Unlocking the Future: Embedded Finance and Stablecoins with Edward Woodford

Rutger Van Faassen (00:01.686) Hello and welcome to another episode of Banking on Information. Today my guest is Edward Woodford who is CEO and co-founder of zerohash. Edward, welcome to the podcast.

Edward (00:13.71) Thanks for having me. Rutger Van Faassen (00:15.552) Now always start with the same question for everyone.

So here it is for you. Why do you do what you do? Edward (00:22.877) So I think firstly, I love it and I enjoy it.

What I think what initially drew me in was just the passion for the technology. And to some degree being a little bit counter counter trend in 2017, people I think have a completely different sense of what crypto and blockchains were. The questions that I got asked were, why? Why are you not you're not just moving funds for drug dealers?

And to me that presented a massive opportunity because you're taking a positional bet that the dominoes would fall. That's what I think really dove into the space. I think if I answer the question now, why am I doing what we're doing? I think for us, it's really driven by a passion for, again, the technology that blockchains can make things easier and cheaper to transfer value internationally cross border.

And tangibly what that means is it can allow the paradigm through which we start to think about the world to be adjusted. So for example, we are all paid every two weeks, every month. You're effectively providing your company with a loan. If you can make payments cheaper, quicker, you don't need, for example, payday loans.

You don't need a lot of this infrastructure. And so you can bring enormous value and you can start to break down the paradigms that we see as as solid today. So Rutger Van Faassen (01:47.916) Mm-hmm.

Edward (01:48.012) fundamentally, it's a passion for the technology and how it can be applied to a whole set of different industries, different asset classes and different pieces of the world. Rutger Van Faassen (01:57.824) Yeah, no, that is very, I can see that you're very passionate about it, about the technology, but especially what the technology can do.

right? And where blockchain and DLT can help us make things easier, better, faster. So that's a great WHY. Now, what would you say is the number one use case that you solve for?

Edward (02:13.39) Yeah. Edward (02:18.882) Yes, we basically allow people to embed both crypto and stablecoins within their infrastructure stack.

And the commonality is that we abstract away complexity for both for merchants effectively or for companies to embed this technology. And that means tangibly is that we abstract away regulatory and compliance complexities, and we abstract away technical complexities, maybe to make that more tangible. For example, if you're a company looking to accept stablecoins, and we now do this for large brokerage firms, large clearing houses, large gaming companies, stablecoins, there are many stablecoins across many chains.

And so if I want to receive a stablecoin on a certain chain, I have to spin up a unique address for that stablecoin. That is complex to do at scale, it's complex to do across many, different permutations. And so we abstract away that complexity from a technical perspective. As well as a regulate group perspective, we're handling all of the nuances around on-chain transaction monitoring and other pieces.

So our core is to make what is incredibly complex, incredibly easy to embed. And that is the commonality of our business. Rutger Van Faassen (03:26.016) Yeah.

And that I think you're, you're, You're having two things come together there that are very hot today. Right. So stablecoins, embedded finance, those are two big themes right now. and, and I see them both sort of come up a lot and actually bringing them together, I think is quite useful because for a lot of people, crypto blockchain is still a complex thing.

Right. And then even like, is it what, what's the regulation around it? How do I do it? So having someone that can actually make that complexity easy for you.

That sounds like a great way to help your customers. Now, when that goes well, how do they talk about success? What do they say about you when you help embed that for them and they get the outcome that they're looking for? Edward (04:09.

23) Yeah, I think success opens up a new total addressable market or TAM for our partners. So if you look at, for example, our account funding product, what that does is it opens up new customers, new segments, new abilities to fund an account 24-7, 365 instantly. And so when you talk to some of our customers, whether it be a regulated brokerage firm like Tasty Trade, a regulated clearing firm like Caoshi, or for example, BlackRock's Biddle Fund, if you talk to them, What you're effectively enabling is a mechanism to fund the account and in particular across weekends or at nights.

And so what it's opening up is a complete global customer base where previously there wasn't, at least not easily. Secondly, an ability to do this instantly 24 seven, three, six, five. And if you look at the macro trends, value is moving more quickly. There are 24 seven markets now.

overnight trading is increasing people's desire to trade and to transfer value is increasing. And really the payment rails haven't kept up. And so by providing the payment rails and infrastructure to enable for instant real time 24 seven movement, you're opening up an entirely new market. And for us, that is the commonality of what our customers say is that you're opening up a new market, you're allowing my customers to trade crypto, that's opened up a new market that I couldn't tap our payment products, accepting payments globally instantly.

So that's really the commonality is we open up huge new potential revenue line items for our partners. Rutger Van Faassen (05:42.838) Yeah, no, I can totally see that how before there was a constraint. right?

Of like, hey, when the bank is open and when the rails are actually transacting and now basically taking that restriction away will allow a lot of people do things that they have never done before. So that is super powerful. I could see how people are excited about that, where you're not just replacing what they used to do before. You're basically sort of saying, no, I'm actually taking a lot of constraints of what you used to have.

Edward (05:49.825) Thank Rutger Van Faassen (06:09.804) And now there's this whole new world that you hadn't even thought about. So start thinking about what you can do now.

Yeah. I love to do this thing called Futures Thinking. Now, no one knows what the future is going to hold. We don't even know what's going to happen tomorrow.

We'd like to do this thing where we think 10 years out. right? So that's quite a bit 2035. And I know a lot of like the stablecoin blockchain, everything you're doing is already, I think right now considered cutting edge.

Edward (06:11.256) Thank you. Exactly. Rutger Van Faassen (06:37.

484) Now we're going to think sort of from the cutting edge forward 10 years. Where do you see the world 10 years from now when it comes to what you do? Edward (06:45.944) Yeah, I I think every single person on the planet has crypto as part of their portfolio.

I think that as a percentage of wallet share, stablecoins become a very meaningful part of the global mechanism of transferring value that decrease effectively traditional methods of transfer, what you may call traditional networks such as Visa, MasterCard, Swift. This technology becomes part of our everyday lives without us really considering what that means in the same way that we use HTTP every single day. But most of us don't consider what that actually means. I think that blockchain technology, cryptographic technology becomes the same thing.

We every single person in the world will interface with it, without making a conscious decision of this is the technology that I'm using. So again, it becomes down to abstraction of the complexity to solve a usability challenge, unlocking huge potential value. Rutger Van Faassen (07:49.248) Yeah.

And so you were talking about sort of funding and how we're actually, how many people give a loan to their employer. For example, how do you see that 10 years from now? Do you still see people being paid twice a month or once a month or do you see that changing? Edward (08:05.

132) I mean, I think it depends on where you are in the world and where you are kind of economically yourself. But I think that we will get into a mechanism of, you may call it streaming payments, but I think that, for example, if you're an Uber driver, you may be paid after every single ride instantly. If you are more of a service worker provider, you may be paid daily or streamed payments. And so I really think that the frequency of payments will radically increase because you're driving the cost and complexity down to as close to zero as possible.

And that changes the opportunity. And that increases the global GDP of the world. Right. If you can transfer value more quickly, kind of the use of that same dollar, the velocity of that movement of can or any other currency increases dramatically.

And that's really a huge opportunity. Rutger Van Faassen (08:59.424) Yeah. And what about like cross border?

Obviously that's always the one use case that comes up when we talk about stablecoins, right? It's so much easier, so much faster. There isn't sort of like all this foreign exchange and all the players in between. How do you see that 10 years from now using stablecoins and blockchain?

How is that going to change things globally with global trade? Edward (09:21.238) Yeah, so cross border, you know, the way that cross border payments work today is that you have multiple intermediaries is taking their slice, and it can take multiple, multiple days for payment to transfer cross border. And that's despite us living in increasingly interconnected world, from an information perspective, and from a just a labor transfer perspective as well, right?

post COVID that we've seen this massive acceleration. And so for me, that ability to pay and transfer value, sometimes what we call being able to move value at the speed of ideas is incredibly is an incredible option for this. And so I think that it effectively again, I don't think of the word in binary cohorts, I don't think, hey, this exists, therefore, Swift won't exist. But I believe that it will take a significant portion of the Swift networks value proposition, because it just brings so much more value so much more quickly.

And so as a portion of market, as a part portion of what you may call the wallet share, it will become a very, very meaningful sum, accelerating the ability for us to do business cross border. Rutger Van Faassen (10:33.654) Yeah. Yeah.

And so what you were describing earlier about how your customers sort of have this whole new set of opportunities, I think that's probably also something you're going to see with global trade. right? Where previously would be just not feasible to hire someone to do work for you in, if you're in the U S in Indonesia, because of all the payments that would require. But if you could do with a stablecoin instantaneously, you now might hire someone anywhere in the world to do work for you.

Or before that the system just wouldn't allow for that. Edward (11:03.362) Exactly. Rutger Van Faassen (11:04.

394) Yeah. Any thoughts on how AI plays into this future 10 years out? Edward (11:11.406) Yeah, I mean, look, I'm always...

Look, I'm always conscious of the intersection of hype plus hype, but I think there is an interesting intersection between agentic payments and stablecoins and crypto more generally. If you think about stablecoins and how they can be applied uniquely to AI, there's a couple of core value propositions. The first is the ability to program money. Rutger Van Faassen (11:19.

669) Right. Rutger Van Faassen (11:24.588) Mm-hmm. Yeah.

Yeah. Edward (11:42.414) That makes The programmability of money is incredibly important as you think about agentic payments. Secondly, which I actually think is a more meaningful driver, is the ability through effectively cryptographic mechanism to give authority to agents up to a certain element.

So you can cryptographically program an agent to be able to certain transactions, but not others without certain approvals. And so the ability for an agent to pay on your behalf as a business as an entity as a you know, whether it be an agent doing research and paying a website, or for example, an agent booking, you know, a holiday for me, the ability to embed into that agent, the ability to program, programatically set limits and policies around that is an incredible opportunity.

Secondly, if you think about the velocity of agentic payments and the ability for transfer of information, which is going to be a big part of the agentic story. If you look at, for example, some of the big traditional media companies, they're all getting paid effectively now for scraping that control of information is important. We're going to increasingly get into more velocity of micro payments. And again, that's where the speed and cost of stablecoins really play in.

So those would be the three big buckets of this overlap between agents and AI and stablecoins. Rutger Van Faassen (13:03.398) Yeah. Yeah.

Well, this is a very interesting future that you describe here. Now, if that future becomes reality, what can we do today to get ready for that future? Edward (13:11.694) you Edward (13:19.

874) Yeah, I I think it's about education. I think it's about starting to these things move at incredible pace and often is in a straight line. It's often a stepped function. And so I think starting to learn and read about the space is the core.

I think every single boardroom in the world now of size is talking about what does Bitcoin mean? What does blockchain mean? What does stablecoins mean? If you look at, for example, the earnings calls of the largest banks, the largest fintechs.

in the last quarter, pretty much every single group got asked the question. And so I think partly it's education and working with, I think, the best in the space, which I think includes Zerohash to learn and to experiment. Rutger Van Faassen (14:05.132) Yeah, yeah, no, absolutely.

Yeah, So get informed, learn about what this means. Maybe these bankers have to do some futures thinking as well, right? And start to think about what could 10 years out could happen. And then they realize, hey, we need to get ready for this because it's here.

It's not. Edward (14:21.774) And I think that that thinking comes in two lanes. Typically, we talking about financial institutions.

The first is what is the opportunity for creative growth? But actually what drives a lot of these groups more so is what do we lose? What can this technology displace us in certain parts of our business? And that I think is core driver right now.

Rutger Van Faassen (14:42.474) Yeah, yeah. And it'll be very interesting to see once you are giving yield on stablecoins, how that impacts the traditional savings accounts at banks, right? And the traditional model that they have.

Edward (14:45.048) Finish. Edward (14:53.88) Yep, exactly.

Rutger Van Faassen (14:55.52) Great, well, maybe that's a good point to wrap it up on. Thank you very much, Edward, for being on the podcast. Great, and until next time, choose to be curious.

Edward (15:01.102) Thanks for having me.