PANEL: Dragonfly, Valora, El Dorado, Celo Foundation - Stablecoins in Emerging Economies

all right thank you Thomas now congrats guys you made it to the last session of the unstable Summit um we are closing with a panel uh stable coins in emerging economies everyday utility Financial access and overcoming adoption barriers with speakers Rob hadik uh General partner at dragonfly we have Jackie Bona CEO from valora we have guo gonalez uh from El Dorado and Michael Quan from cell foundation with our moderator zavier [Applause] Gomez hi there thank you everyone I think it's uh the last one and one of the most interesting uh [Music] panel thank you to stay uh I think uh it's it's an amazing period at the moment for for crypto industry and and blockchain with a whole last news Trump election uh the um availability of some ETF at the beginning of this year and uh now uh the big subject in particular in in Europe This is a stable coin but what is the impact of a stable coin on emerging market today it will be our panel and I have the chance uh to have on on floor uh uh for interesting uh people uh as I mentioned uh I let I let us to introduce yourself and uh uh to say some some words about uh the subject Rob please could you introduce you sure um so I'm Rob hadock uh I'm a general partner at dragonfly crypto Venture fund if you don't know it's about 3 billion under management uh invest globally um specifically in stable coins and Emerging Markets we've been investing since 2017 started all the way back and people remember things like mobile money mobile coin um uh recently it's been u a big focus of us the last couple of years made a number of different Investments both on the centralized and decentralized side um really happy to be here and you know standing between you and and drinks so sorry about that but uh hopefully it'll be a good good conversation thank you Rob guo please hi everyone I'm GMO I'm the founder and CEO of El Dorado one of the leading peer-to-peer exchanges in Latin America um I'm originally from Venezuela and I'm I've experienced hyperinflation in first person for many many years so I'm now really glad to lead uh one of the fastest growing stable coin companies in the region and excited to share more insights into how people are using stable coins to fight inflation send and receive remittances and and many more use cases thank you g Jackie please hi everyone my name is Jackie Bona I'm the CEO of aora or a mobile only wallet focused on Emerging Markets uh we also build a platform called mobile stack where we can essentially enable any web 3 company to build their own native mobile app and a big part of emerging markets and the thesis that we have is not only stable coins but actually mobile um most people around the world have mobile their mobile phones as their primary device and their only device of accessing the internet and so um basically want to make sure that we can provide that accessibility and that usability through mobile phones and also stable coins and so excited to share a little bit more about what we're working on and and what we've been seeing in these uh markets thank you Jackie Michael everyone thanks uh for this opportunity excited to be uh part of the last panel gatekeeping you all from the the dinner um hey everyone my name is Michael I lead strategic initiatives at C for uh folks who don't know C cell is a uh evm compatible mobile first L1 blockchain very soon to be an L2 on ethereum focused on real world use cases and uh facilitating low cost and fast payments worldwide uh on top of my role at cell I also am a steward at Stabila Stabila is a community funded entity uh F funded initiative on Cell focused on stable coin adoption and growth um cell as of lately has been really positioning itself as the home of stable coins we have 13 native stable coins launched on sell so far we have your USD stable coins like your usdt and usdc we also have our non-usd stable coins as well as well examples being Mento stable assets that track the Brazilian real Kenyon Chillin West African Frank and so much more so uh yeah Stabila Foundation has been very much focused on working with C insurers to launch and go to market on cello and for the ones that are on cello really creating more traction and stable coin use cases thank you Michael and myself my name is Xavier Gomez I'm former veteran of Trad F uh I move on the dark side of uh entrepreneurship on the fintech and I am co-founder of mup mup is a crushen aggregator based in in Europe for um swap of token and multi token thank you everybody uh for the the the introduction the idea of this panel is to give some uh some uh tips and Trend regarding this uh uh this interesting subject St in imaging economy we will try to explore more less practical application of stable coin in everyday payments also the cultural technology and the financial buyer and clearly also identifying Necessary Technology and financial infrastructure uh let's start with the first question um more focus on remittances um you know the the expanding of stable coin use cases um my first question will be um more or less uh why remittances have been significant driver of stable coin adoption in Emerging Market what Everyday Use cases do you envision for stable coins yeah maybe I can start from from what we've seen from the investing side um so yeah remittances were obviously the first use case people talked about it was you know the corridors between the US and Mexico us and Africa you started to see people um utilize that for for the last couple of years but when we've seen kind of this this kind of J curve pick up this year with a lot of these um you know a lot of these like corporate uh Enterprise style companies like bridge and bvnk and Etc and the Big Driver of that has been almost entirely payouts so um contractors who are you know uh working for a global organization in parts of the world like Latin America Africa southeast Asia who one they are you know digitally native they want US dollar stable coins they understand how to take them they may want to keep them they might not even want it to go into Fiat and locally but two they um they just kind of they they look for a um they're they're nomadic and they look for you know work that you know can theoretically change from week to week and so they work for these different different companies Etc so deal for instance is doing the V almost all of their payouts right now in stable coins uh we see the same thing with um a number of these other kind of uh you know payout and payroll type companies someone who want to add something sure uh in the case of Latin America the the average uh cost of a remittance is about 7% so imagine someone uh working in the US and having to send money to to their families in El Salvador and having to pay like nearly 10% just to get their remittance to their to their families so that's a huge uh issue for for many of this uh workers that in many cases are um in informal workers so um and and there are many other issues like the the time to get that remittance to to your family and uh um the even even the the the payment methods and and the the whole process Associated to to this is is not as efficient as it could be and when we look at internal remittances within Latin America it's it gets even more complicated because uh you don't have uh interoperable systems so something that we're doing very very cool at El Dorado is that because we have a peer-to-peer marketplace where we connect uh local mobile payments with a stable coins we're able to bridge money basically between jurisdictions by basically having pools of liquidity from USD or usdc in Colombia and and USD and usdc in Venezuela so that way you get a a remittance that can take up to two or three days you can make it instant and uh at a basically at a tenth of the cost of an usual Western Union uh payment and Jai what about uh your opinion about that because you are us uh companies uh with more or less uh broad um uh uh BR uh in foreign operations so you you see some some linked with what's gu and uh and herid yeah I mean I think for us at Vora we when we first started working on the app and and we you know first SP out the company remittances and This Global venmo Vision was actually kind of the original remit that we had um we're a US company but we're you know self custodial wallet so know used in in many different countries uh internationally and the thing that we noticed is that in order for this kind of remittance and This Global venmo use case to happen on chain you need to have great on andof ramps and also you need to build the trust right with people that are new to crypto and so we really started to focus on that as like you know how do we partner with the right Partners whether they're you know kind of the bigger players like a moonpay or a ramp but also local providers that could actually provide that great user experience on the ground and so we started to see a lot more you know uh effect and traction from that I think the other thing too is that um in order to be able to have that you know remittance use case you also need people to actually hold the stable coin and so what we've actually noticed is that um this easy access to us denominated stable coins specifically in Emerging Markets uh the ability to actually hold and save and then taking it a step further by being able to earn easily on it is actually something that we've been uh mostly investing in uh as of now and I think like once we lay down that groundwork for being able to hold and uh make stable coins productive you know that F will of being able to you know send to friends and family but also to have payouts from a um you know basically from an international worker perspective um we we definitely see the demand from that you mentioned an interesting point uh in your foreign operation um it's not a challenge to find the right partner locally in term of Technology it can be it depends I mean I think that there's hubs right like uh for example Nigeria there was a lot of really great Builders and on andof ramp Partners specifically in the cello ecosystem that we' had been working with um that provided those really good local on andof ramps that provided a more seamless uh user experience you know to be able to connect to local banks and to actually be able to you know provide these types of uh these types of solutions for for local people um those worked much better than kind of the big local local players uh primarily because they were actually working on the ground with uh with institutions uh locally yeah just to add on Jackie just as an example I think s on the aspect of like on on sell ecosystem in Kenya for instance we have like prum Finance which has been a good bridge for folks like able to just hold stable coin stable coins in their wallet but at times when they want to spend they could use prium Finance which plugs into uh empa in Kenya and just send the stable coin a preum finance and they will pay that mobile money payment for their groceries bills Uber rides Etc and then you know anything remaining still stays uh in their stable coin wallet yeah maybe just I think we all talk about kind of consumer use cases and I think that's actually been the theme for at least the the talks that I've talked about but you know I have this thesis and I think I'm broadly starting to see it which is that any sort of like crossb payment so whether that's trade Finance I mean tether talked about this um you know a week ago or earlier this week about doing some trade Finance deal but you know we've been seeing that in a lot of different platforms over over this past year but anything that is cross border that has to move across traditional payment networks and utilizes like correspondent banking like all of that's being upended right right now by stable coins by alternative payment networks more broadly and I would expect that uh stable coins they end up taking over all of those types of you know kind of underserved markets whether consumer or business Rob I have a question for you uh do you consider stable coin business more secure from investment perspective you know so more secure in what sense in the sense in comparison with a token project or even trade fight right now it's uh Peg stable coin is Peg to something you can thinks it's more secure than other one in term of uh investment perspective as a VC yeah so I think it's just it's about use case right and it's about what people are um what we're trying to get out of it what the people who uh the the protocol or the business is trying to serve I I don't know if there's one more secure than the other um in that language but what I would say is like we're invested across the the decentralized and centralized side you know I think they are they do serve different use cases like you know maybe this isn't the Right audience for this but I am you know somewhat bearish on like a decentralized stable coin ever being used for institutional you know payments right um I'm much more I expect that to be a centralized stable coin um not necessarily what we have today and tether in circle but but maybe others um but there are a lot of use cases around you know decentralized issuance and um theoretically around um you know uh you know Define native stable coins where there can be economies built around them those economies are just different now I think for you know there was a a panel before us about payments like for that use case I expect that to be very institutional I expect that to be you know have kind of one to one US dollar you know backing Etc and I see worlds in which both do incredibly well for different audiences and different use cases and so we look at all of those things okay clear thank you in order to to be K the idea of my question was uh um as you know me many Emerging Market still faces to significant technological urles in comparison with us in in Europe and uh stable coin is more secure for people uh in comparison with local currency and after um to to invest in in interesting uh project maybe uh it's more uh interesting to uh to invest in stab project uh than any token or well I love investing in stable coin so we we do a lot of that and I do a lot of that personally and so uh definitely agree with that thank you and uh as I mentioned with uh some uh urle for uh Emerging Market in term of Technology um how can we ensure that stab cons Solutions uh are accessible to individuals with uh limited internet connectivity for example because it's a even a challenge in uh Western countries but uh I can image in Emerging Market yeah I I mean you can take that yeah yeah I mean I think at cell we take the approach where we try to not you know we try to be skoric and not introduce like a you know a crazy new ux so we try to partner with like web two companies and meet users where they're at so a good example is we partner with the oper browser they have like 100 million monthly average users in Africa and they are like op the Opera Mini browser in particular is like a lightweight wallet 2 megabytes and within that wallet we have embedded a stable coin wallet that is that is powered by cellos so essentially people who are browsing the internet can also send and receive uh USD usdc stable coins um you know just in their like kind of day-to-day habit and there's like a couple of other like extracted like layers on top of that to make it just like way where they don't even know it's like stable coins involved um like the wallet's actually tied to a phone number so you can send receive to your uh to your folks um stable coins is paid in gas like in the back end and you actually see the balance in like your Kenyon Shilling or naira Etc and so you don't see it as like stable coin balances yeah just definitely echoing like meeting users where they're at um I had mentioned earlier in my introduction that you know mobile is really the thesis that we've had both for Vora but also s um that's primarily because everyone has a mobile phone more people have mobile phones in bank accounts and so I mean you know not introducing anything crazy but web 3 should be building for mobile and I think that's that's one of the biggest opportunities that we see is that um you know well yes there are wallets there that are built uh on mobile uh many daps are not and so you still have to connect you know via a wallet or you know do something on desktop what if you could have every dap that you use uh every you know stable coin application Etc be natively on mobile have a smooth user experience and I think like those are things that can really help unlock adoption in Emerging Markets by really meeting users where they're at which is their mobile phones yeah maybe I'll um take the moment to shill a portfolio company really quickly but um you know I I agree with the point around like you have to meet users where they're at like we what we don't want to be doing as an industry is is maybe we do want to do this but it's really hard to get to invent the way users are already engaging with their phones and with financial services Etc we want to provide them a better experience but um if you just kind of say Hey listen here's all this friction and do this new thing like nobody fur than the mass Market will come to you and so you know one of the um you know a company of ours that we invested in recently is is called zarpe and they're very focused on cash economies and how do we bring people who have cash who otherwise would be putting it under their uh mattress or whatever else who aren't actually usually investing this and how do we um get them to give that to some sort of like mobile money agent or you know um the way they top up their phones and um local uh local like groceries Etc and give them a very easy to use wallet and maybe even give them a a mobile phone with that wallet pre-installed that then they put the the the money on directly and subsidize that through you know Venture dollars but um that like things like that and ways that creative ways to try to meet people where they're at already I think is something that we need to be doing as an industry versus trying to make them reinvest the way they act today yeah yeah I believe that's totally point I I actually this is a little bit controversial for for many here in this room but I'm quite bearish on this premise of pay let's pay coffee with usdc I mean I understand why we're doing this as an industry but I I haven't I haven't met anyone who has organically like gone and and pay like coffee with usdc but the the the point here is that uh stable coins are really the backbone of this uh infrastructure that we're we're building and if we have already a massive um a massive infrastructure of uh payments built in places like Latin America with realtime payment systems like peaks in Brazil or marato Pago in Argentina and many others what you what you want is a system that automatically connects you with all of this established uh real-time payment systems and this is one of the things that we're doing very well at at delor like being connected we are currently connected with over 70 of this realtime Payment Systems all across Latin Americans whether it's mobile money or cash agents or uh banking transfers and this is where the the real on and off ramps uh come come to place and and this is how people people are actually on boarding into crypto and and in many cases these people are using usdt without even knowing that this is crypto like we have asked them in surveys like do you use USD yes do you use crypto no and I don't see any problem with this like we are supposed to build uh things that abstract complexities and and this is part of the solution we're building and do you consider this is your mission in fact to provide this technology to the people Beyond usdc usdt as you mentioned absolutely I couldn't care less about the the the brand of the stable coin or or anything like what people I care about providing useful uh tools to people uh for their daily life uh needs and and if it happens that us is the most most liquid one and the the one with the most Network effects then of course we're going to support the usdt so it's very easy for us yeah very interesting um G you you mentioned U you focus and you mention interesting point in Latin America Market uh you mentioned the difference between each countries um I think this is the same in emerging economies uh we have have a different uh uh cultural difference and language barrier can hinder a adoption of stable coin um this is not the same thing in Africa in laam or in other in Asia in in particular in Asia you have a different level of adoption uh how can we tell our stable Solutions uh to the specific needs and preference of different regions have you got an opinion on that yeah I mean it really depends because uh I think that over time most of the stable coins will be abstracted away and uh it will come down to who has the best exchange rates people in Latin America are pretty susceptible to the exchange rate so the one that is most liquid and the one with the most on and off RS it us it will usually have uh better exchange rates and that is fairly important but now we're also considering things like yield bearing stable coins like we launch uh as of recently usdm on on El Dorado or very first yield bearing stable coin and it's very cool because we see people like for the very first time in in Latin America earning money in stable coins in very very low amount so you can uh buy usdm and get I indirect exposure to treasury bills in the in the United States uh with $10 or $20 and you and you receive daily payments on your balance so this is this might be like a like a normal concept for for all of us in this room but but this is truly revolutionary like this is why I'm building in stable coins and and I believe that that's one of the things that excites me the most how can we build like a stable coin powered products that mimic some of the best parts of the traditional Financial system but bringing that to the masses by tokenizing these assets uh and by making them available and uh not not only for for everyone uh but also with all the ramps necessary to actually provide an endtoend solution to go directly from peaks in Brazil to usdm in in a couple of steps okay Michael do you want to add something I mean I think uh like at in terms of like uh catering into like the the local market I mean I think it's all about like education and getting on the grounds there to really understand the customers needs um like how I'm show mini pay a little bit but how they did it was a kind of a form of you know there's learn and earn campaigns to educate users of you know the use benefits and risks of stable coins but they also had thousands of ambassadors on the grounds in Africa running workshops you know that you know they could actually provide tangible and like anecdotal like I guess evidence but also just stories like how they're using stable coins in day-to-day life so I think they kind of some people have to like see it to actually you know use it thank you and uh regarding the the role of um of fintech uh in driving stab cone adoption uh how can they leverage their expertise and network to accelerate the adoption of stable coins because most of fintech are Neo Bank payment remittances as we mentioned before and finally stab coin is a kind of new tool to make something hold opinion on it we don't do anything with fintex to date but I do believe that it would complete the value chain cuz I think like you know I mentioned before that on and off ramps has been a big thing in terms of you know hindering adoption for especially people that are new to crypto they want to be able to you know get their money in and out um if we were able to you know kind of partner more with fintex to be able to actually have that liquidity um to be able to connect that value chain around use a blockchain to basically move money globally but in terms of actually using something locally use a fintech and so I think that that's a really big opportunity there that um only a few I guess companies have been able to tap into uh one that comes to mind is like light spark a new bank I think that's like one partnership where they're able to do basically use lightning network from a payments perspective but then have a big partner like new bank in Brazil um from a fintech perspective I mean this is all a distribution game right like that that's what the uh issuers themselves are not going to be the ones to drive distribution like it has to be whoever already owns the end users and in most cases that's like a hyperlocal finex or you know financial institutions so um you know in Argentina it's lemon cash and and others like it right and who already have a lot of people that you know are coming to the platform it's you know or it's a new bank or it's a revolute or it's you know chime right like these types of people already have millions and millions of customers and like you're not going to Market with like a new like oh stable coin Bank like it's really hard it's a knife fight right and actually launching something that has you know piecing together an on and off rant plus a non-custodial wallet plus some sort of issuer underneath like that's actually not that hard to do today it's like pretty easy and there's no real Mo there because the moat is just distribution and it's going to Market and so like in my mind like getting um you know stable coins into these existing um you know these existing wallets these existing platforms that already have the users like that's the way we're going to grow the consumer use case you should follow elor on Tik Tok then in term of user experience and um interface design uh the idea is is uh making stable coin U accessible to to to all clearly and uh Michael you talk about um education but you can add education and also intuitive and accessible um interface uh how can we design