Stablecoins: The Payments Industry, Rebuilt

Transcript

Well, how about this, guys? Main stage. We've made it. I never thought I'd see the day that I'd be at the OKX main stage at Token talking about how stable coins are going to revolutionize payments. So, let's start with a question that I've been pondering. Can you exist as a financial services company? Can you be relevant in 2026 as a fintech, a bank, etc. and not have a footprint in stable coins?

>> Okay, I'll jump in. >> Please do. Don't be shy. >> Definitely not shy. Uh so, I definitely don't think so. Um so, I think anybody who's not interacting, engaging as a fintech, even broader than fintechs, whether they're thinking about uh digital currencies, digital assets, or agentic, those to me are non-negotiable. >> Mm. Ivan? >> It's the future, right? You can't avoid this trend everywhere. You can't go, I think, a single day without hearing the word stablecoin if you're in this world.

Um it's a proxy for a US dollar bank account. And that's incredibly valuable to the majority of the world. Um and so, I think this trend is on steroids. It's the future of banking. And it adds a velocity to money. I think that's the major unlock. When you think about the value propositions of stable coins, what are the top three? >> I mean, I I think first, it's uh around the idea of programmability, eventually, right? I think we're getting into the early stages where people are thinking about how to orchestrate the movement of money in a seamless way. Uh and that effectuates a lot of workflows that I think are valuable. Um I think the velocity piece is also key, right? The

ability to really take advantage of entire markets to build around credit and and the fact that you can't move money seamlessly across different jurisdictions. There are a lot of intermediaries. And so actually the ability to really like orchestrate that in a in a simple way and move money more seamlessly is key. And then I think like interoperability eventually is the third piece, right? It it can exist across different ecosystems and different blockchains. And for us, I think that's a a really interesting point because you don't really have to concentrate on the fact that you're operating within one ecosystem. Really the composability of the asset itself takes advantage of whatever ecosystem it can sit up and it sits across. It it can work pretty seamlessly.

>> Cheaper, faster, 24/7, right? And the world is becoming more efficient. This is a more efficient technology. If you think about, you know, most of the banking system, it was built in 1990s, right? And so now we have a rail and we have a new file format that sits on top of the rail across these different chains. And, you know, it's going to be embedded everywhere. And I think it's going to come from crypto natives that are building these brand new banking experiences from the ground up from wallets. We're seeing the rise of neo banks were going beyond speculation of crypto assets to essentially a better version of a bank.

And then you're seeing traditional orgs start to embed that technology directly into their existing distributions. So you're going to see it come from both sides. Um but it's incredibly powerful. Like as long as you have an internet connection anywhere where in the world, you can spin up a wallet and you can receive value in the form of a stable coin. Uh think about all these people, you know, we're using Western Union and yeah, I know you guys are partnered with them and you're enabling these guys to really compete for the future. But, you know, traditionally costs were on average about 6%, right? Moving money from A to B. That's incredibly expensive. And so if there's an alternative, people are going to opt into that alternative.

>> Mhm. It's cheaper, faster, better. But do you consumers care? Do they see the impact? Um from the perspective of how it changes the way they can engage with their financial services. >> I think if you look at um the the discourse on the internet right around variety of different financial products available in the market, many people are choosing what they're going to rely on based on 30 cents.

>> Right? They're like, "Oh, I'm going to switch my entire behavior because I saved 30 cents on this transaction." And there's a lot of places in the world where 30 cents is a meaningful amount of money, and it's the difference between having money at the end of the day or not having money at the end of the day. And so, if you can build better, faster, cheaper solutions, of course people are going to change their behavior. Of course they're going to care. But what they care about is not necessarily the stablecoin element. What they care about is access to products and services that they wouldn't normally have access to. And what we see mostly happening in the market right now is that because stablecoin-powered infrastructure and solutions are better, faster, cheaper, more widely available,

people are adopting them because they don't have access to high-quality products and services. Um the economies of scale you need to provide high-quality products is significant, and so many markets on a standalone basis, they just don't have that scale. And so, you need a global solution that is going to come in and provide you the economy of the scale that you need to operate a high-quality product. And with stablecoins, it becomes easier to do um than it's been before. >> Right. Maybe for me, I think there's like a slight difference that folks should think about in terms of like retail versus institutional, right?

Stablecoins are cheaper for retail. They're not generally cheaper on the institutional level with like significant size. Right? So, you know, there's a liquidity depth and all those different things that people need to think about. But I think in general, you know, when you think about tokenized money or stable coins like for the retail use case right now, I'm not saying for like institutional use case it won't change, but it does make a lot of sense, right? To point Ivan raised, the ability to spin up a wallet is seamless, the ability to actually take advantage of lower cost is there. But as you start to think about what stable coins start to do on the institutional landscape, you know, there's really strong pricing for large corporates to move money across border.

>> Sure. >> And so people need to kind of think about that as like a a broader difference between the two two use cases. >> Thank you for having us in your home city, by the way. Appreciate it. It's great to be here in Singapore. Haseeb, who graced the stage on the previous panel, had a lot of interesting things to say, has long advocated for the idea of blockchains being cities effectively. It's not a zero-sum game. You can have thousands of blockchains just as you can have Singapore, New York, Tokyo, etc., etc.

Is that the same case for stable coins? How many of these are there going to be? >> I think we're seeing a couple of really interesting trends. You have essentially these consortium stable coins. Um and you know, really stable coins have historically been dominated by two names, Tether and Circle. Um but now you're seeing the rise of other companies that have significant nodes, significant distribution, taking advantage of that distribution and wanting to own part of the economics. And so there's a big rationale and reason for them to actually go and issue their own stable.

Does it make sense for every single company to, you know, undergo the the work it requires to go issue their own stable coin, get the requisite licensing, uh make sure it's compliant for the various jurisdictions? I'm not necessarily convinced. I think that's where infrastructure providers come in and make it simpler for people to take advantage of this. But I think what we're now starting to see is a shift of economics, right? It's not just going to be, I think, two companies in the future. This market's going to become far more competitive. And, you know, if you can have your own branded stablecoin, and you can launch that relatively quickly, uh and you have a platform, you have distribution, I think 100% it makes sense.

>> [snorts] >> What's going to separate the wheat from the chaff? >> I think trust. >> I think that it's really important to You can go fast in a space, but you're ultimately talking about value, right? And And in these cases and use cases we're building, at least, is people's money and livelihood, whether it's businesses and getting operational efficiency, and that means the actual livelihood of their business. Does it survive day-to-day because the money's moving faster or it is, you know, cheaper? Or they're attracting a global base? Whether it's consumers whose hard-earned money is stable, it crosses borders in seconds uh versus days, it's fractions of a cost. So, all these use

cases, at least, that us and PayPal are completely focused on is how do you take that into global commerce? Consumers' and merchants' expectations have changed. We can send an email today in seconds, right? You should be able to send value within that speed. But with that comes a responsibility. It comes a a trust that you need to instill. It means uh simplicity of your experiences. It means regulatory forward and being compliant, um and taking a very uh disciplined and thoughtful approach uh to it.

>> Maybe, you know, I think you're absolutely spot-on in in terms of trust, but I do think the ability for liquidity depth and distribution is I think that's something that's like vastly underestimated, right? So, at the end of the day if someone's getting paid in Vietnam or in, you know, Ghana or in Zimbabwe or wherever it might be, um they need to be able to redeem that for value. Right? And so if you think about where a lot of like uh the tokenized deposit plays or any of these other things, they're like trapped ecosystems that you really can't move out of. I think what Circle and Tether have done really well is that their distribution and their ability to you know, get out of that stablecoin into local currency is like extremely

wide, right? And so for a lot of the new stablecoins, I think they're going to struggle with that distribution aspect. Like obviously big players may come together and build that over time, but I think either they're going to be singular platform plays and it'll be very hard to extend beyond that and then someone will have to come in as an intermediary and basically provide a market to get out of a platform and into another stable where someone can actually redeem. But the inability to do that I think will be like stifling for any of these stablecoin issues issuers to kind of overcome. >> And I think the consumer doesn't really care. I think the consumer, if you look inside of most wallets, what's a really interesting trend that we're seeing in real time is they're just referring to stablecoins as cash, cash with a star.

Uh but uh it's cash, it's a checking account, and that's your entry point. And so, you know, when it comes to stablecoin issuance, when you are building a the next generation neobank or app, I think really what it comes down to is are you getting rewarded for those economics, right? Like the you know, most fintech businesses you can really break down in a couple really four main areas of their business in which they're able to monetize. They're either running a float business, right? So they're holding on to balances and they're earning interest income on the treasury bills that are basically backing those stablecoins in some way. They're making money on trades, right?

Or moving, you know, from a stablecoin into any crypto asset and so they're earning some sort of spread on that. Uh they're making money on interchange, right? If you're issuing cards, right? Uh Rain uh has seen that. And then really the last piece is subscriptions or services income. And those are really your four buckets. And so really when you're thinking about, you know, these white label stable coins that are coming to market, it's really well if you've captured the distribution, you have those customers, are you being rewarded with those economics? And so I think the existing players need to adapt. They've historically not wanted to share any of that interest income. And so I think that's what's prompting a lot of these partners say, well, you know, if it's not so difficult and a partner can help me do this, then there's an opportunity to do it. But you're 100% right that,

you know, there is a lot of work around the liquidity provision because if it isn't liquid and you can't convert it back into fiat or into other crypto assets, uh you know, you're going to be constrained with the realizing the full potential and value of that stable coin. >> I've been I'm glad you brought that up because I'm keen to double click on the economics of payments and how they change because of stable coins. Who are the winners? Who are the losing losers? What what changes in that respect? >> Yeah. Well, what's really interesting is I think the trend is more and more value is going to shift over this new system.

And so the economics now go to the issuers or the people that control those stable coins. And so transaction costs come down, which is great for the consumer. Um but it doesn't mean that Visa and MasterCard are going away. Like there's just insane network effects. And so people need to spend their stable coins in everyday life. It's going to take probably a decade for every merchant to have a POS terminal that is able to accept a crypto. I don't know how many of you guys in the audience have actually paid with crypto. There are places, there are pockets, and it is promising. And I think over time people will opt into that system. But what's far more inconvenient is having a card attached to that wallet and be able to spend, right? So I think, you know, that's what is probably the fastest growing trend

that we're seeing in real time right now. And so the economics again really go back to those buckets. It's interest income on float. It's trading. And it's inner change. >> Mhm. I think though it's important to remember the global aspect and Farooq touched on this. Um so, I think in developed markets, there isn't a rush. Even if you incentivize me, like I'm still going to use my credit card rewards. I'm still not adopting stablecoin payments. When you talk about emerging markets and other areas and regions, it's actually expensive >> get money. It's expensive to switch into different values. It's actually expensive because the my currency devalues day-by-day, and that costs me.

And so, I think you know, there's Yes, when you look at rails and payments depending on the use case, is it cross-border? Are there nostro vostro accounts? Are there networks? And how does that now change into a stablecoin rail? And where does the economic shift? But there's also different use cases we need to think about and take a global lens. And then I think you raised this consumer merchant and developer lens, um like we are with PYUSD UX. So, I I think there's it's not just like one simple answer and response. Yeah. >> People are hooked on the rewards. That's a really good point.

>> And so, I don't think credit cards are going away anytime soon. Uh and so, >> We're in the fourth quarter, Evan. So, that means Lululemon, Resy credit. >> Right. Those are Those are great things you want to take advantage of. So, you know, I I think my view is we're going to need to find a way to bring that same level of reward mechanism into stablecoins themselves if they're actually going to be used as a form of payment. And so, probably the shortcut for us getting there is these stablecoin linked cards, and people are going to be using them on the Visa Mastercard network. But over time, why why not settle just directly in the stablecoin? But you need to be incentivized to do that.

>> Farooq, agree. >> [laughter] >> So, how do you think it impacts the the credit card business specifically? >> I think ultimately, right, there's a few things happening. So, one of the things we see is we have programs that we power that are fiat use cases, right? Now the back-end infrastructure for that is powered by stablecoin technology, so that means that credit is being provisioned using stablecoin liquidity vaults. And there's a traditional credit card on the other side.

Similarly, we see wallet-linked balances, so you're swiping a payment instrument, it's going over the authorization layer, and then moving the money from your wallet to somewhere else. I think ultimately what we see is that because it's programmatic, the money is programmable, you're able to compose the transaction. One of the exciting, you know, opportunities ahead is how do you build better financial products that are more flexible, that allow people to kind of adjust between your journey as an individual, right? So like some people start their life as relatively, you know, skinny on the credit file perspective, so hard to underwrite. Then they over time they earn money, they borrow money, they

repay it, they develop a history. And today, there's really no product that you can that will just adjust with you, right? The way that the financial system works today, it's all very much this product is one-size-fits-everything that it fits in here. So it's like small, medium, large, extra large, whatever. And so there's an opportunity to start building products that are composable, so that as your credit quality evolves, different people are providing you that credit on the other side. You can keep the rewards the way they are, you can add rewards, you can adjust for the quality of the customer as they expand through through time.

>> It's like more real-time financial services. >> It it A lot of I think what we see right now is that stablecoins are a way to unlock a lot of the promise that open banking um you know, was promising, right? Like open banking around the world has largely been a dud, uh where many of the things people expected to happen, oh well, you know, every >> like the big wave of lending startups? >> Yeah, open banking, but also like the whole concept of like, oh, you know, you'll be able to move money to the highest earning yield bucket, and then you'll be able to move it [clears throat] to get spending. Like, that largely didn't materialize because the underlying infrastructure to facilitate that never got upgraded, right? So, if you look in the United States, it's a 3-day transfer between ACH, you know, between one institution

and the other. If you're moving from a money market fund to your bank account to be able to spend the money, you're you're not going to be able to have that. You have to plan ahead to do that, and so it's enormously complicated to do, and so most people don't do it. If you have agents that are able to move your money in real time using stable coins or tokenized deposits, that changes that dynamic, and now people have to compete on product quality, which again, from a consumer welfare perspective, is actually very good. From an institutional welfare perspective, potentially it's less good. And so, it creates the opportunity back to your question earlier of like, who are the winners going to be, who are the losers going to be? I think whenever change happens, it creates the opportunity for institutions to decide, am I interested

in being in a winner? Like, am I interested in being somebody that wins on the other side of this innovation cycle? Or am I quite happy to try to avoid this disrupting my existing business. We see this every day, right? So, we power um very large companies like Western Union. Western Union has decided in the stablecoin ecosystem, they're not going to sit back and wait for the innovation to happen and then decide how it impacts their business. They're going to join the fray, and they're going to live inside the maelstrom to get to the other side to figure out how they can monetize this and be a winner on the other side, right? Many people have been left behind by previous innovation cycles.

This innovation cycle is an opportunity for institutions globally to decide, do I want to be part of it, or do I want to sit back and relax and pretend that this is not going to impact my life in the future. >> Is AI going to supercharge the growth of stablecoins? >> Absolutely. I mean 100%. I think that you can't avoid this incredible trend of superintelligence. Uh and superintelligence, when you combine it with crypto uh and wallet infrastructure, permissionless infrastructure that can move anywhere, yeah, you're going to see a world where embedded inside your wallet you have a stablecoin balance and it can automatically start to move those balances into yield yield-bearing

products. What's so interesting and fascinating about the banking system today is how much money sits in checking accounts where there's a friction to actually go and move your money into a savings account. It's right there in front of you, but a lot of people don't take advantage of that. Uh and so they miss out on that yield. You know, you can imagine when we start to delegate trust to an agent and yeah, that's a really key piece. Like humans are going to need to be in the loop. We're going to need to gain some trust for these things over time. But I would love an agent to autonomously move my money into the highest optimizing, you know, savings rate based on the constraints that I set it, right?

That would be a phenomenal innovation. So I think we're going to see massive disruption on that side, which should ultimately benefit the consumer. >> May I'm curious, given PayPal's seat, right? You've got Venmo, you've got PayPal, you've got crypto payments. How are you seeing or or how are customers or clients engaging with those different vehicles? What's what sort of the breakdown of their preference? >> It's it's use case based, right? So when we think about So within our wallets, um we have trusted wallets, uh mainstream, Venmo's US only, but uh PayPal has

global reach. And so there's the inclusion of okay, trading and the ability to interact with digital assets within their platform. Again, just an easy simple way for them to be able to enter in the space, understand, get involved. Um, and so there's that's kind of the broader side of digital assets and more mainstream. And then there's the okay, how do you now start thinking about stable coins and really embedding that from a payments and commerce perspective. And so on that lens, there's cross-border payments. I think is that's where the highest kind of friction points so at least initially and the easier one to adopt. Um, especially again when we talked about developed versus developing. In developing markets, there's a need to access a stable currency so that it

hedges against local all right, the currency inflation, the different aspects of that. And then you can use that, earn, send, spend, um, and be able to actually transact with it. And that's where it becomes actually super powerful. And now value, let's say stable, can move across the world in seconds and fractions of a cost and actually now have end state utility for both. Um, and so I think with that's where we continue to see there's the emergence of where consumers will adopt it especially from a cross-border lens or a local lens where it really is acute. And then there's the businesses that will start to kind of interact with it. And especially for like settlement I'd say is one of the use cases. There's

businesses that need settlement of the funds faster versus like at a weekly uh, ten at times so that they can operationally move their business in a healthier way. >> That makes sense. What do you guys think is the most overrated and underrated element of stable coins? Or maybe what folks are paying too much attention to or not enough attention to. >> I think a lot of people are missing the forest for the trees, right? I mean, we spend a lot of time talking about stable coins.

The reality is is that money is getting tokenized whether we like it or not and that's going to take several forms. One is going to be CBDC, stable coins, tokenized deposits. All of these things have to run on blockchain infrastructure. And they're all non-fungible money. So that money can be programmatically moved, it can be sent from one institution to another. All of those types of instruments are going to have different elements of usability and different network effects, different fees, different yields associated with them. And then on top of that now we're adding, you know, tokenized real world assets which could be a money market fund which is another sort of money type instrument. So there's a lot of complexity that is emerging. Ultimately,

this is going to go down to you know, the responsibility of builders and developers that are building solutions to decide what is the user experience I'm optimizing for. I think over the next like three to four years, I think conversations on stages like this will be around digital money. It's not going to be around stable coins. Stable coins will be just another format, but all of it is going to have to work together and I think a lot of people are ignoring the fact that whether you like it or not, whether you live in Singapore or you live in Tokyo or you live in New York or you live somewhere else entirely, this is going to impact you. You're going to have to deal with this. You're going to have to have a plan and it's

not going away. And so I think a lot of people will just expect, oh well, you know, maybe this will just get regularized and regulation will make it go away or it'll get plugged in some way and I don't have to worry about it. The reality is is that genie is out of the bottle and like this is not going anywhere. Everybody has to have a plan and figure this out. >> Maybe I was going to say it's it's actually around the fact that fintechs and payments firms are actually in places like the US getting licenses to actually operate banking systems and enable kind of like innovation in the entire sector themselves, right? So, you know, for me, what becomes really interesting is that if you're a payment or a fintech firm, you had to rely on a bank at the last mile, right? You could

have a stablecoin, you could go through OTC desk, but if you really needed to effectuate like the through and through process, you still needed to rely on a bank, right? And so, actually the disruption was as quick as the bank could actually adopt or take on fintech providers or payment service providers to actually execute those services. And I think now, like for example, in the US, if you go and get an OCC charter and theoretically get a skinny master account, you actually can dictate the flow of what money and the service should look like. And I think that's being in a lot of ways underestimated, right? I think people look at it because it might take money from credit unions or something like that, but I actually think it's changes how people can think about money and the pace at which the flows can actually be put into the

market and then adopted. And I think that is something that people are kind of thinking a little bit an unlimited notion about it at least at the moment of time. >> I mean, that like most people don't know how credit cards technically work, how money really moves around, that's behind the scenes, how the internet even works. And so, there's sometimes a lot of, I think, whether it's overhype or over discussions on topics that aren't really where we should go. So, I completely agreed. I think the world is completely going tokenized. I think that there is no choice or decision but to engage, and we need to keep customers in the center of everything we do and figure out what

value are we bringing to whichever party in the equation, and focus those discussions. And again, of course, in a regulated, compliant way cuz we are talking about global money movement of value. >> I think she says value, and that's actually really key term because when we talk about what we're doing at MoonPay, we're building the operating system of value, not the operating system of money, because you're bundling a bunch of concepts when you start with stablecoins. First, it's your checking account, then you're moving into a yield-bearing product, that's your savings account, then you're going to move into an investment account. And the barriers to all these things are getting removed and getting collapsed into one experience. So, from your wallet, you're now going to have access to all of these various financial products. The

challenge is, how do you do that in a regulatory compliant way? Where is the adoption going to take place? Like, you know, what we're seeing right now with tokenized stock is absolutely fascinating. You know, people aren't necessarily getting, you know, the licensed version of a of a stock. Like, they don't necessarily care. They just want exposure. If you're in Argentina, you've got a stablecoin, and you want to get exposure to SpaceX, you're one click away now, right, from a stablecoin. And so, we're seeing different flavors of these products onshore, we're seeing these products offshore. There's going to be a balance between both of those things, but what's so exciting is, I think this real-world asset theme is now getting to a place that we're actually going to see real-world adoption beyond just, okay, we've got stablecoins working, but all these financial products ultimately need to come on

chain, which is phenomenal for consumer, because before, it was really challenging to put your money to work. There's so many people that had no access to US equity market whatsoever, and now, you know, it's a touch of a button away. >> 100%. Well, we'll leave it there. Everything's going on chain. You got to accept it. Let's give them a round of applause. Thank you.