The Next Era of Stablecoins | Dmitriy Berenzon

Transcript

The main question here is do you think somebody just comes in and swoops in like a web two company and offers the best UX that they can just by having stable coins on the back end or do you think there's a chance for cryptonative companies to win out there? And the followup to this is how do you see that um space evolve over the next few years because I really want actual crypto banks. Yeah, for sure. I mean, I think you can take a step back and and look at this as an evolution across several decades where you have payments 1.0, which was effectively correspondent banking powered by Swift. And this was a network that, you know, it's it's global, it's

secure, but it's very slow and it takes days to weeks. I've heard from founders over a month to have a payment land. Uh and then you have you know payments 2.0 which was effectively these fintexs like wise which used um uh prefunded accounts local rails for payins and and and payouts to effectively simulate real-time payments. So they effectively have liquidity pools in each jurisdiction. And while that effectively is faster, it came with a lot of other issues. Um, notably it's still quite opex expensive for them because they

need to maintain uh a complex treasury and compliance infrastructure. They have to have multiple local correspondent banking relationships. They need to have risk engines to manage float and effects volatility. And I think payments 3 3.0 know is really using blockchains and having this internet native settlement layer. And now we can do transactions in the order of seconds that cost in the order of cents and there's no evening or weekend or holiday cutoff times and it's fully transparent so you always know

where your uh your payment is. And I think, you know, a similar question to a lot of the deepen um uh advancements is the why now because this is a topic that's not new, you know. Um but I think the the why now is we have stable coins that are mainstream. we have better on and off ramps be uh uh with more depth because those local OTC desks and uh market makers they do want to hold nonvolatile digital dollars on balance sheet along with their local fiat. We have uh embedded wallets like privy that actually give us a web 2 like UX. Um we have pending clear uh regulation around

uh stable act and the genius act and I think we're we're really opening the floodgates for for for both uh fintex and larger financial institutions to come on chain. Um, but this it it's it's a double-edged sword for the let's call it the crypto incumbents because what crypto teams really suck at is solving for for distribution, you know, and Revolute alone has 60 million MAUs and and and I think the conversation today is very different than it was three four years ago. I I remember probably 2020 or or 2021 I was I met the the the head of BD Chime and

and um I asked them you know like Chime's users are middle inome Americans in um like central US states and and I said you know like wouldn't it be nice if you gave them access to DeFi yield and and the guy was like I don't want anything to do with crypto you know like I I'm so busy trying to not die competing against uh uh other big banks that I don't want to take any more risk. And today the conversation is flipped where Revolute has their own exchange.

Um they have some really interesting other products in the pipeline. Um you see it with Robin Hood and uh obviously Stripe. Um, and a lot of the DeFi projects like the crypto neo banks, they are good products, but they do not solve for distribution. And if you can figure that out, then I think the DeFi mullet is probably the best way to go, but it's going to be very teamspecific. But I've I I've spoken to many let's call it high pedigree founders that are building a crypto neo bank that cannot answer how they will

get to I don't know like a million users. [Music]