Amazing. Thank you so much. Thanks for being here. Uh today I want to talk a bit about accelerated FX and why onchain and web 3 um and blockchain is the perfect technology actually for for uh FX and FX trading. In the end um FX is also a really really interesting market.
Before in other panels we had heard already about uh credit for example credit uh in terms of size is the second largest market in the world and then uh FX market in terms of trading volume is by far the largest market in the world. Um the bank for international settlements estimates around $7.5 trillion volume every day in the foreign foreign exchange market. So if we only get a fraction of this on chain, uh onchain would actually be really really really useful. Um but actually this technology is also useful uh for this market and this market can actually uh benefit from the technology and that's what I want to talk a bit about today.
Mentor is an onchain FX platform. Um check us out. Mento already has 15 different currencies live. uh all the G7 currencies from Japanese yen to euro to dollar and then more exotic currencies including Kenyon shilling, Philippine peso and so on. Um but uh the most important part of Mento is it allows users to swap at the FX rate and we are also integrating many other stable coins from other stable coin providers.
Um the challenges of the FX market in the end are for example high barriers to entry. Um not everyone can access the FX market everywhere. So if you're for example in Kenya and you're doing business with Ghana, it's really hard to go from a Kenyan shilling to a Ghanaian city because there's no direct market between these so good currencies. You have to go actually via the dollar. And in the traditional FX market, it also doesn't work 24/7, which is ridiculous.
It's the largest market in the world and doesn't work 24/7. And the settlement times typically are super long. So if you have a T plus2 settlement and you need to go from a Kenyan shilling first to the dollar and then to a Ghana and Sadi, you're already at 4 days except there's a holiday or weekend in between. So it's actually really long. Um also in DeFi infrastructure is not ready yet for the for institutional FX markets.
AMMs are not built for mirroring off-chain prices. Um the price of euro in dollars or the yen in British pound is determined in the interbanking market is determined offchain. In an AMM the price is determined via the ratio between two assets in two pools. Therefore, basically to get the price of an AMM to the offchain FX price, there has to be a lot of uh arbitrage trading so that these two match and therefore in the end onchain infrastructure is not ready yet for for bringing actually FX on chain and this is something we uh we we are building for to to improve this. Um this is maybe also the reason why local currencies on chain are seeing low adoption so far.
there's not like very efficient markets for a Kenyon chilling onchain. There's not a lot of efficient markets for uh Japanese yen um on chain as well. Um we're trying to unlock the power of onchain FX by building infrastructure directly for that and building open infrastructure where we actually can integrate any other stable coin um as well in that infrastructure by allowing users to exchange at the ex uh FX rate. Um we're building on the EVM. Um we are building basically um that you can access these markets around the clock, that you can access these markets in a permissionless way if you need to.
Um that you actually can use the same infrastructure for FX trading no matter where you are in the world. Um that is the beauty of of blockchain technology and therefore we think it's it's actually a perfect match um to use blockchain um to bring FX trading onchain and I mentioned it before um FX is the largest market in the world. Um 30% of that $7.5 trillion trading volume is actually uh spot market volume. uh 30% of that spot market volume is uh actually non-bank and non-financial institution volume.
These are actually these actors that for example having a business in Kenya and want to do business with Ghana and can't find basically a uh a bank that that offers them a direct link between the two currencies and this is exactly I would say the um obtainable or addressable obtainable market that we are after basically bringing infrastructure on chain that these trades can happen um on chain 24/7 with instance and settlement at low low prices. Um, compared to basically what already exists, there is like first projects that work in the FX infrastructure space in the market. There's also a lot of different stable coins already live. What we want to bring in the end to market is um or what we already bringing to market and what is already live is in the end the combination between this FX infrastructure that allows users to swap at the exchange rate and access to many different currencies. um the mentor currencies that include all these 15 uh G7 and nonG7 currencies and we are also integrating many others like USDT, USDC because they just have so high liquidity that users also want to get access to them.
With this, we not only can actually allow for more efficient FX trading. With this, we not only can allow, for example, a market maker that makes a book in Bitcoin to Japanese yen to offset their Japanese yen exposure on chain. With this, we can actually unlock many other use cases that we are really excited about. And many of these use cases have been discussed today before. I mean we've talked here on this stage already about crossber payments remittances um but there's also hedging FX hedging derivatives there's local currency borrowing lending if you think about these entrepreneurs in Kenya that actually they have a preference to get a loan in their local currency because when you are an entrepreneur your revenues are in local currency so you have to pay back that loan in the same currency otherwise you hold the FX risk so microl lending for example is also an interesting market for these local currency use cases international and then of course international trade financing everything that that comes with it um is is a perfect use case for that as well.
We dive deeper into all of this in the next panel. So uh we can talk more about and then maybe also go into a few more questions on FX. This was just a primer. Um we are working on on Mento and want to bring FX trading onchain um for the whole ecosystem. Um so feel free to check us out.
That's my seven minutes. Thank you very much and
Automatic transcript — names and jargon may be misspelled.