the stable coin world and probably more than with the like of defy and digital asset uh mika yes there's some like you really feel that they don't like stable coin that much when you see the restriction that were put in place and and they've been released a bit but you have a limit on the amount of transaction you can do the the amount of money that can be transacted in a day so then they change it I think only for for non-uro stable coin but yeah um yeah so so I I think in general um I would also agree regulation helps to um to get more more users into this space because in the end the people who want to use an unregul ated stable coin or also like in the crypto world I think any anyone can do so it's open to anyone globally um so the maybe institutions that that want to use a regulated one so they can choose a regulated one so therefore it brings no more users to the space I think the only um exclamation mark we need to give here is kind of especially when we have a regulation popping up in different jurisdictions uh it's somehow needs to be compatible to each other because we already see kind of like a a patchwork um patchwork regulation popping up.

So for example in the UU with the MA um what is so there's it's called the multiissu problem. So when circle um has like UTC being minted from a European entity and from a US entity or like from an entity from a different jurisdiction technically the token is the same but uh as a user you have different redemption rights. For example in the U you have a right for redemption. It needs to be free and and so on. So there's this like arbitrage that you then even can use like when uh you're an US user and then kind of like being uh applied or having European law applied to you.

So this is like this makes it really complicated. Um so and I must admit that um I don't have a proper solution for that right now but I think we really really need to take care for those ones because we want to have an interoperable um means of payment um and we will only achieve it when also the regulations that are coming up are halfway aligned to each other so that interchangeability and funability is guaranteed. To finish off this panel, I just want to ask you each uh each one of you to give one sentence to uh respond to this question. So, we've had multiple narratives throughout the years in the crypto space. So, we've had DeFi, we've had NFTTS, we've had the metaverse.

Still, right now, the global consensus and that's how I started this panel is that the stable coins will be the most adopted thing within crypto. Why do you think the stable coins stuck more within the crypto space and why do you think uh it is the case today? So it's one sentence just an easy one to finish off. I will start uh by one sentence it touch everyday life. So you can pay with stable coin for everything.

So it's it's appealing for for customer and it would be appealing for institution if we uh we um it's not only a payment but also a treasury asset. It would be nice. the existing old system was so bad that the new one was, you know, sufficiently better. And the, you know, to restate the question, the killer app of blockchains is the movement of capital. So I think this perception of everything you mentioned is really because they already exist.

there already a successful use case of tokenization tokenization of cash but it's hard to say if it's going to be the the biggest and there's a lot of other tokenization happening that will happen yeah I also disagree to to your question a bit cuz um so there's a huge hype topic which is called reward assets in in crypto right now and to me stable coins are the first reward asset that will hit the masses thank you very much give it up for the speakers [Applause]