Web3 Banking | Money Rails 2025 | Polygon Labs

Transcript

Hello, Money Rails. Okay. Alrighty. Thanks everyone for coming. Excited to be here. Super excited for this panel. A lot of good people, a lot of good friends. Um, I'll let everyone introduce themselves very quickly. I'm Jamal. I uh help out with payments here at Polygon and I'm excited for this panel. >> Hi everybody. Uh, I'm Eric. I am the VP of technology at Fireblocks, uh, leading technology research. >> I'm Martin, VP of stable coins at Anchorage Digital, and we work uh, in a bunch of things, but I work on issuing stable coins uh, for companies. Uh, we have Athena, Tether, USA, and most

recently Western Union, and a couple others coming. >> Hey guys, I'm Rafael. I'm COO and founder of Trace Finance. We do stable coin and payment infrastructure in Brazil. >> Hi everyone. Um this is Masimo. I'm with the Mastercard. I look after our global blockchain digital assets and obviously now stable coins uh activities. >> What does Mastercard do? Never mind. >> We I'll get to that in in just a little bit. I'm just milking it. >> They're layer three. That's what they are. Anyway, uh pretty quality folks, some heavy hitters on the panel. So, we want to make this pretty interactive, pretty casual. Feel free to lob over questions, raise your hand, yell at people if you want to. A lot of really

sharp people here with some some edgy ideas and edgy perspectives, and we want to make it spicy. So, uh, yeah, I'll start with the question to Aric. We'll talk about Fireblocks. Uh, so traditional banks, digitized money, web 3 is making money more programmable. We're excited to see that. And obviously, the last six months have kind of shown that that's a a huge topic. So what is the core difference between digitizing finance and rebuilding it natively on chain? >> Yeah, hi. Thank you. Uh so maybe I'll start with like uh just a sentence on Fireblock. So basically what Fireblocks does is provide the infrastructure for financial institutions to build on the blockchain from custody technology to payment technology tokenization technology all the different anything they need to do this and obviously it

goes from banks like actual big traditional banks all the way to fintexs and a lot of other financial institutions. Um, so in terms of like I think basically what happens a lot of times is we're basically the layer below the bank that helps them in the bank situation that helps them do this transition. And so I think the first thing that everybody does is they continue the the same trajectory, right? So they have a process it works one way that's how they used to in the regular digital space and then they translate this and just like use a different database sort of like uh you know in a in a simple transition. the thing about programmable money. So right in regular uh finance you have smart institutions

with dumb money and so that gives you only some amount of options but once you have smart money at the hands of the banks so first they do the same thing but then over time they start thinking about what else can I get right so a lot of the frameworks they have right now are based on the fact they cannot put anything on the money itself but there is an evolution and I think like it actually creates a lot of new interesting questions for example We're automatically assuming that uh the custodian for example right is the bank right the bank is a custodian of the money you have because he holds the keys but in smart money if somebody has access to the code on the uh token maybe they also have some custody

responsibility right so like I think that's part of the things that changes it's not just about the technology the entire paradigm can change because money becomes smart >> yeah just I have a question. What are you seeing uh institutions do with smart money? Like what use cases are you excited about that they couldn't do before that you're like discussing with them? So I think right now first of all most of them just take it you know simple right they take the simple like so what happens today same infrastruct same same process new infrastructure new pipes right that's what I see mostly happen today I think the one thing that people are most excited about right now is identity so trying to connect identity to the assets in a way that

like again allows them to do more things right there's a lot of things that are gated right now in systems because you cannot have identity part of the process in the the money flow. So if you can get identity first of all obviously it can create some things we like less right a different kind of gate waiting but it can also open up a lot of a lot of opportunities. >> Yeah, love that. I actually want to jump to Masimo because we brought up the identity topic which is amazing. Um we obviously announced a partnership with Mastercard we're really excited about.

uh totally agree and I think everyone here would agree with me that identity compliance and bringing more of that infrastructure on chain is a critical step to really getting us to the next level and I think that everyone here on this panel is is doing that good work. Uh but Masimo specifically and I know your broad focus is not just on crypto credential but in general what do you think Mastercard is really doing at its core to see blockchain and stable coins fitting into the existing network that you guys have and where the future of that lies? Yeah, thank you. And um well, congratulations on the on the recent announcement u on the credentials piece.

Um certainly I think there's part of novelty in in that announcement and I think it's a very PR-driven uh ecosystem obviously. So we're we're all very excited about it, but it's it's also nothing new to Mastercard. I guess we've been you know we've seen and we've been part of quite a lot of disruptive waves of changes within that industry. I've personally been at Mastercard for about a decade. Um, that's that's a long time actually now that I think about it. But I've seen, you know, the the rise of e-commerce. I've seen the the the explosion of like neo banks and and the fintech and sort of banking as a service infrastructure. Um, the digitization of the entire economy, right? And so all that to say, obviously tokenization um isn't necessarily something that is

not like completely novel to us. something that we've been through and we've seen and we've we've driven for for a bit of time. I think a notion of of of novelty here is that we're no longer just tokenizing information or we're no longer just tokenizing identity in the case of of credentialization, but now we're actually tokenizing real world assets. We're token tokenizing value itself, right? And that's that's a major sort of shift that we're seeing. But just to take a few steps back, I guess with with Mastercard in in mind to to to to put into a sort of helicopter view perspective, Mastercard has been moving value for consumers and institutions around the world, whether it's B2C, whether it's institutional, whether it's remittance flows. We've

been doing that for 50 years. So when you see a new set of money rails, no pun intended, you can't ignore that, right? If you look at again I was having this discussion with our our fellow um panelists here about five minutes ago. If you look at the S&P 500 about not even 50 years ago about 20 years ago right there's quite a lot of turnover like a majority of the companies that were listed there before are no longer there today. And so what that means is that we need to stay relevant. We need to stay credible and we need to take these new emerging um technologies, these new emerging rails, these new emerging infrastructures as something very seriously as um I believe a train that we don't want to miss and uh and that's certainly what we're doing

at the moment and and we're highly committed to to this space. Um to your point on stable coins, I think obviously we're seeing quite an acceleration in you know institutional and and and use cases driven by the adoption of stable coins. Why that is? I think in you know we've all experienced this in the past 10 to 10 to 15 years I guess within this space there's always been a bit of a gap right there's always been on one side a highly speculative highly volatile highly volatile and and to some extent quite scrutinized asset class right cryptos and the word itself has been sort of scrutinized quite quite heavily but then on the other side you had the blooming promise of blockchain

decentralization trust programmability it's 24/7. It's always on chain. It's always available, right? And so you kind of had these two worlds and there was a bit of a regulatory gap as well in in between those. And I think stable coins are helping. Certainly at my position is that regulation partnerships but also the adoption of stable coin as something that is more familiar that something is more stable in the sense of value is really helping bridge the gap and making sure that large-scale institutions are able to use stable coin as a conduit to get on chain and to benefit from to finally benefit from the benefits of the blockchain uh infrastructure without having to take the risk or to to be

exposed to that to that level of ability. So I think that's really helping uh accelerate institutional adoptions and and that's a space that Mastercard is strongly uh looking into. >> Yeah. No, I mean uh I think the purpose behind naming this money rails is just that we see blockchains as just another payment rail and we see them as a a very hyperefficient, hypers scalable, a global payment rail but it's just that it should complement the existing financial system. it should work really well with compliance, with KYC, with traditional banking because it's that interoperability that's going to deliver the best user experience. And to me, it's just like very very um it's very very exciting to see someone like you guys who is literally, you know, quite

possibly the financial backbone of our entire economy for you guys to validate that everyone here is building towards the right thesis. And we still have to figure out some things. And I think that's why us getting together and exploring different ideas and building together and all these people here are doing that work. But it's just really exciting to see someone as significant as yourself coming into the space and showing that this is really real and everyone here is building towards a great thesis which is exciting. So love that. >> If I I'll light something. So it's interesting that there's this duality in the blockchain, right? So like some people first of all like the fact blockchain is actually like permissionless um means that uh institutions can actually build on it as well, right?

Like and some people that's like weird for them because they think permissionless is like oh it's permissionless to the more anarchist side of the permissionless but then permissionless also means that like traditional payments company can just use it for whatever they want. So there's this duality of use cases that happen where some people think about the blockchain as a very philosophical idea that has a lot of values behind it and meaning behind it which is great and then other there's other people who say oh it's like another rail that I can use and like you know I heard somebody say if pigeons were faster maybe I use them but actually blockchain is faster so I use that you know uh so it's like a very different way of looking at the

blockchain what it can give and I think a lot of the value comes in from the fact that it's such a generic technology that it can actually serve both of these situations which is very cool. >> Yeah. No, I totally agree. I think that uh uh to continue like praising well all of these people but to continue praising Masimo who I love. Masimo is a great guy and uh wait till you have two tequilas and we'll see what happens. But uh no it's just it's not just payments with Mastercard and that's why I was really excited to see it's it's a whole gambit of things and you guys are looking at it broader and more as like a financial operating system which I think is very important. I mean you guys have the MTN network which is a very powerful framework that we're seeing get a lot of

adoption a lot of really good institutional buyin. Crypto credential is a great example. Obviously you guys are getting into stable coin settlement stable coin card issuing and then whoever knows what's next but it's not just payments. And I think that's important that you guys are really seeing this as the foundation. >> Indeed. And it's not it's not just payments, hence you know money rails, but essentially value rails, identity rails, you know, rails of it's the tokenization of everything on chain or on a new set of infrastructure. Um, but interestingly, and this is something that I like to mention in in in these types of of conversations, although it took large institutions a while to, you know, get with the program, let's say, and that's totally normal. uh including Mastercard. Obviously, I'm not shying away from that. But funnily enough, you

know, the original Bitcoin white paper, the title, and you know, I don't want to be quoted here because I can't remember by heart, but it's essentially like a peer-to-peer electronish cash like payment system, right? And so, like payment is at the core of the original thesis of this entire movement. And so this is something that again reinforces that you know there's no way to look at it in a in a sense that we wouldn't want to adopt it in some kind of shape or form. It's just a matter of how we really bring it to shape in a compliant trusted and safe manner. But also I think because I'm not a I'm not a tech deep person and I think sometimes that's a good thing. Obviously this is this is quite a

complex industry but I think to look at you know this set of new technologies in a way that solves for real life problems is really what we need to do here right it's like nobody wants to swap and bridge and go from L2s and and and manage seed phrase that means nothing to a lot of people right however sorry apologies it's the tequila that Jamal promised me however if you're you know if you need to send $1,000 to your grandma abroad in Italy for urgent medical care. That shouldn't take four days, five corresponding banks, and $50 fee to get there. If you want to take your girlfriend out for a slice of pizza and a Coca-Cola down the street, you should be able to pay that with your

self-custodial MetaMask card and it works. Or your future Polygon Mastercard card and it will work, right? if um I don't know in the future you want to mortgage a house and use your collateralized credit on more for a like these are things that solve for real life problems and it makes it real and and I think that's an important piece of like large scale adoption for for what's yet to come in web 3. >> So you're saying that if I get a MetaMask card I'll find a girlfriend to go take out for pizza and coke. Is that what you're saying? >> And get a mortgage. >> And get a mortgage. I'm >> I'm saying if you get a MetaMask card you can finally pay for those tequilas that you offered me. That's the missing piece. I didn't realize it. Okay.

[laughter] Uh so to Martin, um I want to ask a question more about some of the traditional banking rails, how we're seeing it converge because it's obviously our opinion that money rails or or blockchains aren't a replacement to the existing financial system. They're a complement. They're an upgrade. They're an exciting upgrade that's going to supercharge money. So you guys obviously are very deep down the traditional banking stack. You guys work with some heavy institutions. How are partnerships evolving with these banks? And specifically, are we seeing collaboration? Are we seeing competition? Are we seeing convergence?

How do you see the the two worlds living? Yeah, so um an introduction of Anchorage. Anchorage is a custodian. It's been a custodian since 2017. We've gone into a bunch of other businesses lately. And the way we position ourselves is we have one foot in crypto, one foot in Trafi. That means you can hold Bitcoin with us and we support some of the largest DOTs and ETFs, etc. But you can also hold fiat with us and you'll hold the fiat underlying right now with Bank of New York. Soon we'll have a Fed master account. So we kind of have those two legs. We mostly work with very large institutions. Uh most of my time is spent improving the rails for stable coin issuance which means I touch a lot the tokenized asset space RWAS.

We're the largest buyer of RWA in the space. We hold some in polygon as well and we're also a big consumer of 247 tokenized cash right so um most of the banks are looking how do we play in the space and how do we sell to these institutional clients of which we are part of what we see is I don't see a migration where they're going to reap and replace their core banking system that's too risky each time it happens there's an issue so I think it's going to be like a two parallel track they'll have products for crypto companies and I think a lot of the growth is going to happen on this path but the traditional uh like fiat system fed wire uh swift will continue to to exist and it's going

to be a slow migration at least in the US I think outside the US that migration is going to happen a lot faster right so uh if you work with dollars outside the US you realize the big pain that that is and how stable coins are 10x better so I think that's where you're going to see a lot of that growth and most Most of the large banks, every GC, I would say every super regional like top 20 banks in the US, they are seeing there's a deposit growth opportunity and if I don't play with the stable cocoin and I don't market this product, JP Morgan and Bank of America are going to win it and not me, right? So there's a like a race and I think the key day was July 18th this year when Genius passed. That was the signal, okay, you

can now start really getting into uh into this game. So, it's it's super exciting. I think next year, this year was the year of like the stable coin RFIs. Next year, you're going to start start seeing some like real very large announcements. And I think next year we're going to close, I would venture to say a trillion dollar in stable coins by end of 2026. >> I love it. Uh we are all getting our matching July 18th tattoos after this just to signify the big day. But, uh no, I mean uh I love that. I want to I want to double click into that a little bit more. Obviously, you guys have some of the best regulatory infrastructure in the space, a very established brand, really, really robust banking infrastructure that's available. You

guys obviously just got the Western Union deal, which is super, super exciting. You guys are touching a lot of the direct customers. How do you think all of that that you said trickles down into the user experience? What do you think we can expect for our users to to look and expect and and you know, what what do we want to deliver to them to make sure it's comfortable and easy to to tap tap into this? I think for the next couple of years, you're going to see like a separated crypto and fiat experience. Um, I think that the tangible way this is going to materialize is you're going to start seeing like a QR code in your app where you can deposit stable coins and you're going to see a stable coin balance. I think there's going to be a period of time where fiat and crypto are

segregated. But where most exchanges are landing after doing that for many, many years is we needed a unified dollar balance. And essentially they're going to say, "Okay, Western Union USD and USAT and whatever any genius stable coin, I'm going to take them one to one and I'm just going to give a dollar balance to the client and I'm going to manage the the the complexity in the bank doing treasury management. Uh the same way that treasury managers today have bank accounts at 10 different banks. And yeah, technically you have a liability to Bank of America and a liability of JP Morgan, but you see dollars in your balance sheet, right? So you're abstracting that away. So I think short term we're going to see a lot more

crypto experience. It's going to be enabled in a lot more trapy apps. Um but I I would say in the next five years I would expect the crypto part to disappear in in under the experience. >> I want to ask a question about that. So um I think it's an like the unified balance is a totally interesting approach, right? But the concern I have about this would love to hear your opinion is the risk factors, right? So like you have like you have your bank account and initially it's like USDC and USDT and at some point it's like USD XRL and you're like what is XRL? I don't know but in my balance and suddenly USDXRL depects right because like how do we make sure unified balance is both a

great UX but doesn't create a situation where we inflate a feeling of I have just USDC but actually what you have is like some extremely risky derivative of using USDC in a lot of collateral loans like some things that happened recently. >> Yeah. So, first of all, what you what tokens you accept in this unified balance matters. I think the way that most are going to go is say, okay, if you're genius compliant and you're not doing anything weird, I think you're accepted on the unified balance, if you are a tokenized hedge fund that has a that happens to have a nav of one, you probably are not going to be accepted.

That said, even genius compliant stable coins are not all the same, right? like we've seen bank stable coins that have underlying uh cash at risky banks. I think we're going to see a stable coin explode that puts all their money in a bank account that pays them a little bit more yield or um a bank account because they don't have access to other bank accounts. So, I think that's going to happen. The other thing that's going to happen is you still have to manage the stable coin correctly. The fact that you have a stamp that's genius compliant doesn't mean you know what you're doing and an infinite mint attack is still a possible attack vector. We had a like a near miss recently but like um th those things can still happen. So I think each

app when they create this unified balance they have to say okay I'm going to accept I don't know maybe you say okay the ones issued by anchorage I accept and I also accept circle and I also accept the backos ones but I'm not going to accept I don't know whatever issuer uh that I don't trust enough. So you're going to have some that you accept. Uh and in the end it's going to be the treasury manager to manage that risk in the underlying and maybe they say out of all of these that I accept I want to park it everything on I don't know Western Union USD because that's the safest according to my opinion. I don't want to sound like the Mastercard police is in the room, right?

But I I I fully agree with this not only the question but but the answer but again I think underpinned by evolving regulation I think regulation and then compliance oversightes and and these sort of things will help also sort of bedrock um these types of of of accelerations into stable coins and and the risk factor um in a significant manner. Right. So I think you know it it comes with a price I guess but uh >> and and by the way this is not only regarding which stable coin right it's also which blockchain right so like if you have USDC on polygon >> I thought that was obvious that it's easy question >> yeah right like it's it's important like uh oh it's on a blockchain that now like it was a single server blockchain disappeared all of the balances of that

blockchain >> sain turns off for 24 hours yeah >> on that is sorry I don't want to take the moderator, right? Like are there like are we because obviously we're seeing a boom and we're discussing, you know, acceleration of stable coin, adoption of stable coins, you know, growth of of of multiple layers of infrastructure um you know, coming to the forefront of the economy. Is is is it do we think it's going to be similar to any wave of innovation whereby there's a lot of newcomers, there's a consolidation and then there's a key set of few winners. you know, some mergers and acquisitions, some get absorbed, some fail at high rate of failures. Is there are we in that phase where there's, you know, stable coin everything and, you know, chains

everything and there's going to be a strong consolidation or are we going to see something different this time and and and a bit more, you know, decentralization in in the use cases? >> And the last question I want to add on to that, how do we see interoperability, right? Like if I have five stable coins, I want that to be under the hood, but I want it to work seamlessly. So, how do we make all of that work nicely together? >> Yeah, I would say there there's different like uh services in the value chain, particularly on the stable coin issuance where like I have a little bit that's where I spend my time. I think we're going to see thousands of stable coins and the the the market dynamic is going to be probably similar to banks, right? In the US, you have 5,000 banks

and essentially stablecoin is a way to run a bank where your marginal cost is a lot cheaper. you come to us and for a very like cheap price you get your own stable coin. I think if you are sitting on more than hund00 million dollars of cash you should launch your own stable coin right so the bar is very very very low. So it's like not just the JP Morgans and the Bank of America it's also Chipotle should launch a stable coin and uh Pizza Hut probably should have their rewards given in stable coins as a way to get people to repeat their purchases. So like the the tail can be very very very very long, right? So I think we're going to see thousands. On the flip side, I think if we talk about blockchains, I think there's going to be a lot of consolidation on the blockchain

side because in the blockchain, who accepts your blockchain really matters and adding and more and more blockchains is actually very hard. So I think on that one, we're going to see a consolidation of like a handful of winners. Probably similar to like the cloud market, right? You have AWS, GCP, and Asher. and it's like three that that kind of win. >> I think we will see like I agree we're going to see the explosion of stable coins, but I actually think we will see a consolidation back afterwards. Don't know how much time it will take. Uh because first of all, a lot of the rails we have on the blockchain right now, they're not really a good fit for like a thousand uh USDC stable coins, right?

like liquidity pools, indexes, there going to be a lot of attacks because you will not have enough liquidity and somebody finds the chain where you can attack liquidity of a specific stable coin, disable it. There's going to be like I think there's a lot of assumptions in how things are done currently on chain uh where basically we assume that there needs to be quite a lot of liquidity. You want a bridge, some solver needs to be on their side of that bridge to complete you. they're going to support a thousand stable coins like like there's a lot of things that will not add up. Now maybe it is solved by a lot of unified stable coin kind of like mechanisms but I kind of think actually the market dynamic will first let everybody launch their stable coin

then they get the headache of managing liquidity across 50 different chains and then they say okay maybe never mind I'll go back into like you know an existing one. Yeah, I would say that the there's a couple things. A, DeFi was built in a capital inefficient way because you have tokens that can essentially subsidize that. And I think a lot of the primitives on DeFi assume there's people that are getting incentives that provide capital that are nonsustainable over time. Second, many of the stable coin issuers don't care about DeFi. Like Western Union is not going to like create an a pool for for Western Union USD, at least as far as I know. they care about using it for payments. So a

lot of the of the de like defi is a market in itself which is a subset of what everything that you can do on uh on crypto. And third I think like all of the challenges that you're saying are opportunities for founders to come in and say let me reimagine a but knowing there's going to be a thousand stable coins issued by three issuers and like you can swap between them going to the issuer. Um I think there's an opportunity to reimagine a lot of the infrastructure we have in spa in the space knowing that now you have a lot more entrance uh kind of coming in. So yes I I agree that said I think we are very defi focused right now because that's the big thing in crypto. I think DeFi is going to be less and less like

if you talk to most people they don't interact with the like trafficy infrastructure to like do stuff they most of their day is just payments. So, so just to make it interesting, uh I think they do care. Why do I think they care? And I didn't talk to them. Okay. I think they care about two things. The first thing they care about is not to be in the middle of some attack on their stable coin, right? Because if like, you know, like they don't care, but they kind of don't care as long as everything works okay. And if something doesn't work okay, then like it's a big problem for them. So like I think for that reason they do care about the mechanisms that exist on the blockchain even if they're not participating in them right even if they don't necessarily choose themselves to participate they put their

money in an ecosystem that has some primitives that they have to consider so I think that's like one thing they care about right like they don't want to be >> you mean at the blockchain level exactly or at the D5 protocol level >> at the D5 protocol level right the fact that like you know DeFi exists already has some impact on them when they're on the blockchain, even if they didn't choose to do anything with DeFi. I think that's number one, right? Number two, um I think that the fact that they come into an ecosystem that already has a lot of this innovation happening and they're not coming as the decision makers of that ecosystem, right? Like banks are not the decision makers on what happens in DeFi. So they are actually in a

situation where their competition between themselves which they care greatly about is in conditions where one of them might decide that they are willing to do DeFi. And if that one gets more traction to their stable coin because they are willing to do an a morpho is something right suddenly the other one comes in and says wait a sec I'm getting beat on chain I need to also support defi and so pretty quickly they're like we need to support defi right so like I think this is actually something amazing that the opening of innovation in this space not being controlled by the legacy ecosystem forces them to adopt things not in their

own pace. I agree with that and and coming from a legacy point of view I guess uh although we're a highly innovative global payment company um I shouldn't laugh when I say that actually um I don't think legacy is is a general word but I I don't think legacy or you know existing infra like large scale global existing infrastructures are in a position where they can innovate within this neo space without actually stitching together with exist like with with partners that are crypto native or that are blockchain native right I don't I don't think we can build on our side try to be competitive and then push that out onto a market that isn't ours anymore right it's a market that we need

to build credibility into and I'm not speaking only Mastercard here but you you were mentioning large banks etc and between those two and we've seen the same in in the sort of fintech era let's say or the digitization of of the financial system players that are going to come and supply for that infrastructure gap, right? So players that are going to and we're we're starting to see it today, right? In fact, there's there's some of those in in the room today that I was speaking to, players that essentially connect the dots between the old systems and you know, onchain and offchain, DeFi and Treadfi, etc., right? Or in the case of of stable coins like these stable coin as a service platform you were mentioning, you know, obviously a JP Morgan launching in stable court. I think they can hire build and buy them

themselves into it credibly so. But Chipotle, as you were saying, maybe not, right? Maybe that's not their close enough to their core business. So, they will go to providers that essentially are helping them build that infrastructure and and and make it credible for them. >> Yeah. I want to get my man Raphael involved for sure. Yeah. Yeah. Yeah. No, I love it. We uh we need another panel after this. Yeah. Um Rafael, I mean, Trace Finance, I see you guys as a monster in LAM, you guys are one of the closer ones to the cons consumer. You're in the trenches a little bit. Uh you guys are doing monster volume. You guys are doing great work. Um you know everyone's talking about you and all that's great. So as as you are in the trenches I want you to tell us a little bit more about how we are balancing some

of this compliance with the user experience as well as with decentralization. How do we remain key to the ethos of crypto? How do we make it a truly open equitable financial ecosystem that everyone can participate in? But how do we deliver a brilliant UX that also maintains compliance? >> Yeah, perfect. Thank you for the words. But uh at the beginning we started as a web two company. So we were doing crossber operations for PSPs in Latan especially in Brazil and uh we were moving a lot of money to US, Europe, Asia and uh we realized that we were sending money for to Hong Kong, Singapore and other geos and the money will take two up to four days to arrive there and uh it was so inefficient and

uh we started to look for in crypto solutions and uh we we are also backed by circle and other crypto folks. And then we started to do the cross body operations use crypto UST, USDC on the back end. And uh doing that we were one one of the first first movers in Brazil. We were able to got a lot of volume. So in the last 12 months we processed more than five billion dollars only in TPV uh doing crossboard operations for Shane, TEU, Meta, Riot Games, Amazon, all those big logos. And uh we realized that the KYC is totally different now because operating with legacy banks you need to do the KYC with the Brazilian bank all

the correspondent banks there is a lot of bureaucracy on that nowadays we do the KYC on the on ramp of RAM validate all everything there but when it is on chain is much more easier and faster you just need to check the wallets and the small things so we see a great huge opportunity there and uh we do think that in the next couple of years the way that we transact money globally will be totally different as we see today. What what kind of trends are you seeing on that side of the house as you are kind of someone in the front lines a little bit more? What do we need to be paying attention to? What do we need to improve? What do you think is like the best next step there?

>> Yeah, today we have everything 24/7. So you have communication 24/7, you have information 24/7, but you don't have settlement money 24/7 even in the same country. In Brazil, we do have pigs that's 247 for free. But for example, in the US, if you want to settle with someone, you send a wire, the money will take 30 up to 30 minutes to get there. So, and uh I see nowadays we don't have time to wait. We need everything 24/7 instantly at the same time. So for me it's the main difference that I see in the today.

>> Uh and if you had to last question then we'll move on but if you had to rebuild anything out of the stack that you're using what do you think is the most like top priority for us to fix or try to disrupt or try to upgrade or whatever you want to call it. >> Uh I would say the intermediaries. So I would take off the all the intermediaries. uh everyone want want to deal with one company and I I would say in the future everyone will deal everything will be decentralized and everyone will deal with each other no intermediaries that would be cheaper as well and uh yeah for me the main pain point here is the all the intermediaries that we have today on the market.

Yeah, I I do think that CPN can be a a good solution, but not only CPN, uh I think my for example in Brazil you have a lot of capital control. So you can't have Brazilian highs outside Brazil. You are all you are able to have US dollars in Singapore, in Hong Kong, in Europe, but you cannot have Brazilian highs outside Brazil. And uh that's why we are thinking we we will launch our Brazilian high stable coin because we give access for global companies to Brazil high. So yeah, >> it's uh just I just want to say I I firmly agree with what you said earlier.

Well, all of that you said, but just coming back to what you just said earlier. It's it's crazy to think that we live in this hyperdigitized world, right, where the consumer expectation is so insanely high. They want instant gratification. They want slick UIs. They they they want and they get they want one-click checkout and it's all real time. Except when you look at the financial ecosystem and the like the actual traditional financial industry um for all the good it hasn't evolved all that much, right? settlement happening on Wall Street hours in batch.

You know, that's that's crazy, right? So, so these are these are the the very clear use cases for why institutional and and mass adoption needs to happen within blockchain within this tokenized ecosystem with stable coins or not. It's because it's it should have been solved already a while ago and and and honestly, it's not up to par with what the consumer expects in a world of today, right? It's not it's not something that we look at in the future. It's something that is an an expectation for today, >> but but it's kind of happening, right? So, we're working with some of the largest names out there to solve the 247 problem. So, whenever people come and redeem I don't know 300 million of a stable coin, they want their money immediately, even if it's a Saturday, right? So, we went to our like large

vendors and we're like, hey, I need you to give me 247 deposits. I need you to give me permissionless deposits that I can at least move inside of Anchorage between Anchorage clients so they can settle and I need a redemption facility from your securities into the 247 deposits. And that's what we're working on. Of course, it moves fast for finance but slow for crypto. But I I think end of 2026 we're going to see stable coins that don't require cash where you can redeem more than 50% of the TVL of the stable coin on a Saturday into cash. And I think like after July 18th many of the banks got the news okay I have to actually solve these problems because if not Anchorage is going to move to

another client or circle is going to move to another client right so um I think that message is starting to land and right now folks are seeing okay how do I actually solve this problem um but but I'm very positive that it's going to get solved course there's 5,000 banks there's like six gives >> most of these gives are looking at something to do so I I think at least one will have a solution that we can buy and procure uh at some point next year. >> So I want to do a quick speed round. >> Can I do a curveball on them?

>> Yeah. >> Can I ask just one? A quick one. A quick one. >> So uh you have a bank and a payment company. Which one goes first? >> The intermediaries >> because I think like >> no just trace finance will acquire both of them. That's what's going to happen, right? Yeah. And actually we are just with a Brazilian bank to acquire a part of the bank. Yeah, today it's still very important to have a bank behind us. So >> it's because I I think like we're all want to have no intermediators, but then we're like, oh, but actually I do want protection of my money. I need somebody to do this and then oh wait, I actually want this to go fast. Oh, wait a sec.

How do I connect this to this merchant on another continent? Like so I do think there will be changes. uh I'm just not sure exactly how they're going to be changing because actually every one of them has some role to play and we need to understand how we actually solve for the purpose not just is there or is there no intermediate >> yeah I think that the power of the blockchain is not that you remove the intermediary is the power that you could remove the intermediary if you wanted to and that keeps the intermediary in check if I want to charge you 500 bips to do something you're going to be I'll just go do it selfcustoally and I'll figure it out right so it forces consumer surplus across the value chain all the way to trace finance all the way to the

user of trace finance right so I think that's the biggest power some of the places that I think are now set in stone that where the intermediary is not going anywhere stable coins right stable coins require an OCC charter bank to be the issuer qualified custody uh I think anything that's uh payments where you have fraud protection fraud is not going anywhere Um, I think any anything institutional, all retirement accounts or anything that's kind of regulated where you want to you don't want to give a monkey a machine gun, right? So, crypto is kind of a machine gun. You can do a lot of good stuff, but you can also kill yourself and basically lose all your money. Uh, so I think there's a bunch of places where intermediaries are not going to be disrupted, but you can

start a competitor very easily with crypto, whereas you couldn't before crypto. And that that's what where the value where margin compression happens all the way to the end user. >> So I want to do a quick speed round. I'm going to do 30 seconds a piece. I want you guys to each talk about how you guys see the future of partnerships and how important partnerships are for whatever you guys are building and how you see the collaborative effort. All four of you guys are brilliant people and uh you guys all know each other. We're all friends which is why I love this. But how do we see all of us working more closely together and how important are partnerships in this whole thing? quick 30 seconds per person.

>> I'll start and I I love partnership. I speak about partnership every time I get up on stage. I think nobody gets anywhere especially in a hyper complex, hyperintermediated and um and and and fastmoving space as as as this one is. So for anyone on this panel uh just so I put my money where where my mouth is and everybody on stage you know please find me because um we're here to build innovation agenda together with partners and not do things on our own and try to disrupt the space without uh without with the right partnerships. I think in terms of where where we see the the f the future or I think what what needs to happen or or some general like I don't know you know words of wisdom I guess it's um I think this you know the winners are the ones that help solve

real world use cases and you know solutions in web 3 really start coming to mass adoption and scale when it becomes intuitive like the UX we were discussing needs to become intuitive not complex when it's trusted when it's transparent but especially when that entire technology and infrastructure becomes invisible. No, like nobody nobody again wants to bridge swap and and chains and all this stuff. People want to earn, burn, pay, send, receive, explore experience, right? So when the technology, you know, whether it's on blockchain or treadfi, whatever becomes a completely abstract and invisible part of of those solutions, that's when we're going to see mass adoption.

>> Yeah. Uh I think that just one single player, he won't change anything. Uh the only way that to improve the financial market is having all those big logos here and working together and improving everything that they can and uh doing that they and their user he will have a much better experience cheaper and fast and yeah I think uh this is a hyper competitive industry. You have to pick a lane be very good at it and then buy everything else. So you need to understand what your asset is and what you're not going to be good at. Um and yeah the the rest you should procure and that procurement forces your vendor to be very very good.

>> Yeah. Could I >> are you saying you're in the market for companies? Do people need to come approach you after this? >> Yeah. How much you offering them? Never mind. Yeah. No, actually I agree and I wanted to say something similar. I think there's a theory that says companies should only do things that they're going to be either the best or number two at. Right. And I think we're there for our core things, right? For anything that fall outside of that like if you cannot be the best. So giving like a third grade solution when somebody else else is actually amazing at it is uh just doesn't do doesn't provide a good product eventually, right? So like in all of those things where somebody else is a real expert, you should be partnering. And actually in our

ecosystem, there's a lot of really hard things to do, right? Like there's so many hard problem fields that there is no single company that can be really great at all of them. So >> we we talked about a couple of them now. Like what happens when there's a thousand stable coins? What does a do? How does an exchange manage that? Like many of of the smaller banks come to us and ask us, okay, what should I do about crypto? Because I've done the math and if I accept USDC, I don't make any money. So what what do I do? And that's that's a big question that they that they should answer and someone should answer that question. uh for them and sell them a service. I I think there's a a lot of like new blank space and new problems for folks to for folks to

solve. Um >> yeah, we have a few seconds left, so I'm going to do this. You have four very brilliant leaders at some of the most important companies in the crypto space. I want each of them to give you one word of what to pay attention to for the next 12 months. No pressure. Uh and then I encourage you guys to to mingle and meet some of these folks and talk about new trends. But in our last couple seconds, one word, one topic, something that we should all be paying attention to for the next 12 to 18 months. >> Regulation, privacy, >> I like both. I'll say partnership just because >> regulation. Yeah.

>> Yeah. I think the regulation is there. I think it's more like execution like actual shipping of of the products. Thank you all for having us. Uh come have a conversation with these brilliant guys afterwards. Thank you for joining us. We're excited to uh see money move faster at Money Rails. Thank you.