The Stablecoin Development Forum – Fintech Live London

TRANSCRIPT

Moderator:
Now let’s crack on with the panel discussion the stablecoin development forum. So thank you panelists for joining us this morning. I’m just going to sort of give the names, and then I’m going to ask you No in fact, why don’t you introduce yourselves? It’s much easier. Can we get along the panel. Say who you are, where you’re from, and what you did,

Kristen Reichel (Rapyd):
sounds good. So we can test the microphone if it’s working. My name is Kristen Reichel. I work for a company called Rapyd. Rapiy is a global fintech. We provide card acquiring services, card issuing we have a payout platform. We have a wallet infrastructure. So all kinds of sort of FinTech infrastructure. I run a team called solutions and partner marketing. So basically what that means I help product folks like these guys up here and BD folks kind of bring their products to market. So that’s sort of my primary, primary role at Rapyd, it’s great to be here.

John McNair (WorldPay):
Hi everyone. John McNair, head of payouts and marketplaces at WorldPay. Well pay one of the largest payments companies in the world. Most people know us for accepting payments on behalf of customers, but we also have a very scaled payout business as well, processing more than 200 billion a year on behalf of our customers as it relates to stablecoins. Well, pays. Really done three things in 2022 we announced that we would help our customers to settle acquired transactions in USDC. We did that in partnership with with fire blocks on the end here and and circle. We also did a proof of concept with Visa, where we facilitated an end to end car acquiring transaction in USDC. And earlier this year, we announced our intention to launch USDC payouts on behalf of our customers, in partnership with again, fire blocks, and also, this time with bvnk. So we’re kind of part of the mainstream, you know, traditional finance, adoption of of stablecoins. We’ve been supporting the crypto industry for a long time. I think we signed up Coinbase in around 2016 as an acquiring customer. We’ve been following this space extremely closely for the rest of the intervening period, and are really excited to have this conversation today. Thank you.

Prakash Venkatrakash (Flywire):
Prakash, so my name is venkatrakash. I’m a Senior Director of payments at flywear. Flywear has essentially four main businesses, education payments being one of them, the largest we are also into the travel space, B to B and healthcare. These are the four major verticals that we handle. We move money cross border, domestic. We are essentially a software and payments company. We are seeing early signs of integrating, or, you know, infrastructure building within the company for stablecoins, we’ve moved close to about $25 billion and when you know, you all know, when money moves across borders, there is, there is friction, friction in outward and inward. So we’re trying to solve for that friction, looking forward to this conversation, actually.

John Hallahan (Fireblocks):
And John Hallahan worked for a company called fireblocks. Fireblocks is kind of the leading digital asset infrastructure provider in the space. We support two and a half 1000 companies and essentially custodying, issuing or transferring digital assets. What’s that actually look like in practice? If you’ve ever bought crypto in the Revolut app, that’s our infrastructure in the background. If you’re a customer of BNY Mellon, it’s our infrastructure providing their institutional custody. When you look at stablecoins, we process in the region of two and a half trillion in stablecoins per year. It represents around 10 to 15% of all flows in USDC and usdt. So we’re a large provider in the space, and we essentially support all the major use cases for stablecoins, whether you’re issuing a stablecoin like a banking circle or bank Columbia, whether you’re providing kind of cross border, or on ramp, off ramp, services like bridge, or whether you’re essentially delivering stablecoins to your customers, like WorldPay, we’re supporting that from an infrastructure perspective, so hoping to bring some of that insight today and looking forward to a good discussion.

Moderator:
Great. Thank you. Panel. Well, can we set the scene? Data and statistics can be banded all over the place, so I’m relying on some numbers from JP Morgan, who last month said, Well, as we know, stable corn has coin has exploded in use this year, the past 18 months. Apparently, the market today is worth 225 trillion US dollars, predicted to treble by 2028 to about 750 trillion plus. So from your different perspectives, what has driven that vast explosion in the past 18 months and what will drive us to at least trebling the market the next three years? I don’t know who wants to pick up first. I’m happy.

Kristen Reichel:
You know. Thank you. Dive in. Um. I think, I think it’s always good to kind of look at how we got here, right? And that kind of gives us information on how we’re going to move forward. So, I mean, a couple big things stand out. Obviously, a lot of research in the 90s. But then, you know, the invention of blockchain, right? Like that was the moment, invention of Bitcoin. But then moving forward, you know, there’s sort of this web three Dotto, the distributed internet and Ethereum two Dotto, and blockchain two Dotto, and that basically reinvented, or seriously enhanced, you know, this, this blockchain concept, and Ethereum basically launched an entire infrastructure that anyone could build on and introduce the idea of a smart contract. And by having a smart contract, it kind of builds in the integrity of the system so people can believe in it and trust it. So I think that kind of led us to where we are today, and I think a few moments in time will really spring us forward, including regulation. I think you have to look to the regulation, the regulators, they have to create, you know, the confines for all of us to stay safe and execute effectively. I think the genius act, honestly, whether you love it or hate it, I think all of us probably like it because it supports stablecoin use that, in my mind, was the tipping point for stablecoin adoption globally moving forward, you know, I think we’ll just continue to see advancements in blockchain technology. Solano is a great example there. And I think another area that sort of propel us forward is sort of these partnerships. You know, we have all these amazing, you know, fintechs out there starting to work together, announcing partnerships every single week. So I think, I think there’s all these factors combined are really kind of projecting stablecoins forward.

John McNair:
Thank you. I think, I think historically or stablecoins being used for by sort of crypto traders trading in and out of crypto assets. I think we saw it as a an inflation hedge, you know, places like Argentina, people wanting to hold on to a US, US, dollar denominated asset. And we also saw some use cases for payments, kind of in the in the Global South, where the sort of digital banking infrastructure just didn’t exist, and therefore people preferred to use stablecoins to move value between each other. I think what we’ve seen recently is really that sort of regulatory gathering regulatory clarity is kind of bringing more mainstream use cases to the fore. I mean, well, pay being the one example. And I think what we’re now seeing is kind of instances where people previously would have just used the US dollar. They’re now thinking, Well, if it, if it would have resulted in a swift payment. Is there a more effective way for me to use this US dollar like asset somewhere else? So we’re seeing this now in a lot of corporate treasury use cases. So instead of people moving us dollars around using Swift, they’re moving USDC around and then on and off, ramping either side, we’re seeing platforms, for example, that are denominated in US dollars, that have overseas participants, instead of, again, wanting to receive a swift payment, you know, taking two or three days, funds coming off the principal, if they if it’s getting converted by their recipient bank, you know, an unknown value arriving in their bank account. And users on platform saying, Actually, I want to take control of this situation. I’d rather receive my USDC stablecoin now and then I can convert it at my leisure, at the rate that I prefer, and kind of giving people that that flexibility. So, yeah, I think it’s really those, you know, people converting from traditional USD to to US dollar based stablecoin that’s really seen the sort of mass adoption of the last year?

Prakash Venkatrakash:
Yeah, so, Tim, I have a slightly different answer. You know. I’ll probably talk about two areas of stablecoins. One is the regulatory side of things, where I feel that regulators across the globe have actually moved from a wait and watch sort of a mode to rule making, so, you know, and that’s actually accentuated the use cases in the market. So that’s been a big change. So, you know, when you have clear rules, the adoption, the, you know, main you know, the adoption within the market is high. The other thing that’s sort of playing out in the market is the fact that there are multiple use cases. And we are essentially a software and payments company, so we look at use cases pretty closely. There are just multiple use cases coming to the fore, you know. So stablecoins can be used for trade finance and supply chain payments, whereas smart contract can release payment releases stable. Coin when the goods are verified, right? It could be used for programmable escrow, where a freelancer is probably releasing stablecoin based on smart contract being verified, right? It can be, you know, as we sort of mature within the stablecoin space, it could be used for loyalty and rewards, for that matter, right? So there are multiple use cases that that’s getting traction in the industry, and that’s probably one thing that is standing out and that, you know, as I speak, there are just so many use cases coming to my mind. I know for a fact that Singapore and UAE are looking at Vat collections through stablecoins. You know, that’s even, you know, charity and humanitarian aid. These are conversations which are happening in the market. So pretty exciting times. But, you know, I would look at regulations and use cases,

John Hallahan:
I think, from our side. So as I mentioned, we kind of have this 200 billion roughly a month that’s going through the platform in stablecoins. We’re kind of seeing kind of three interesting use cases in that space. And 50% of the flows we see are kind of an on and off ramps. So it’s kind of the traditional cross border flows on the remittance side. So companies like bridge and Moon pay, for example, who are providing us denominated stablecoins as accounts, mainly in the global science as John mentioned, the second use case, then is kind of more on the B to B corporate payment side. So we’re starting now to see more corporate treasurers become comfortable with stablecoins, and now thinking about how they can use them, basically in collaboration with also using Swift payments, so working with companies like Zodiac markets in that space to essentially provide that level of FX, which makes corporate treasurers comfortable. And then the third one then is that kind of USG hedge that John also mentioned as well, which is kind of, you know, offering USG denominated stablecoins in emerging markets, maybe to kind of be a little bit forward looking though. You know, we think the majority of the flow that’s going to be driven in the next, kind of 18 to 24 months. On our side is actually around banks stepping into the space. So I think the regulatory clarity in the US has led to banks being very comfortable. I was at sybos last week. It’s incredible how many banks who wouldn’t open the door two years ago are now asking how they can use stablecoins and what their strategy needs to be. So I think you know, a lot of that flow, and given the banks, I guess, control the majority of payment flows globally. I think banks will be the kind of next piece which are, I guess, building out the additional use case.

John McNair:
I think one, one thing that I’m waiting to see what happens is, is, obviously we’ve had the US make their move, but what do the other regulators do? And obviously USD denominated stablecoins are fundamentally pretty good for the United States of America. Are they great for every single other nation? And what do other regulators do in response? Do they want to see the sort of re dollarization of the global economy backed by stablecoin movement, or do they say, actually, we don’t like this potential loss of fiscal control, we actually want to sort of clamp down a little bit, or at least have stablecoins kind of move beyond all being USD based.

Kristen Reichel:
Yeah, I think it’s, I think that’s a good opportunity for other currencies to, you know, take a bigger role. But I think, I think 80% of all global trade happens in US dollars, right? So it’s, it is a it’s a shift, but it’s not right. So it’s not that different from what we already see today. So, but it is an opportunity for other, you know, strong currencies to, I think, certainly

John Hallahan:
on the trade finance side and the trade side, if you take like swift for example, like less than 50% of Swift payments are in USD, for example, about 15% and great British pound, about 20% in Euro. So in the bank, stepping into the space, I think the majority of those commercial use cases and cross border use cases, there actually is a role for those non USD denominated stablecoins. And particularly when you look up, you know, a lot of the exchanges that are launching now in Europe and kind of scaling out USD as a denominated currency, unless it’s been approved by Mika, for example, it’s not going to be an option. So I think there is space for non US denominated stablecoins, but these cases just haven’t been proven out

Moderator:
yet at scale. The point about the American economy taking the lead, and I wonder whether the genius act et cetera has happened deliberately to ensure that America stays at the center of international finance. How much appetite is there in the rest of the world for that to occur? I mean, I just wonder whether, whether the Gulf states and other geographic areas of the world would actually like to prize that, that away from America, using their using their stablecoin, and having their stablecoin being at the center of international trade. You see that happening to an extent?

John Hallahan:
Yeah, I think if you were before the genius acting passed, or if you were to look at kind of the two main markets in the world that have been very open to the adoption of digital assets in general, you’d probably look at the EU with the mica regulation, and you look at the UAE in particular in the Middle East. So you know, first global digital asset regulator via in Dubai. Why you’ve got adgm and Abu Dhabi who are essentially, kind of leading the charge on the more traditional side, and you’ve got a central bank who’s very open to kind of the adoption of the technology. You’ve seen a couple of the banks out there, first Abu Dhabi bank, for example, who’ve already launched a stablecoin. Others that we’re speaking to that are already customers who are thinking about the same but the reality is that’s quite a small market, and mainly a large remittance and cross border markets. So I think for these cases of remittance, it’s interesting. But when you actually think about the scale of banks out there, you know, not as you know, not as interesting market as Europe, for example, the E regulation probably not as good as well, because you can’t pay out yield on stablecoins, same in the US. So I think if there’s a market that’s more open to paying out yield, I think that’s an opportunity for you to kind of take a step in the right direction. But I think, for the moment, the majority of flows that we’re seeing with the clarity act next, next year, as well, in the US is that kind of leading the charge.

Prakash Venkatrakash:
And mass is actually another market Monetary Authority of Singapore, which is, I would say it’s extremely forward looking pretty much across use cases. They I had a conversation with a senior person in mass, and they’re looking at stablecoins in a very, very big way.

Moderator:
Yeah. So if we as a situation currently is many most stablecoin are pegged to the US dollar. stablecoin has never experienced a recession, has it? It hasn’t seen recession, depression and economic turmoil that other fiat currencies have. If I’m not suggesting there will be, if there is significant economic change in America, if there is a recession, if there is even worse. Will stablecoin cope?

Kristen Reichel:
Yeah, I’ll start

Moderator:
so many stablecoins are tied to US Treasuries. Aren’t they? Sure? I can see an unforeseen territory that we haven’t explored yet.

Kristen Reichel:
Yeah, I think, I mean, we’ve already seen deepaking of stablecoins already. I think, you know, USCC was depegged. I can’t remember the exact amount. In 2023, you know, Silicon Valley Bank went under, so assets were frozen, right? So it has happened, we have seen stablecoin issuers that have failed, right? So there’s always that risk. No question. And I don’t, I don’t see that changing at this point in time. I mean, there’s always a risk with with all this. And you know, hopefully the US will stay strong. We’ll see. But for now,

John McNair:
yeah, one thing I thought was particularly interesting about that moment was the sort of flight to safety was moving out of USDC and into usdt. So there’s sort of the transparency that USDC gave you was actually a sort of perceived negative, whereas the relative opaque nature of usdt was actually, you know, better, that you don’t know, which I found fascinating kind of and shows you how the market moves in this in this kind of ecosystem,

Kristen Reichel:
customer consumer confidence, right? Plays a major role in all of this, right? So, yeah, I think that’s an interesting point. Transparency is great until the consumers start to get scared, and then you’ve got a real problem.

John Hallahan:
Yeah, I think it’s more of a threat on stablecoin issuers than kind of the market of stablecoins, because the majority of these companies who launch stablecoins, their main business is their net interest margin on the reserves, right? So for them, obviously a recession or the US Treasury is being paid out at a lower yield is bad for their business model. And I think what’s quite interesting when you compare where we are now to where we’re in 2023 the majority of issuers now are actually kind of rather than being in traditional US Treasuries. A lot of them are going into tokenized US Treasuries, so like Biddle, but which is black rocks, money market fund has been very successful at targeting crypto native businesses for their for their treasuries. And the majority of stablecoins now are backed in some way by tokenized money market funds. The benefit of tokenized money market funds is that you can subscribe and redeem subscribe and redeem out of them essentially instantly. And I think, you know, a lot of the kind of run on the bank piece was that you couldn’t access your treasuries or, you know, redeem out of them within two or three days. So hopefully, as more you know, backing assets are moving on chain, we’ll see less issues around the volatility of pegging. But I think, you know, it’s mainly a problem for issuers. I think people who are using stablecoins in the ecosystem, you want the flexibility of having access to many different stable stablecoins across many different rails. For issuers, obviously, then it’s more of an issue if there’s a recession or other types of things like

Prakash Venkatrakash:
that. Yeah. And liquidity management also is super important, because in terms of, in times of extreme stress, there can be multiple levels of redemption which can happen together, which can actually shake up your liquidity, which is, you know, your reserves. So that’s something that that’s a security risk.

Moderator:
So is the I want to get on to matters of regulation and other stuff. But I’m just fascinated by. By what could, and I don’t want to sort of hype up the possibility of an economic disaster, but, but is the stablecoin infrastructure that we have strong enough and stable enough to withhold financial shocks that that a couple of years ago we wouldn’t have necessarily predicted could be ahead?

Moderator (to panel):
Well, I’ll look to the infrastructure.

John Hallahan:
The technology infrastructure is fine, yeah. Like, I think the base level infrastructure, at a technology level is good, but it’s the, it’s the financial infrastructure of how you manage your reserves and different pieces, which are, I mean, it’s down for the fiscal stability of the organization, right? So it’s hard to know unless you’re kind of looking at the financial reports of all the different issuers. But I think from a technology basis, we’re, we’re fine,

John McNair:
yeah, I wouldn’t necessarily decouple it from traditional finance in that regard. And I think they’re so intertwined that it’s one of the same thing.

Prakash Venkatrakash:
Yeah, I would say, you know, there are, you know, things could probably go wrong in any environment, whether it’s a traditional setup or a stablecoin framework. I think you know, with stablecoins, there are a bunch of things that can go wrong as well, whether it’s reserve management, where your assets are not adequately collateralized, for that matter, or there’s a single custody owner for the stablecoins, and there’s mismanagement of the custody right? There could be something. They could be a bug in the smart contract process. So there are multiple things that can go wrong, but that can happen in the traditional world as well.

Moderator:
Feck up. Well, let’s get on to regulation, which has been spoken about and touched on here quite a lot already. So regulation has been the driver, we think, for the explosion, certainly this year and could and could assist stablecoin to spring forward in the years to come. Are you content with how regulations are emerging globally? Clearly, there are differences from region to region. Do you have any concerns about how regulation is developing?

John Hallahan:
I think from our perspective. So we’re a software vendor, but we do speak to a lot of regulators, and we support a lot of our customers when they’re going through their regulatory process. I think what we have a risk of at the moment is a fragmentation across different regulatory regimes. So you know, you might have five particular features in the EU and maybe eight in the US, and then you might have three in Singapore, for example. So I think regulators collaborating to have a base level of what the asset is, I think is quite important. And us as a technology vendor as well, we need to support that base level of feature that’s required from a from a regulatory basis. So I think for a lot of the global issuers, they will be lobbying a lot of the major regulators to ensure that the base level standard is set at a certain level. But I think that is a risk that we run into. I think regulatory clarity is great. I think the flows that we’re seeing into the ecosystem are based on that regulatory clarity. But we do have an issue with maybe certain regularities being a little bit leaner or maybe a little bit stricter, and that will lead to a bit of a fragmentation in the stablecoin ecosystem?

John McNair:
Yeah, I would echo that. I think as far as WorldPay is concerned, we don’t necessarily care about which payment rail or which payment asset is the one that becomes successful, and because we’re agnostic to it, and we will support what our customers want us to support. But I think, yeah, clarity is always better, and fragmentation just adds unnecessary complication for us and for our customers. So the more harmonized and the more kind of consistent we can get across different markets, the better. The better for clarity. It is

Moderator:
so do you see that clarity emerging organically, or as countries just simply see best practice elsewhere and adopt it? Will we eventually fudge our way to some global consensus on regulation?

Prakash Venkatrakash:
I’ll probably give an academic view. So genius actually stands for guiding and establishing National Innovation for us stablecoins, right? So there is a definite intent to make clear rules than what it was before. There is also, you know, the fact that any environment where the rules are clear and proportionate to the stablecoin framework, you see a great adoption. And wherever you see see a regulatory gap, yeah, lack of clarity around reserve custody and operational framework, the adoption is pretty slow.

John Hallahan:
Yeah, I think a lot of is going to be driven by the industry as well. So like you see in the tokenized security space. At the moment, for example, we have kind of large financial market infrastructure players collaborating on minimum base level standards, DTCC, Euro, clear and clear stream. We’re kind of doing that on the security side. Probably do with something similar. On the stablecoin side, some of the larger issuers, there’s really only two, let’s be honest, coming together to kind of agree on a base level Standard. And I’m going to lobby on that same basis. So I think, you know, we can take, you know, take some some advice from other industries, and kind of look to implement on

John McNair:
that way as well. I think the uniqueness to stablecoin is that the sort of tech, by its very nature, is borderless, with with Fiat. A lot of the tech has been built for the market in which it is operating, and so the tech and the and the regulation have kind of grown up hand in hand, whereas in this case, the tech is is there, and the regulation is sort of catching up. And that’s where you get the frustration that you don’t have consistency, because the tech is already consistent. Are we

Moderator:
at a point where cross border transactions are truly streamlined, are there still snags to sort out? What do you see needing to be done in the years ahead? Yeah, I

Kristen Reichel:
definitely think there’s. I think when we’re just speaking about stablecoin transactions, that’s it. You know, I think we know all the benefits, they’re faster, they’re cheaper, they’re always on all those things, but it really is the on ramps and the off ramps that the friction starts to happen. I think on the off ramp side, I can give a couple examples that we’ve seen at Rapyd where we have companies that maybe are collecting payments from a, you know, emerging market. They have a lot of emerging market currencies that they want to repatriate before, you know, a swift transaction is fine, if it’s us Euro, right, but if you’re talking about emerging market currencies, it’s slow. It’s, you know, takes days, whatnot, or bank rails, whatever. Now, with stablecoins, we have customers that now are using stablecoins for repatriation, repatriation of their monies, and it’s instant. So they transfer the, you know, these currencies, and it’s available right away. So absolutely streamlining in that sense, I’ll give one more example in the payout space. I’m sure you’re seeing this too. Let’s say we actually have customers that are sending payments to suppliers in Southeast Asia or wherever, as it worked before stablecoins. You select the country, you have the beneficiary. We serve up all kinds of options for you. You can use lots of different payout methods to do this, but the problem is, each one is t plus 1t, plus 2t, plus three, right? And we try to streamline that as much as possible, but to a point you’re relying on different rails to make the payment. Now, they select stablecoin, they enter the wallet ID, and that’s it. It’s done. So the the funds are there in the suppliers wallet immediately. So absolutely, seeing the streamline effect of stablecoins,

John McNair:
my perspective on the at least on the payout side, is that cross border, cross border payout is a problem that’s sort of largely been solved by companies like world pay and the sort of onset of RTP networks across across the world, where the the impression to the customer is of a real time cross border transaction and and that’s great if the if the beneficiary wants to receive their home currency. So for example, if I’m receiving GBP here, my experience is great. If someone wants to pay me from overseas, as I mentioned earlier, the kind of the biggest use case that we see is when that is not the case. So for example, if someone wants to pay me in USD, or for some reason, I want to receive USD, there is no sort of cross border ACH type solution that can help me there. I have to rely on Swift. When I have to rely on Swift, it means delays, it means fees. And that’s where I think stablecoin is a is a real game changer for the cross border payment use case. In addition, you know, obviously seeing a huge amount of improvements in the efficiency of liquidity movement between different markets to help to facilitate that sort of cross border ACH or cross border RTP style transaction, but that’s in the background. The consumer doesn’t see that, and the consumer isn’t exposed to it. That’s the payments companies that are using that as a way to move their cash between different markets in real time. But the problem is, someone still needs to be there on either end with the fear to allow that transaction to occur as they did before.

John Hallahan:
Yeah. I think the reality is, on the cross border flows like a blockchain or stablecoins are just they’re just one additional payment where right? So they’re not always going to be the right choice. I think if we’re sitting on the stage in two years time, and we’re not talking about it being stablecoins, but it’s just in the back end and someone is receiving money and can go in and out of a stablecoin into Fiat. I think that’s success for the industry. We speak a lot about use cases, but the reality is, we’re speaking about use cases because there haven’t really been wide scale production in a lot of them yet. So I think success for us is. Cross border flows, being in stablecoins or tokenized deposits, or CBDCs, whatever it is, and the end user doesn’t know that it’s a stablecoin.

John McNair:
Yeah, I think that that is the single biggest adoption barrier, is the fact that with stablecoin and crypto in general, the user is very much exposed to the technology. They’re aware of precisely what asset is being moved to them or from them. If you think about commercial bank money in a sort of Fiat ecosystem, I’m not aware that my pound is a Barclays pound versus an HSBC pound versus everyone else’s pound. We’ve managed to make that seamless between central bank money and commercial bank money. And the experience is very, very harmonized. I think until stablecoin or tokenized commercial bank deposits and or cbdc, if we ever get there, I think until you get that general harmonization, which is which comes from regulatory clarity and and tech, basically, I still think we don’t see that mass adoption, because someone receiving a stablecoin, or someone using a stablecoin, is not necessarily using it to buy their groceries. They’re thinking of it as a separate pool of assets that can be at some point, redeemed or exchanged for, for the sort of day to day utility asset that they use,

Kristen Reichel:
unless they’re in emerging markets, right? Then it’s a different story. But I think here in the UK or the US, it’s, you’re right. But I think in these emerging markets, there’s partnerships with like, you know, visa and bridge, right? Where people are, they have stablecoins in their accounts, and they at the POS, it’s getting instantly converted, you know, to the local currency. So it’s happening, but it’s sort of edge cases. It’s not, yeah, but I

John Hallahan:
think the benefit of that is, obviously, you’re, you know, you’re using a card in the same way that you would for your traditional system. So the UX for the user is largely the same. So I think if the UX is really the issue here around the cross border piece, and if you’re in emerging market, and you have a stablecoin balance, and you can spend it, you don’t care. You don’t care what the balance is, if it’s a stablecoin or if it’s a traditional asset.

Prakash Venkatrakash:
The fact is that, you know, over the last probably three or four years, there’s so much of technological advancement, whether it’s interoperability between various blockchain frameworks or, you know, the very fact that there are now AI tools available for privacy and compliance where the user privacy does not get compromised, but all the EML and KYC checks are taken care of. So there’s those developments which have come in, which is, which is great. Any questions at all?

Moderator:
Because I’m looking at the time when I got about 10 minutes left, which is horrifying. So if you’ve got any questions, sir, Izzy, can you run a mic to the gentleman there?

Audience Member 1:
Yeah, hi. I wanted to ask you mentioned, you know, the sort of the legacy systems, and when there’s stablecoin transactions that sort of happen on chain, what is it like to sort of update the legacy systems of that transaction that’s happened on, not necessarily the reconciliation side. But, I mean, I’ve seen some work around, you know, sort of ISO 200022, to seeing if there’s any sort of pain points around that of, you know, kind of linking what’s happening on legacy and to one chain,

Prakash Venkatrakash:
I will probably just, yeah. I just, probably just start off the answer. And then, you know, experts can actually give a slightly more detailed view. But, you know, whenever I have seen, you know, we are integrating very extensively with the stablecoin framework. One of the advantages that we have seen is these frameworks come with an API ready environment. So, you know, the need for a complete, you know, rehaul of the system is typically not required, and the off ramp, on ramp is pretty smooth, which is my experience. But yeah, yeah, like

John Hallahan:
for us to onboard a bank, it’s probably in the region of six to nine months for us to actually get our infrastructure up and running, it’s probably in the region of kind of five to six weeks. And then the rest of it is kind of an integration project, but with the bank essentially. So you know, you might have the best API’s in the world, but if you’ve got a core banking system, which is 30 years old, it’s going to be very hard to plug in a real time system into that. So I think, you know, a lot of work is required on kind of tracking that integration to make sure systems can still work seamlessly. But it’s, it’s very dependent on the level of the organization. If you’ve got a core banking system you’ve just integrated in the last three or four years, it’s going to be a relatively easy project. If you’re working on legacy infrastructure, or if you’re a company that’s made several acquisitions and you’ve kind of got a Frankenstein core banking system, it’s going to be very difficult to integrate these types of rails. So there’s no kind of one answer to that question. It really depends on the kind of the tech stack of the organization.

John McNair:
One of the ways in which we’ve thought about it. You know, I mentioned earlier that well pays in the process of launching USDC payouts and so well pay already offers payouts in, you know, 100 plus currencies. The way that we’ve treated it and the way that we look at it as relates to our customer is, this is just another currency. So it’s as easy to add, you know, payout to neuros and. As it is to add payouts in USDC, as far as the way that we have built it, and we think that that is going to help with adoption. You know, if we require our customer to do something completely alien to them, just because it’s a stablecoin payout versus a Euro payout versus a GBP payout, we just felt that there would be no adoption. So we wanted to make it as kind of seamless as possible. Our customer can choose to fund us in USD or any of the other available funding currencies and just simply pay out in USDC.

Moderator:
Sir, another question at the front I

Audience Member 2:
thank you. Thank you. Firstly, thanks for that discussion. It was really, really fascinating. I find this such an exciting topic, and I’m generally pro stablecoin. I’ve seen firsthand how it’s benefiting, particularly parts of the world where there are very strong corridors of migrant work and people sending money back home, as it were. So that’s my preface to this. I’m generally pro stablecoin. I did cut my teeth in this industry as a criminal investigator to money laundering and fraud, and back in those days, I used to work quite closely with city London Police, who are just opposite where we are today. But it was all about following the money. And we sort of talked to the banks. There were, you know, either end of any transaction, there were financial institutions. There were kind of paychecks in between. There’s infrastructure in between. And I just look forward to look ahead, I should say, to a time when maybe stablecoins have just conquered everything, and we’re all transacting stablecoins all the time on public, permissionless blockchains, and in that hypothetical world where It’s possible for me to send from, you know, an unhosted wallet to if I just know your wallet address, I can just send you $2 million and there’s no institutions really, at either end of that, I can just send it to you because I know your wallet address right. So in that world, who’s whose job is it to actually notice that that transactions happen.

John Hallahan:
I guess the question back to you is, what’s stopping you from sending me $2 million in cash?

Audience Member 2:
Exactly, right? I think that’s the analogy, right? I could, I could have a suitcase full of cash, and if I knew your physical address, it’s the same thing. But but that’s not a satisfactory answer. If you want stablecoins to be successful. I think there’s

John Hallahan:
like, two different views. If you’re gonna off ramp it into Fiat, then it’s on the party that’s off ramping it to basically it’s in the same way that when you you know you go in with 100k to a bank and you lodge the cash, they’re going to say, where’d you get the cash? It’s the same thing. I think one thing that regulators are looking at is, is, how can they also add these kind of compliance tools that a lot of banks and other institutions like world pay will be using. So you’ve got the chain analysis of the world, elliptic, TRM labs, these types of organizations who were on chain crime, essentially fraud prevention and analytics. So I think a lot of regulators are actually integrating those themselves and tracking, but the reality is, with unhosted wallets, unless it’s been issued by a certain organization, it is hard to track, so there will certainly be edge cases. But it’s when you’re going back in traditional that typically you’ll have that level of due diligence, which is required.

Audience Member 2:
Yeah, I mean, I suppose that all of that assumes that we Fiat will always be there and you’ll always want to convert back to fear, which is, I think, is probably the case as well. I was just sort of interested in your take, and how all in Are you on this, in terms of, will we get to a world where maybe you don’t convert it back to fear, because you’re just transacting in stablecoin all the time, you’re getting paid in stablecoin.

Moderator:
That was going to be exactly one of the questions I wanted to move to about where does stablecoin Go in terms of making either central bank digital currencies or fiat currencies obsolete? But I’ve also looked at the clock and seeing that we’ve got to wrap up. Up. So. So with those thoughts in mind, possibly, what do you see in the next can you look forward? How far can look forward? Next one or two years? What are the big developments we should be looking at and thinking about in 30 seconds each, please? Panels. Next two years?

John Hallahan:
John, yeah, I think every like what we’re looking towards is every bank accepts stablecoins as a means of payment. So you can have a stablecoin account at your bank in the same way that you have it for traditional cash. And I think if we get to that space, a lot of these issues around interoperability between different stablecoins, fragmentation is kind of cleared up and cleared by the banks.

Moderator:
So some fiat currencies be bashed out of the water by that. Yeah.

John Hallahan:
I listen, and two years now,

John McNair:
very unlikely I would say. Prakash, your thoughts, yeah, I think the potential is enormous. I think we I’ll give you a short answer. I think the regulation are getting smoother, the adoption is becoming higher, and we are actually moving towards a digital, borderless world,

John McNair:
my opinion is the one to watch is tokenized commercial bank deposits, because I think it’s been demonstrated that they can operate more easily within the current regulatory framework. And will regulators of markets that is not the US prefer to kind of maintain some of the fiscal control they get through the banks by by having assets that are on chain. Got all the sort of benefits of stablecoins in terms of movement but but still kind of maintain that sort of economic benefit to commercial banks being able to lend money to people.

Kristen Reichel:
So I answer this a little bit differently. I think maybe more selfishly, I feel like the missing piece in all of this. I mean, it’s great that, you know, all this infrastructure is getting built and it’s getting easier, but I think we’re still missing that customer experience, a good, easy to use, clear customer experience. I think, you know, the financial use cases have been not solved, but, you know, greatly, vastly improved, but we are still missing that clean, simple user experience. So that’s something that I think we we still need to work on.

Moderator:
There’s a challenge for the for the tech and the platforms and everybody else out there. I have to to apologize panel. We do have to wrap up. I don’t know where 45 minutes has gone. I think next time will last for a couple of hours, and we’ll do stuff in more detail, and we’ll need snacks, yeah, and more, more gin in the water. But panel, it’s been absolutely amazing. I we’ve covered so much and so little, but, but absolutely brilliant. Thank you very much.