Stablecoins, Digital Money, and the Future of Payments - TOKEN2049 Dubai 2024

All right. So, we are the last panel. So, we'll try to make it entertaining so everyone get to their drinks. Um but really excited to have these great panelists with me to talk about stablecoins. So, uh let's have everyone introduce themselves and I'll start with you, Guy.

Hey everyone. My name's Guy, founder of Athena Labs. Uh we're an issuer of a synthetic dollar. Uh what that means is we take in crypto collateral and hedge that collateral uh using derivatives and we issue a a dollar against that collateral. Uh came out to the public about 2 months ago and growing to around uh 2.

5 billion dollars of supply in in those 2 months. Hello everyone. I'm Paolo Ardoino. I'm the CEO at Tether, um the largest stablecoin in the market. Um started in 2014 uh from a simple idea, let's put the most used currency in the world on the best innovation than that uh we had in the recent decades, blockchain.

So, so far today we grew to 109 billion dollars. I'm Nick. I'm the CEO and co-founder of Agora. We're building a digital assets and payments platform. Our first product will be a freely tradable digital dollar and we partner with businesses uh and share income based on services that they provide to us.

Our view is that you should, you know, share income with people that drive utility and then put it into your stablecoin. My name is Martin Carrica, uh CEO and co-founder of Mountain Protocol, and we issued the first prudentially regulated yield-bearing stablecoin, uh fully backed by T-bills. Great. Um so, Paolo, you just mentioned your 109 billion outstanding today. That makes you 80% of the market depending on where how you look at it, maybe more.

Um clearly stablecoins, as you said, has some of the best, if not the best product market fit in crypto. It's an oligopoly today between you and Circle for the most part. Why do you think or what do you think of the fact that there are so many new competitors in the space? These, you know, these three guys being some of them. You know, many more that we see launching every day.

And how do you kind of entrench yourself or keep that market share relative to everyone who seems to be coming for you? Right. So, um I think how we keep our market share, well, is not all about being a monopoly, right? So, we don't want to be in a monopoly. We like to have a competition.

We like to see great um competition coming from different angles because, you know, there are different offerings that there should be be different options. You cannot call the stablecoin industry if there are no competitors, if there are no other players. When you are multiple players, you can have a louder voice with regulators, lawmakers to try and to explain the importance of of the technology that we collectively are creating. So, um I think it's important, I mean, the to understand the differentiation between the different stablecoins and the different usage and the different, let's say, uh product market fit and targets. Um I think with with Tether, we are, as you surely you you know and so, we are not big in DeFi.

We do really care about being the stablecoin for the last mile. So, we focus on the adoption in the real world. So, payments, remittances. Um we work We don't care about the usage of of USDT in Europe and the US. We don't think Europe and US are good market for us and in general for stablecoins.

That is our own opinion. Uh so, we devoted our energies to to focus on emerging markets, developing countries where there are 3 billion people that don't have bank accounts, not because they are bad people, but because they are left behind by the traditional banking system that uh considered these guys too um you know, too poor to be of their interest, too poor to to be able to milk them out of commissions. And so, we want to give to the these people these great people an opportunity to hold their checking account on their their smartphone. Simple as that. That is that is Tethering in 2 minutes.

Yeah. Um Martin, I I know um we talked earlier and you're very focused on emerging markets as well. It seems like you're very focused on some of the same use cases that Paolo just talked about as well. How do you think about growing your business in light of, you know, having this in large player at you know, at the same customers that you want to you want to reach? Yeah, so if you look at Tether markets, uh I think Tether is like the Bank of America, the JP Morgan of the like the checking account.

We want to be the Marcus by Goldman or like the high-yield checking account. So, if you are, in an emerging market, and you uh want your dollars to be on a very safe uh but like a decent return um asset, Mountain is going to be there for you. And aside from that, if you are a sophisticated investor, uh and you're looking to do things on crypto that are not 30, 40, 50% uh APYs, but are actually on the teens, using non-yielding stablecoins is quite prohibitive. So, we want to enable the the small guy that has a $100, that $5 a a year in interest is significant. And we want to enable the insurance player that wants to collateralize with USDM and anything in between uh as long as you do it uh on chain on crypto.

Yeah. Um Guy, so uh you obviously are very focused on DeFi uh with with your protocol. Um Paolo talked about DeFi. Do you see that as competitive? Are you going for the same market in DeFi?

And how do you, you know, want to respond to uh to what is happening across DeFi with USDT or USDC or others? Yeah, I actually think we're targeting very different markets. I think the market that Paolo mentioned in our presence within D5, it's really flexed around the economic return that the product is actually producing, which you obviously don't see with USDT to the same extent. I think the way that we view the world is that there's sort of three different stages or interesting markets for us to play in a niche, and we don't want to provide a product that's like everything to everyone. We want to actually be very focused around the type of users that's actually using Athena USD.

So, we see like D5 as the first step. It's typically where the the highest like risk appetite sort of sits to take on a new product with a very different looking sort of construction to to its backing. And then we actually think that like C5 is an underexplored area in general for like new types of stable like issuers. So, I think a lot of the on-chain stable coins that you've seen in the past, whether it's a Frax or a Dai, they sort of ignore C5 as a distribution channel. And every single like success story of stables, whether it's whether it's Tether or Circle with Coinbase, it's always an attachment between a stable asset and the distribution partner with C5.

So, for us that's sort of like the next leg once we feel like we've adequately sort of addressed the market that sits within D5. I think that that C5 is one of the most interesting areas to actually attack. Interesting. Okay. And Paolo, I I know you've had um some tweets recently that were maybe somewhat you know where you were concerned about you know other stable coins, or you were a little bit you know necessarily not happy with some of the ways some of the other stable coins were being kind of positioned.

Like what's your perspective on that relative in how people are competing relative to what you Tether's position today? Well, my position about stable coins is important that we categorize stable coins, right? So, why people need a stable coin is an important question, right? When you create a product, it's always important to understand who your who is your customer, who is your target, right? So, otherwise, you end up in in trying to sell ice to an Eskimo, right?

That is kind of um uh beside the point. So, with um with USDT, we always thought, you know, first we started in 2014 from the cryptocurrency industry, we were um the simple idea was helping the arbitrageur across the different trading venues. In 2014, there were just five four five six exchanges. Today, there are like 400. And so, these exchanges were uh in order to allow arbitrageurs to to settle transactions, um they needed, of course, to be able to move Bitcoin from one exchange to another, but also being able to move fiat one on one exchange to another.

And so, Tether came as a solution to solve that problem, ability to move fiat in the same way you move Bitcoin, so within 10 minutes, right? With the Bitcoin, you can move, you know, from one exchange to another in 10 minutes block time. So, when I when we see all the evolution, we have seen competition uh starting from 2018 coming into in into our industry or our space, we always welcome that. For example, I like what the the Paxos guys are doing. I think that they are offering a great product.

They are building a platform for allowing others to to issue stable coins, right? So, I think is a huge market. We are hearing about countries willing to issue CBDCs. So, there is so much potential. And also, I believe that with the US um economy printing around $1 trillion every 100 days, there is space for everyone.

And I think that, you know, I was critical, for example, with the Terra Luna. And when I did it in in uh in 2022, was uh February March, I I was critical about that. And of course, people were saying, "Oh, yeah, you are critical of of them just because they are going to eat your lunch." And well, because the the thing is with the with stable coins is all fun and games until you are small, but when you can become big, the liquidity, the risk management, everything changes. And so I think that's what we learn on our own skin, how we had to become really good in understanding risk management and and so on.

So I'm I'm really open and really glad that there are many competitors trying many different strategies. I just like to to that to as we receive a lot of scrutiny, I think is and I think it's fair is the scrutiny that Tether had is what made us grow, what make us extremely resilient. I really like it, you know, I really like to be pushed by by the community, by by everyone because it's I think it's the key of a successful Tether. But I think that is important that the rest of the industry now has the same type of scrutiny to not have another Terra Luna. Do you think we're going to have another Terra Luna?

I don't know. I hope not because if there is another Terra Luna with Terra Luna all regulators said, oh, stablecoins are a bad idea because Terra Luna. But that was not a stablecoin, right? So that's important, the labeling is important. So I think it's detrimental to everyone if there is a a new Terra Luna just because it will impair all the good work that everyone here is doing.

Got it. Okay. So Guy, you mentioned economic incentives. I know Nick, you've talked about this a lot as part of your business. Maybe Nick, you can talk bit about like why you think that's important as part of you know, stablecoin adoption and and going out to these different protocols or businesses.

Yeah, I I think the one of the most important things and qualities a stablecoin needs to have is it needs to be anti-cyclical and have a lot of liquidity, right? And a lot of these businesses throughout crypto, whether you're an exchange, custodian, dapp, trading firm, you're actually driving utility to that asset, right? And so I think it's actually important now that we share income with those businesses, right? Palo's built a fantastic business, Tether is visionaries. I think, you know, that's now attracted attention, right?

That they're making such significant margins. And I think some of these businesses are asking, you know, why am I not sharing in some of that income? And so, we're coming to them with a solution saying, we believe in having an open partnership model. Instead of just partnering with Coinbase or one person, we'll partner with all of you and share income based on the services that you provide to us and the utility that you're driving to our stable coin. And so, it's very specific services that each type of entity has to provide.

We think that's super compelling. And it's basically bringing back, you know, the 8 billion plus that was siphoned sort of out of crypto by uh USDC and Tether last year throughout crypto, right? And I think it makes crypto a lot stronger because they can hire that extra dev, they can pay more for marketing. You know, in some cases now they actually have a business model for the first time if you're a dapp, right? Uh and so, this has been resonating with a lot of people and we're excited to to come to market.

Um I do think I you know, I just want to say I do agree with a lot of what Palo said about what actually makes a stable coin a stable coin, right? Is it has to be one-to-one. I don't think uh interest-bearing stable coins are a thing. And so, you know, we're excited to come to market and I think shake things up a little bit. And Martine, how would you respond to that a little bit cuz I know you talked about interest-bearing.

We had a discussion yesterday where you uh basically said that you believe that stable coin businesses are going to become banks and there's going to be different tiers of collateral and capital and not necessarily one-to-one backed. Like, how would you respond to that? Uh I would say first I agree that uh everyone in the market today is thinking, how do I participate from the value I generate? And our approach is everyone should get the the same deal. In terms of how this is going to evolve, I think all of us are experimenting on how you actually build a a stable coin that maximizes maximizes customer value.

I think us three probably have a very similar collateral structure as as of today. Guy, you have a you have a a very different one, but I think over over time the three of us will also diverge. I I come from a banking background. I think when my grandma has USDT, she thinks of that as a bank deposit. She doesn't think of that as I hold a physical dollar or a deposit at the Federal Reserve.

And I think that tokenized bank deposit concept is going to be where a lot of stablecoins are going to evolve. And I think we're going to see what we see in TradFi banking, right? Like mortgage-backed securities, uh portfolios of commercial real estate, etc. build the portfolio of of of stablecoins in the future. It's very hard to do when you're small, but once you start scaling uh and you have of course the capital requirements in order to do so, I think that's where you can provide a lot more value to a portion of your users.

And in the end it's going to be a tension between what the regulators are going to be comfortable, which I think is going to very much resemble TradFi, with the the the value that you're going to be able to provide your users specifically around interest. And I think the interest game is going to be the thing that pushes people um to to actually become more like a bank deposit and less as a full reserve bank. Um because we don't see full reserve banks today in in TradFi. And I think if we roll the dice again, it's very unlikely that crypto evolves into a different thing that than what TradFi did. Paolo, how how would you respond to that?

You know, understanding that they're talking a lot about, you know, providing those economic incentives and that interest. And and today at least Tether does not do that. Yeah, so I receive a lot One of the questions that I receive on Twitter a lot is, "Well, when Tether airdrop?" So, the the thing Can we talk about that later when it's going to be? So, the thing with um sharing interest is tricky, right?

Because in many jurisdictions, uh sharing interest would make your product a financial product, so hence a security. We have already seen how aggressive um are certain regulators uh also going after important projects in our industry. So, um when I think about our market, and again, I go go always to the main point for whom you are building your product. Who is using your product? Tether today is used by 300 million people around the world.

More than that, but let's be conservative, that are living in emerging markets, developing countries. They have an urgent need that is saving themselves and their families from the insanely fast devaluation of their national currency. So, it means that when you are in that situation, right? You live in a country like Argentina. You work the entire year, and at the end of the year, you are poorer compared to the beginning of the year.

Just because you are saved if you are saving in Argentinian pesos, which devaluated 8 98% in 5 years compared to the dollar. So, this Imagine the intraday volatility of the Argentinian pesos is higher than the 4 5 6% yield you could provide them on an annual basis. So, for our user base, what we saw is that people are using USDT because it's simple, right? So, they need they is a simple tool they're going to have in their pocket. It solve an important problem they have.

The Argentinian um folks are sick and tired to be uh every 3 years, or sorry, every few years being by by their local economy. So, they they they choose us just or because they we were around, they find us as as ourselves easy to use. And that's it, right? Providing that extra 4 5% to them will not change it, but will change it for us. Not because we're greedy, because actually the vast majority of the profits that made that are made in the last year, they were around $6 billion are staying the company.

We are investing in great project in in great things for for the community, for our industry in in many different areas as well, in education and in in artificial intelligence infrastructure to open many avenues for for everyone actually. So, it's not that it's not about greediness, it's about not putting USDT in danger because if becomes a security, could be considered in danger for all the people in emerging markets that are using it. Got it. Okay. So, uh the you know, the three of you have talked a lot about economic incentives.

Paolo has talked a lot about his customer and who he's serving. You know, Guy, what do you think is the most important and how would you think about customer segmentation relative to the others as well? Yeah, I actually think um the economic incentive base isn't the most important. I think uh something that Paolo was actually alluding to is uh that small yield is actually small in the context of like what you can use a dollar for in crypto. So, uh I think it's it was a bit of a misnomer last cycle where people were pointing towards the huge pools of capital sitting within USDT and USDC and saying, "Why is that not going and capturing the risk-free rate in the real world?"

Well, part of the answer is that when crypto moves 5 to 10% a day on majors, you want your collateral there to be able to buy a dip and sort of sell a rebab afterwards. And so, in the context of an asset that's moving 5 to 10% in the day, people don't care that much about 5% return over a year. And so, I think it actually converges because most of like crypto is about speculation and trading, it all converges to liquidity. And I think that that's actually uh what what sort of uh Paolo and the team have actually achieved, which I sort of view as the holy grail, which is they've achieved like the status of money on centralized exchanges. And they have this huge moat around liquidity there where every single major pair and trading venue is all run with USDT.

Um so I think it's actually winning like a liquidity race is probably the most important piece. And then I think the um brand and reputation that you build up through multiple cycles where people can rely and trust that a dollar is actually a dollar. Uh I think that that's the second most important piece uh behind the liquidity one. So, I think economic incentives are important but definitely not the most important behind those two. So So I think about it a little bit is, you know, there's the four of you up here, there's Circle, there's PYUSD, there's, you know, a ton of others.

Um and part of this, you know, conversation around liquidity, clearly that's for the best user experience. But we are now also talking about economic incentives, which in many ways it had seemed to me to be more bootstrap uh TVL to grow your business versus growing the demand side. I don't know, Nick, how do you think about that? Or are you incentivizing demand in the long term to use you? Or is it more of a short-term like, "Hey, we'll give you a little bit of something so we can grow and raise capital on that."

Yeah. Our view is and I actually like agree with the lot of what Paolo said, right? Being natively yield-bearing does make you a security, right? That's why we're one to one. So we think the way that I view it is and there's This is a multi-sided network, right?

So it's not, you know, true about everything. But like dApps and these exchanges own their users, right? And my view is that if you effectively empower these businesses that control these users, right? And and give them almost the full P&L of what you're generating, they can make a decision that is ultimately best for their business, right? And their incentives are aligned with you.

And so ultimately what they could do is they could keep it for that business and then encourage users to use our stablecoin via a variety of means. They could take a spread and then use the remainder on user acquisition or use the entirety on user acquisition. And so the way that I think about it is we're, you know, effectively decentralizing all these businesses across crypto to make decisions that are best for their business, that drive value to our stablecoin. And so we're playing the a game. We want to have direct relationships with all of these businesses and help them grow, right?

And I think that's how we view it and and I kind of am coming to this informed by, you know, what's happened over financial markets and asset management over the last 100 years, right? Is that fees have compressed and I think ultimately that's where we go and that this is the end state. And so from our perspective, we'll go right to the bottom. We're working with one of the largest custodian banks in the world, you know, large established asset manager and use that as a wedge to drive adoption and liquidity so that, you know, if someone comes around in 2 years and says, "Hey, we'll do the same thing." Well, we already have the liquidity moat.

We've uh you know, built relationship with these business customers over time and and they trust us. But that said, I think there is still a place for multiple different one-to-one stables to exist and you're not all targeting the same markets. Um but that's how I think about it. It's not like a short-term game. You know, we'll never have a governance token.

So we're not paying users to hold us, right? We want to build long-term relationships that align with all these businesses. And so we think long-term. Got it. Um Martin, I'd I'd be interested, you know, Nick just mentioned, you know, uh yields coming down, right?

And if Treasury yields come down, it might be significantly harder to incentivize people to use USDM or, you know, even at these other products that are here. How would you think about in a world where yields are down to 2%, 3%, maybe even less that you would incentivize people to use USDM and to get that liquidity? So, I think there's a world in 2 3% that very much resembles 2017 when Goldman Sachs launched Marcus. They grew to 100 billion or so in a year. So, we actually started working in Mountain when rates were 1.

5%. We thought that was enough. Uh I think standing today, 1.5% looks like nothing, but standing on 1.5%, 1.

5% is pretty pretty interesting. I think the world of 0% interest rates, I see it very hard coming back. Um I don't know who's going to hold US government debt at like 25 pips or or something like that. Could happen, but I think it's very unlikely anytime soon. I mean, if my thought is if people are holding USDM just for the 1.

5 or 2% or 3% then they're actually holding it as a investment product and then not as a, you know, stable coin that they're going to use. So, how would you think about that? No, the the idea the whole idea of doing a stable coin is we want the utility of the stable coin to be what you do with a stable coin today, but have this additional yield by which you would rationally always choose us. Today, definitely we don't have the liquidity and integrations, but over time we hope that you're going to have the same utility and the delta rewards that we're going to be paying versus a utility with no rewards and it becomes a no-brainer to continue using us because from our risk perspective you're talking about the same or even a better quality asset So, it's a like in the end you need to build a utility. Um, and starting off of course you don't have any, so most of the holders are holding because of the pure rewards, but as you build the ecosystem that utility should be there and the delta utility between us and a tether should start to compress over time.

Got it. Okay. How would you think about that? Is it Is the utility going to compress over time, Paolo? So, what I think about when I think about the also the integration about all the stable coins that I think there could be I can see a future in which certain yield bearing stable coins could be used as a saving account and you would turn to um, stable coins that have more distribution, more foot on the ground like USDT, right?

So, for example, USDT now is uh been integrated in in tens of thousands of ATMs in Brazil, right? So, I I think it's almost impossible for for USDT to hold the 80% dominance, right? And I think is is not the point is we we are not interested in that. We are we were happy when also the interest rates were 10 basis points, right? So, now that they are 5%, I don't think that will come down um a lot soon, I think.

I think the inflation is here to stay for a long time. So, I think that we are we are going to enjoy it for a little bit longer. Um but um I think that the way I see it is that there will be uh a sort of a swapping mechanism across all the ecosystem to allow people to move from savings accounts and checking accounts, right? The point to me is that stable coins are the best representation of uh the classic traditional financial uh tools that people have in in their banking and in banking apps. So, checking checking account, saving account.

It's simple as that. And on a saving account, you might want to earn a yield because it's something it's money that you park there, you don't plan to use it for a long time. And the checking account is the one that you are ready to not earn a yield on. Today, in any banking app, it's that, right? Checking account, no yield.

Saving account, yield. So, I see eventually there could be a situation where uh apps uh wallets will abstract the concept of a of a dollar and will allow um multiple stable coins to be uh behind the scenes based on your liquidity necessities. They could swap between one another. But, you know, for I think what we built with Tether is uh is what makes us a little bit um in this moment uh not unique, but I think staying um a bit longer uh in in our position because it's all this integration that happened throughout the last 10 years, right? We are celebrating our 10 years anniversary is what make us stronger because um all the small shops, all the C decks that you can find.

If you go in Tbilisi in Georgia uh today, you go every 50 m, you have a BTC sign and a USDT sign, right? So, and and that is a common story in in many cities in in the emerging market. So, that is a bit harder to replicate, but I think you USDT could be actually the liquidity driver to all the other stable coins and you know, for me it is is a great story, right? So, how big do you think the market gets and how much market share do you think you have in that time, 10 years from now? Well, I hope to be still about 50%, but uh keep in mind that uh okay.

Well, but stablecoin industry could be 10 trillion dollars but by then. Yeah, okay. Uh all right. I would I would smirk at that. I think that's right.

So, if you look at the euro dollar market, it you know, it was over 15 trillion in unsecured offshore US dollar deposits in 2018. It's probably 20 trillion today. I think stablecoins eat that whole market and probably grow the pie. So, I think Paolo's actually on the Well, how would you react to his point about you Tether being the liquidity layer for your stablecoin? I don't think that's entirely incorrect.

I mean, I think they are the most liquid stable. They could continue to be, but even if let's say they become the second most liquid stable, they're still a liquidity layer for other stables, right? I think this is, you know, very much an interoperable ecosystem and their liquidity is going to be extremely challenging to surmount. I think to Paolo's point like they have a very deep network. Um and so, I think you know, there's room for a number of players.

Ultimately, I think this industry in 10 years looks like, you know, probably five to 10 folks owning 80 to 90% of the market share. Um and yeah, they they very well may still be the liquidity layer. And just to say, if we are becoming the second, the third, the fourth, fifth biggest stablecoins, we don't care, right? So, we are happy. We are being we are going to keep on smiling.

Who cares? I mean, it's just we like what we're doing. We had We are building many products in in in Tether. So, it's just we are here for for because we just enjoy uh the run. Guy, so you know, the the three of them are talking about a little bit of different market than you were talking about earlier.

How big do you think the market for what you're doing in your product gets? Or do you believe that it also converges over time? Yeah, I think uh for all intensive purposes, like that product are infinitely scalable. So, you can put as many TUSDs into into a stablecoin as you want. Uh it's really more of a demand side equation, I think, that actually is the the constraint there.

Um with us, it looks a bit different because we do need to tap into the derivative markets around crypto, which uh are large and growing uh every cycle. Uh so, just for reference, at the moment, there's around 35 billion dollars of open interest within crypto-native venues uh to actually use um uh within the product design for Athena. Uh I don't think we could be safely operating like above, call it, 30 to 40% of the entire market. So, I think somewhere in the order of 10 billion dollars is a natural ceiling for what Athena is doing at the moment. I would uh just point to what we saw last cycle as a pretty interesting data point, which is uh the derivative market actually grows quicker than market caps themselves.

So, every time the market caps double, uh you see derivatives actually grow somewhere between two 2.3 to 2.5x. And so, these markets are growing through time. Uh we'll never be able to be as big as Tether, but uh I think in the in the same sort of view that that Paolo sort of shared there, uh we're okay not being the biggest.

We think that there's a very interesting opportunity that sort of sits between where we are today and something that's in the region of 10 billion dollars. Yeah. So, so you've grown dramatically over the last, you know, 2 3 months. Um now, over 2.35 billion dollars or or 2.

37, I think, right before we came on. Um which you confirmed with me. Um but so, you know, so, if you think you can only get to 10, have you done most of your growth in the first few months? Or do you need to pivot and do something else? Yeah, it's an interesting question.

Like I say 10 given the market as it exists today, right? So, if BTC and ETH double in the next few months or year or whatever it is, the market size more than doubles for us to actually move into. We do always have the option to think about the construction that sits behind Athena and whether actually just a pure synthetic long on one side, short on the other with derivatives is the full backing for Athena. So, there might be a scenario in which you sort of captured enough share and actually think that introducing a product that looks a bit more similar to these guys as part of that backing is something that you want to do at some point in the cycle. So, I wouldn't sort of like cross that out entirely.

It is something that sits there but not sort of like on the focus at the moment. So, Paolo, you have a you know, a few different you've talked about having a euro product or you do have a euro product, I believe, right? But it's relatively low TVL, especially compared to the the US dollar product. Do you think people will ever actually going to care about a euro product or a non-US dollar stablecoin product? So, over time we tried with well, we started with the dollar stablecoin, then we tried with the euro stablecoin, then it came the gold stablecoin, Mexican pesos and Chinese yuan offshore.

Tether gold is having a bit of traction and now is around 600 million dollars. But in 2018 we launched our euro stablecoin. And today is around 40 million euro market cap. So, compared to USDT is is is a drop in the ocean. So, the reason is that if you think about it again, let's let's go through the process again.

Who needs a stablecoin? And especially and also think about who needs the euro, wants to use the euro. Because if you go, you know that the dollar has the US dollar has more than 60% actually almost 70% of the global economy when it comes to settlements, when it comes to trade fine, when it comes to commodity trading, right? 60-70% is all US dollar. So, means that if you go outside the US, you will always find someone, especially emerging markets, developing countries, everyone is really happy to hold the dollar.

Try to go outside of Europe and ask if anyone wants to hold the Euro. No one cares, right? No one wants to hold one single Euro. That's that's it, right? The it's the usage of Euro outside Europe doesn't make any sense.

So, you would expect that the a Euro stable coin would thrive inside Europe inside Europe. But, the issue there is that no one in Europe needs a stable coin. People in Europe has have two bank accounts for the vast majority of course, but have two bank accounts. They have banking apps. They are they have two two debit cards, credit cards.

They are completely happy with their banking rails and financial rails. So, again, there is no when I said it loud, right? There is no interest in my opinion and from what we see from all the data we gather of the usage of stable coins inside Europe and inside the US, but there is a huge argument over a US dollar stable coin just because everyone outside the US wants the dollar. Yeah. Okay.

So, we only have 3 minutes left. So, I want everyone to give me their most controversial take on the stable coin market. I'll start with you, Martin. I think 10 years from now there's not going to be a fully reserved stable coin. I think they're all going to move to banking deposits and except for a couple of stable coin nerds, no one is going to know about it.

Uh don't know how spicy the take this is, but my view is that interest bearing stable coins don't exist. They're treasury funds. They have no margin to drive liquidity and utility like a digital dollar. Um so I think in 10 years, yeah, they're all the term yield bearing stable won't even exist. It'll just be a treasury fund.

Okay. Paolo? I think in 10 years, the stable coin industry will be either $0 or 10 trillion. Okay, and why is that? Why will it be What are the Why would it be zero?

Well, because um we'll see if uh the old guards of traditional finance will make it to trying to dismantle the incredible industry that we're building. I don't think it will happen, just to be clear, but I you know, it's like saying Bitcoin could be in 10 years either zero or can be you know, one, two, three million dollars worth. So, I there are non-zero chances that they're going to happen. I believe that what we build in the stable coin industry is there is here to stay and is here to prove to the entire financial industry that you can do things without milking everyone till the last drop. Okay.

Guy? Yeah, I don't have the foresight to look out 10 years, but I think in the next um one to two to three years, uh I actually disagree with Paolo's view on his own product. I actually think Tether is going to have more market share than it does now. And 80%? Thank you.

Correct. And I think Did he pay you before this? What's that? Did he pay you before this to say that? Tether.

Yeah. Um uh And I think the reason for that is actually um what we're coming on as like new entrants to the market, and the segment that we're actually attacking, and why I see new entrants coming in the future, is actually more targeted on areas that actually USDC exists right now. And so I think that there is a loss of market share in the second place within stables. Uh and actually like the liquidity and moat that sort of palace will run to the continues to actually like dominate going forward in the next few years. Okay.

All right. Well, uh, I will leave it at that. Uh, not as controversial as I hoped, but controversial enough. So, um, thank you great panelists for awesome discussion. Thank you, both.

Thank you.