DAPPCON 2024: Onchain Fiat: The Wallet Awakens - Gísli Kristjánsson

Transcript

hello everybody it's good to be back it's good to be back in Berlin and it's good to be back here at dcon I wanted to talk to you today about stable coins in general but more specifically I wanted to talk to you talk to you about onchain Fiat and for those of you who don't know me I'm gley the CTO and co-founder of monara to kick things off I would like to gauge The Audience by show of hands who here uses stable coins okay very good a lot of you in the room is there anybody here that gets

their salaries paid in a stable coin well I see a couple of hands here raised so I think we've seen the sort of the the the emergence of stable coins and their utility all around uh defi they were instrumental in the protocols like Moro lending payments exchange all of this good stuff but if we really go back in time and ask ourselves when did the stable coins emerge this was in a Time long long time ago and the this was essentially a solution to the problem of cryptocurrency Exchange Jes not being able to open up bank

accounts so it really shouldn't come as a surprise to anybody that in that stable coins are mostly denominated in usds and the USD is kind of the king when it comes to cryptocurrency speculation and everything that followed now to maybe drive that point home um I'm going to show you the evolution of the stable coin Market uh for the past couple of years broken down uh by currency and this is our favorite metric of course the the tvl so as you can see here uh the euro is the red one right and this is kind of

interesting to see right uh does this mean that there is no real demand for non USD stable coins does this mean that the euro doesn't belong on chain what do you think I mean I think it's a legit question right uh so in Europe of course okay so you get your salaries paid in uh die or usdc and then you want to use it for something from day to day uh this usually means that you then have to move your tokens to an exchange and place them in an order book for a Euro this is where where you incur fees there's a lot

of complexity there and then you have to maintain an offchain bank account because you aren't going to be able to send your Euros from kaken directly to your landlord to pay for rent right so you'll have to have an intermediary bank account and often times the bank will kind of reject the payment because it's originating from crypto it's easier for the to say just no we don't understand this so you can't use this and I recently uh I don't know how many people know this but in uh at the end of next month MAA is entering into

force and this is going to change a number of things what exactly I don't know but whether you love or hate maika it essentially lays out a framework a set of rules that stable coin issuers need to adhere to um so we are we monian we are the issuer of URI and that is a stable coin denominated in a euro and because the stable coin landscape is such a big topic we like to talk about onchain Fiat and you may ask what the heck is an onchain Fiat so this is a definition that def

finds what an onchain Fiat is and when we decided to put the Euro on chain these were some of the fundamental properties that we thought were so important it needed to be real money it couldn't be a proxy for something else it just had to be the Euro it also needed to kind of adhere to the crypto ethos so it needed to be your wallet not some monium wallet exclusive wallet and it needed to be your money just the way we like it third thing it needed to be defin native this could be another Bank coin which you know wasn't usable wasn't an

erc20 didn't have the properties so it needs to be able to talk natively to the protocols that have been uh innovated on in Defi and then as a fourth Point all the the fussy logic that was talking about earlier about going through the exchanges it never made any sense to us to go to an exchange to buy currency so interestingly because we regulated and we are future compatible with MAA we can talk to trafi as peers sure we'll have to put on a suit but still we can so our probably the biggest in one of the bigger Innovation that we have

done in the last years is the web 3 IB and I'm not sure how many of you are actually familiar with it but just to give it in layman terms so you have your blockchain account and you have the address the wallet address to talk and transact with smart contracts and peers on chain but what we give you or your wallet essentially is the superpower of being able to talk with another kind of Iden ifier the Ian so you get a personalized Ian in your name and now you can speak and transact to your friends in trafy you can receive money from anyone in the sea system and

you can send money to anyone in the sea system uh it's truly magical if you haven't experienced it so some people ask us like hey how how are you guys doing and at least by one metric we're kind of killing it right so last uh month we we surpassed the 1.1 billion mark this is not tvl but transactional volume right the tvl is still pretty minimal at 15 million but I think this graph alone proves that the Euro belongs on chain and it's not going but it it it

it may be the case that it's going to be used differently than a USD uh counterpart so we are of course here we've all heard about uh nosis pay we're very proud to be powering the card um not all of you know that you know when you you you put your your money you top up your your cart it's a u uh and because we're regulated we can settle with the VISA Network I think this is the first time to my knowledge

at least where you have a a a a self custodial wallet that is connected to a card that allows you to spend it at the at 130 million Merchants uh anywhere in the world this is this is the power of the infrastructure that we've built so it's it's not just card payments that the URI is being used for here's a great example when I was in States here last year I talked about Ur ramp back then this was a proof of concept uh this year we have it in production or not we uh this is a third

party UI that connects some of the components in a very interesting way so for those of you who haven't used it what you do is you connect your wallet to it and then number two you connect your monium account and this essentially gives you a bridge from defi to the banking system so back to the example for the users that get their salaries paid uh in crypto or or stable coins what you can essentially do is you can you can go from any chain so let's assume that you get your paid didn't die on optimism you type in the number you get a quote uh and then you go directly into just typing in the bank account details

of the recipient this could be your landlord uh and whenever you hit the send you're going to sign it with your wallet and then literally few minutes later the landlord will have the exact amount in their bank account and what they'll see is your name it's not going to be monium or anybody else so I really like this use case here but in order for this to work like in order for all of this to come together there needs to be some liquidity and what we are seeing is that the The Exchange liquidity pairs are being aggregated mostly onsis chain and

right now there's about 7 million EUR worth of assets in those pools so users are starting to transact here uh much much more this is kind of unlocking that use case both for gnosis pay and for Ur and others and of course you can use some aggregators like cow swap 1 in uh even Ur to figure out the best routes for you uh but this is happening uh landing and borrowing uh have they recently uh put their deployed their smart contracts on nosis chain and

something interesting started to happen there uh we see of course the the common common tokens there but you can see the U there right and this is the first time to my knowledge a a Euro and into a um and if you if we start to look at the data and analyze what users are doing essentially they are going from die staking it to S die getting roughly 12% on their uh die and then when they're ready to spend it they actually borrow the U there's

now €2 Million worth of liquidity in a own gnosis here so they borrow it just at the time of spending and in the word of one of our friends they are essentially getting paid to use Yuri for payments so it's interesting to see some of the yield strategies and I think this will be a a Future theme uh for the Euro on chain as well so here here are some of the observations that we've seen as I was going through the euron chain definitely has a spot there but it's going to serve

a different role from crypto speculation and so we should maybe not think about the tvl there in the same way but rather how how much is it being used and I think the the volume there is is an indicator there on chain Fiat the way I kind of like to think about it seems to be an interesting way because it unlocks many of the use cases you can go back and forth and this really has the power or potential to become the daily driver of those of you in here that are you know living on chain getting your salaries paid in in crypto and so on and so

forth and maybe the third point is that MAA is entering into force and it's going to be interesting what that essentially means we're already seeing some news being circulated in the uh in the media about tether specifically being delisted from the exchanges but this in theory should apply to circles usdc as well because they are not compliant with the with the regulations so what is that going to mean is that going to mean that you know companies uh who are paying in in dollars today will start to use Euros on chain I don't know let's see another theme that we're seeing also is

that real world Assets denominated in Euros are coming on chain uh I know Christoph yet was here earlier talking about his uh token IIT platform uh which is essentially a a crowd investment platform where the Crack the Case of like I I at least like to think about it like uh legal icos uh where you can invest uh we of course have seen uh the the the BC 3M which are the uh tokenized government uh bills uh and we see some of the pools appearing uh in

Moro and another theme that we're seeing is that many of those projects are finding home on on agnosis it seems to becoming sort of the home of the European Defi and it shouldn't really come as a surprise I mean it kind of makes sense when you have those different projects uh there's a there's a Synergy between them there so lastly I would say that you know the infrastructure is maturing and it's probably a good time to start to put more focus on the application uh the user application themselves and I am really happy to see some of the wallets

that are uh being announced here uh the mat wallet the seal who are essentially taking all of this all of those pieces out there and instead of like having the user wallet connect to random websites change the the chains and everything they're kind of abstracting all that away allowing the user to use pass keys in instead of seat races I mean I am the naive Optimist I always think mainstream is around the corner but it really feels like things are coming together now so maybe not all of you know that we are optimizing for onboarding users through Partners like nosis pay so

behind the scenes every C holder becomes a monium customer all the investors of token iiz it become monium uh customers but if you're out there and want to have a more direct relationship with monium or if you're a builder out there building cool stuff and want to have access to our infrastructure I have some uh invite codes to share with you with you so if you're interested please find me afterwards I'll be around and I'll hand them out so thank you okay so that brings us to questions so do we have any questions from the

audience oh yeah there's one hey thank you for the presentation very insightful um we seen in the US that maybe recently there might be a shift in from policy makers into how they see crypto maybe there is an opportunity you know for they see it as an opportunity for the dollars to you know acquire even more dominance in the in the on world and online world do you think there's something similar as your closer maybe the to the European Regulators can happen also in Europe like is there a chance for Europe to start being more proactive or more

favorable or even like optimistic about the oan world so I actually think the EUR Europe is way far ahead to be honest not everybody loves MAA but it gives you a clear set of rules at least I know I'm not going to jail right I we've seen uh the CEO of circle kind of ask the US Congress to regulate them because there's just uncertainty around everything there so I sometimes think about remember the days of uh mobile phones when you had competing standards GSM was the European Standard and there was another standard in the US and if you wanted to call between the two continents you couldn't uh you know the

DSM standard became an export product for the rest of the world and now we can all talk together and I think something like MAA something like eone could become that uh so in Europe there's legal Clarity we can issue the Euro we are already issuing the pound as well to support nosis pay uh but we can issue any current out of Europe including the US dollar okay okay we have another question there okay I guess it's my

turn uh did did did manaria come up with the configuration of or the title like e- money or is that is that something that came from Regulators or where where where is that come from so the crazy thing this has been lying in plain sight for over 24 years e-money is the equivalent to digital cash in Europe it's a license that can be passported it's been used by the major fintech players you probably used revolute or PayPal or Clara they've all been emis at one stage and when we started out like creating onchain Fiat we researched into

different uh jurisdictions uh to figure out what is the best way to represent Fiat on chain uh and the e-money license which is had already existed for for 20 20 something years then uh was there and this has now been kind of shrined or confirmed into MAA that this is the way if you want to issue stable coins in Europe that is the way okay I and I think we have the last question here um regarding transaction fees and Visa I think it was like great strategic decision to use Visa as like a yeah middleman to the trefi payment

wheel rails but um um do they charge a transaction fee is it like 0. 8% or something and like what are your strategic strategic plans for the next year um is there actually a way for an e-money licensed Institute to access this uh what is it Swift or whatever I don't know yeah so that's a great question so I'd have to defer that the Visa part tosis pay because they're essentially handling that part uh we are the underlying settlement layer right so in the traditional World there are like two processes that take place one of them is the authorization and the second

is the settlement so all Euros being settled through through monium whether it's the card holders or any other are for free like you could you can move money cross the boundaries for free so we are investigating other payment rails faster payments in the UK uh so yes we definitely as an Mi have the option of connecting directly into those payment rails right so I think that's one of the upsides of having a regulated stable coin and also on that front it because Marcus earlier today was talking about separating the bankers from banking what it means for me is that we

as the issuer of the stable coin we take care of the rules and regulations and the DAP Builds on top the matching wallets they don't need to care about it I know a product person from PayPal who had to leas with over 500 persons across the organization to push out a release because they were holding customer funds now we have those teams building on top of stable coins including the Ure and they can push out changes much much faster without leasing with 500 persons yeah thank you okay I'm afraid we don't have any more time for questions so you guys can take it offline uh but yeah that was gizy chranson from monian