Stablecoins: State of the Union 2025

Speaker A: Foreign.

Speaker B: Hello and welcome to another episode of Deciphered, the podcast from Beta Company where we unpack the stats to bring you insights from the world of fintech and financial services. I'm your host Mike Cashman, partner at Bain Co. And leader of our financial services work in private equity. The title of this episode is stablecoins. State of the Union 2025 stablecoins had come a long way from obscure crypto innovation to front and center financial instrument. From January 24 to May 25, stablecoin market cap has increased dramatically from 130 billion to over 240 billion. They now form the connective tissue between traditional fiat Systems and emerging Web3 infrastructure, adding fuel to the fire. Whether it's remittances, cross border settlement or programmable finance, they can offer speed, lower costs and transparency. Cross border payments have emerged as one of the most compelling use cases as stablecoins enable near instant 24. 7 transfers with low fees and greater transparency. Leading payment networks like Visa are now actively piloting stablecoin solutions, signaling a shift from crypto novelty to critical financial infrastructure. Digging to this topic today we have a super exciting lineup of experts from Bain as well as leaders from the industry who do amazing things together. First up, Ricardo Correa, a partner at Bain Co. And expert in stablecoins. How's it going Ricardo?

Speaker C: Very well, thank you. Very excited to be here today. We have, uh, what I've been saying, a full stack issuer, a fintech and a global leader in the incumbent space. So it's going to be a fun session. I'd like to now introduce our first guest, the fantastic Dante Desparte, CSO and head of Global policy and operations at Circle. How's it going Dante?

Speaker A: Well, thank you Ricardo. It's great to be on, of course, uh, this conversation today. I mean, look, one thing for us has been from the moment we launched USDC and launched this company, we have had a commitment to promoting this idea of a race to the top. As you all know very well, and I think as the broad market knows very well, the maiden journey of digital assets and crypto as a category and as a technology has been fraught by peaks and valleys. And we think the only way for us to deliver broadly as a sector, the original promise of the Bitcoin white paper, for example of this global device centric Internet ready medium of exchange and unit of measure and store of value, was to effectively not just have the technology come of age, but to also promote a model in which the regulatory policy environment comes of age. And so by today's regulatory standards, if a stablecoin issuer is unregulated on the margins, and it's because they chose to be. And so that for me has always been a, uh, personal pursuit from the LIBRA project to circle to see the Genius act, for example, come out of the Senate with 18 Democrats supporting it. Uh, the joke could be that twice in my career I've unified Washington, once in their concerns of my prior project, and the second, of course in their desire to regulate dollar denominated payment stablecoins in a framework that would protect the dollar and ensure that this interconnectivity that Mike described at the opening between the banking system and this broader sort of universe of always on money would have clear rules of the road. So that's obviously very exciting.

Speaker C: Thanks, Dante. Next up we have Jay McAvoy, SVP FinTech at BVNK.

Speaker D: Thank you. And yeah, super excited to be here. I agree with you. I think we have the full heist here today. So, um, very well suited. But yeah, again we're still riding that wave of the worldpay announcement against. Great to be here with Cindy, but to give you a bit of background into BV and K. So uh, we're a stablecoin infrastructure provider. So we work with a lot of global enterprise customers and financial institutions to basically integrate stablecoin payments into their stack. So again, like obviously we're working with worldpay, but other customers delocals another customer of ours and also deal, which we do stablecoin payouts for them as well. We're licensed uh, across both crypto and Fiat, so we've decided to go down that route. So we have multiple E Money institution licenses across both the UK, Europe, uh, APAC as well and also into the US processing just under 15 billion in annualized volume. And we closed out our Series B in December last year alone. So hopefully that gives you a lot of a whistle. Top store into uh, BB and K. Yeah, congratulations.

Speaker C: Very exciting. And finally we're also joined by Cindy Turner, Chief Product Officer at worldpay. Thank you very much for joining us. Of course, the announcement with BVNK has been pretty exciting. So perhaps you can talk to us a little bit about that particular initiative and where you see this going beyond just payouts.

Speaker E: Yeah, absolutely. Well, thank you so much for having us here, Ricardo and Mike. We really appreciate it. So, just a quick headline on worldpay. Um, worldpay is one of the world's largest global acquirers. We process two Ah.5 trillion dollars and are the largest acquirer in Europe and one of the largest requirers, particularly in the E commerce market. So it's really critical to us that we're always on the leading edge of innovation in terms of um, being able to support what our merchants are looking for. And in this particular use case what we were able to do with Jane and actually with uh, Circle as well is to be able to facilitate the payouts for marketplace merchants, um, the payouts to USDC via bvnk. So we really excited about that use case of push to wallet. What this facilitates is that a marketplace, any type of marketplace, Etsy would be a good example is able to expose to their sellers the ability to get paid via USDC which can help facilitate cross border broadly. The two use cases that we're tracking most carefully for stablecoins are push to wallet from a payouts perspective and then also settlement which is a Treasury use case. The third use case that we see probably a little bit longer tail, would be on the consumer side to actually pay with um, stablecoin, but we're certainly uh, monitoring that as well.

Speaker B: Thanks everyone. Maybe quickly. At Bain we often use a technique that we call answer first. This is a hypothesis that's built up from both facts and experience and would love to go around the horn with this group here and give the quick answer first in a 32nd or 62nd take on stablecoins. I think especially given all of the hype cycle that we've seen around uh, digital money and crypto in the last couple of years. Key question really stablecoins, is this another wave of a fad or are stablecoins really ready and here to take payment volumes away from traditional finance, from banks and from existing payment rails and schemes. I'll start with Dante.

Speaker A: Killer Apple. There's my quick answer.

Speaker B: You didn't need 30 seconds.

Speaker C: He's ah, he's kind of an A1 student.

Speaker D: So yeah, I think I would just say most definitely the proof is in the volume of what we're already seeing today and we're scratching the surface.

Speaker E: Yeah, absolutely. I think from the world trade perspective as well, we're very bullish particularly as a displacement of these treasury use cases disrupting cross border.

Speaker A: Well and then if I can. So presuming there's a follow on to that question is, and this wouldn't be fair of us to be on a Bain uh, conversation if we didn't also describe the strategic implications for industry and business where the Internet was a genuinely disruptive technology. I've always thought of blockchain based activities finance just being one corner of the activities blockchain supports. But obviously in the payments context, I think of it as an augmenting technology. It is to go places where money cannot go if it were just brick and mortar and to effectively overcome the I think what is a well known problem but for which there hasn't really been great outcomes, the walled garden problem in payments. And I think what we're showing in the conversation and by the industries and the companies represented on today's discussion is that through the idea that stablecoins become tokenized money, blockchains become rails and financial infrastructure that's universally accessible and open for little more than a basic Internet connected device. So then if you're an incumbent, a payments incumbent or a bank, you're not necessarily disrupted in this business model. You have an opportunity to augment your business model by plugging into what is effectively programmable and composable finance. A lot of companies and institutions are now figuring this out and therein lies in my mind the strategic opportunity with blockchain finance and with payment stablecoins is you're going a place where a bank could not go if the bank was just in brick and mortar.

Speaker C: Yeah, that's well placed. Thanks, Dante. I suppose there's a lot of momentum over the last several months for reasons that we'll touch on. One thing did strike me just yesterday, perhaps pouring a little bit of cold water on the killer app which was BIS's yearly uh, report and hun the chief economist there or head of research talking about three key properties of a monetary system that stables just do not address being elasticity, integrity and singleness of money. So just to have a quick discussion around the horn again, you know, how do we feel about that? Of course, you know I've been around the BIS for many years, Dante. I know you have as well. We can look at some of those things and we can solve them technically perhaps, and we're seeing some of those solutions emerge. But perhaps if we could talk about the Q1 singleness of money. This is a really key property. So maybe we start with Cindy on singleness, how you're seeing kind of the flow of money. You're using USDC today, which is fine if you're within, quote unquote, a silo, one instrument within one rail. But what happens here where we have what we're calling a Cambrian explosion of many, many different coins. How is this going to work and how do we get to singleness?

Speaker E: Yeah, I think we're carefully watching which coins are going to scale. Our view is that we want to allow for merchant choice, so we want our clients to be able to choose. That's why we're working with third parties to facilitate this. So we're not going to issue our own coin and we're not going to try to drive the volume to anyone in particular. We want to be able to support merchant choice and recipient choice in what coin they would bias towards. So we're intrinsically always going to lean towards supporting the market, really.

Speaker C: I'll come back to you on issuance in a second because of course the fiserv announcement also kind of was pretty startling. There's at least one announcement every hour. I know that's really provocative, but I can't go to sleep because I'm like sleep for four hours because I'll miss stuff. But Jane, on the singleness, any views there? Uh, in terms of how you guys are thinking about this?

Speaker D: Yeah, so I agree with Cindy. So we're stablecoin agnostic, blockchain agnostic from that perspective. So we'll offer all of the major ones and we'll really kind of take direction from our client base. I do say that. I say we're in this world of everybody seems to be launching a stablecoin at the moment. You've heard of Walmart and every other sort of big enterprise like Amazon is thinking about it and I see it as. It's very similar to the days of everybody was becoming a Neo bank and then we did see a lot of consolidation within that era as well. I do think there will be a trend and it's really about what's the benefit of using one over the other. We're seeing that sort of fight with the networks at the moment that they're trying to incentivize coins to run on their network over another. And I think again, it will be down to the benefits of using circle over a different stablecoin in the market. And obviously they have the benefit of being MICA compliant as well, which is a huge benefit for any users.

Speaker C: Yeah, good point, Dante to you, Singleness. But I'd also love to talk about elasticity. Uh, so we'll start singleness and then elasticity. This is an important point.

Speaker A: Yeah, I mean the banker doth protest too much would be my quick comment. I have deep respect and have engaged directly with all of the major central banking sort of community and interest around the world. The Libra project gave rise to a thousand central bank digital currencies sort of being promoted as a payments model around the world. And thus far the model has not number one, withstood the test of market adoption and number two, it hasn't withstood the test of how to promote and protect and defend the two tiered banking system. And so if you look at the markets and crypto assets framework, mica, it is a operating model and a regulatory model that protects the deposit base of the banking system even for non euro denominated stablecoins. And so Circle is a compliant company under MICA out of France and in Europe, stablecoins are near uh, peer to electronic money. The payment stablecoin legislation that would come online in the United States would uplevel the standards in the US to a similar framework. So in that model you're building an entire value chain that respects the role of the central bank and their otherwise historical invisible hands, which I would argue they should keep, especially when it comes to payment systems innovation and competition that respects the rules of money itself. And then secondly builds clear partnerships and those other pillars of trust in a free economy, which is the banking system. But if we really want to acknowledge what stablecoins have done, is that where they are regulated you could show that responsible innovation, financial inclusion and protecting the integrity of the financial system are no longer tradeoffs. I don't know of a better innovation that could do that at the type of scale we're describing. But I think as long as the argument remains fear based amongst central banks and amongst many m banking interests, we're going to always miss the script and talk about this in the vein of build a better mousetrap as opposed to go where the market is going and go where there's unmet needs in the global financial system, but do so in a way that respects monetary policy, monetary sovereignty and effectively rules based competition. So I think some of these statements are a little misplaced because the category of stablecoin activity that is big and is successful is totally responsive to the singleness of money and totally responsive to monetary policy of the underlying currency and central bank.

Speaker C: Yeah, certainly those statements and the critique doesn't really reflect what we're seeing kind of in the market more broadly. So um, but elasticity is interesting, you know, the ability for money to be elastic, so to speak, quote unquote. Stablecoins are uh, you know, pegged one to one. So you don't have this uh, facility. Is this a concern generally for the banks perhaps. So the ability to create credit and loans and so on. Why would this be an issue certainly for private sector versus public?

Speaker A: Just happy to add a quick Comment there. And I'm sure Cindy and Jane may add to this too. The stablecoin is a very different value proposition. In fact, the regulation both in Europe and the United States would preclude a bank from issuing a stablecoin from the core banking balance sheet because you don't want to expose what should be a fully reserved payment innovation to the underlying asset liability mismatch and risk in the bank's core balance sheet. We think banks are incredibly important. We partner with banks as a feature of the way we operate. But the feature of the balance sheet and the point of a bank's balance sheet is to create credit and lending. Whereas stablecoins are meant to be fully reserved payment instruments that solve the original problem in crypto which was buyers and spenders remorse. We're conducting that at very high prudential standards. And so I think the banking and the central banking community should not worry and that the more their national currencies are effectively competing on these markets, the more those countries could win and compete in the digital currency space race because it's about payment systems optionality, not about currency competition.

Speaker C: Yeah, that's a great point, Jane, Cindy, anything to offer there before we move on to the next point?

Speaker D: No, I would just echo that sort of thought as well. Like in elasticity in the form of demand. It's also like from a sourcing of liquidity perspective. So uh, BV and K, we source liquidity both in the primary and secondary market across market makers, crypto exchanges and so on to ensure that we always have access to the best liquidity for our customer base as well.

Speaker C: Um, okay, I'm going to change gears here a little. Like the integrity point I'm going to skip because we always get the integrity AML kyc, make it safe, make it secure. As an industry we've always got the Internet early days we had all the same concerns. And then just coming back then to this notion of um, the BIS making these claims and this critique. Lest we forget, post Libra Augustine Carsten In March 2019, no need for CBDCs, but three months later, oh crap, we probably do need them. So you know we've often seen the misjudgment on the private sector, uh, by the academic bodies. But just changing gears I think. Jane, Cindy, what you have done with payouts is really exciting. I see it as kind of the productization of the killer app. So the killer app being the stablecoin Dante, to your point. But here, now we're starting to see this really exciting productization layer. Can you talk to us a little bit about how you got to this innovation and where does it go from here. So we've also seen what Shopify has just done with Coinbase and stripe on escrow. So you've got payouts, you've got escrow, you're starting to see a few of these cool quote unquote products emerging. So where does this go? What are the next steps? Certainly Cindy, I'll start with you. From a world perspective, what's next?

Speaker E: Yeah, for sure. I mean I think the biggest call to action is to help solve cross border payments for marketplaces. Right. So if you think about sellers, creators that are selling their services and or their goods cross border, particularly from markets which have fairly volatile currencies or exotic currencies that end up with a uh, 3 to 4% cost to be able to exchange, those sellers are frequently their cost of their services in the goods that they make are also pegged to a uh, more dominant currency, either US dollar or euro. And they want to be able to receive and hold the funds but they aren't a US entity so they can't hold the US dollar. So really that's the first and easiest call to action to solve for. I think we're seeing the same on the remittance side. So I was in Dubai a few weeks ago and the amount of remittances coming out of that market where individual workers are trying push their funds home, they also have the same problem areas that they're trying to solve for. So allowing an individual, a ah, small seller, a small business to be able to hold a US mirrored currency, but to be able to do it without incurring you know, 3 to 4% types of fees I think is good for the consumer, is good for the seller, is really good for the global economy.

Speaker C: Yeah, no, I agree. I wonder if you don't get into any legal regulatory ground around holding so you know, lots of discussions around the store of value. Can we all store value, value that's multi currency globally in wallets that are hosted wherever they're hosted. So some of that seems uh, opaque. We won't dive into it right now. Just wanted to raise it. But coming then to you Jan, from a BVNK perspective, we're starting to see the onboard and the off board ramps which is great. Starting to see some payout capabilities. Some of the other things we've mentioned from a BVNK perspective, what does the roadmap m look like for you guys?

Speaker D: Yeah, so I think what we've seen from a journey from any zodiac payment institution is they usually start off with B2B stablecoin settlements. So that could be either settling a merchant and stablecoin. And again the benefits of that are quite clear from a cost perspective and obviously that they can be settled over the weekend period as well. So 50% of BVNK's volume today is B2B stablecoin settlements. And then naturally that transitions into payouts. So that probably equates to around 20% of our volume today. And exactly to Sydney's point, it's very easy for us to say in markets like the UK and uh, the US that we have a stable currency. But if I'm a contractor in Argentina, I would rather receive USDC than Argentina pesos where the stability is constantly changing. And obviously USDC can be a great equivalent to that. And in terms of your question of what happens next, I think naturally if more people are choosing to get paid items stablecoin, they want to spend that stablecoin and they want to hold that stablecoin and generate yield office. And then naturally if I want to spend it, that's kind of in my opinion, driving merchant acceptance. So we'll see more and more PSPs or marketplaces or maybe you'll be able to pay for your Netflix subscription with stablecoin. It will have that full circle moment in my opinion.

Speaker C: Yeah, it's an interesting point. Like acceptance seems to be stable stakes, you know, at some point rather than thinking, you know, do we all issue. I think as we start to see more flows, certainly acceptance seems to be something that you do as a, uh, kind of a housekeeping 101. So Jane, you mentioned weekend just recently your partnership with high note introduces 24. 7 funding. Again, really exciting little use case there, uh, which is like opening up operating hours. Fairly simple but super powerful. Could you talk a little bit about that and kind of how this has come about and a little bit more about that particular value prop.

Speaker D: Exactly. So like we're seeing that in a few different use cases. So again, if you're funding an emerging market, payout is another use case that ties quite well into that. You'll have to bulk fund in USD over SWIFT and hold quite a hefty amount over that Friday weekend period. Whereas if you're funding and stablecoin as we all know can be instantly done over the rail. So it can dramatically reduce the capital requirements that some of these fintechs have to hold. And obviously the benefit of having that capital, they can fund that into other projects like loans, credit cards and so on and so forth. That's something that I think we're seeing come up more and more. The ability to speed up anything that is capital intensive for fintech can have huge benefits.

Speaker C: Yeah, that's certainly a very hot topic. Liquidity management, capital management, there's a narrative but at some point it would be great to really double click and go to the balance sheets and start to look at how and so just that use case. Super exciting to see it pop up. I want to come back to Cindy real quick because Cindy you said we won't be issuing but Here we see Fiserv just this week issuing their own stablecoin to help 3,000 of their customers globally start paying and receiving in stables. So that seems huge threat. I'd um, suggest you know for the banking and pay codes, all the flows and store of values moving to completely new rails, these power shifts, so to speak. How are you thinking about that and why you said we're not issuing. So just a little bit of your views on why that's the case and do you see fiserv issuing as a big threat?

Speaker E: Yeah, look I think the difference is worldpay, uh is a pure play acquirer. So we are acquiring processing in at scales the same two and a half trillion being able to accept in 95 markets. We're very uh, global company. We want to first and foremost be able to facilitate the merchant choice. So uh, rather than push our own solution on the merchants, we want the merchant to be able to choose the scaled currency that works for them. Fiserv I can't speak for but they're also an issuing processor and the way that I read that announcement and the 3,000 customers that they were referencing was their small bank issuing customers. So I think it's really coming at it from a uh, very different angle.

Speaker C: Coming back then to you Dante, where does this go? Like is everyone going to have a stable coin? Do we only need one USD stable kind of out there, one GBP and one euro. How does this play out in your mind?

Speaker A: Yeah, I mean well for one the passage of the Genius act from the Senate and ultimately getting it over to the Congress and then eventually the President's desk, which the President called for a clean Genius act to emerge from the House Financial Services Committee is frankly work that is incredibly long overdue. The United States from a policy and payments vantage point is an outlier nation. When you compare the US to advanced economies around the world, in the United Kingdom and Europe and Asia, many, many Asian countries, you have whole of government, whole of economy frameworks for payments activities. And the more you leave the vacuum of US regulatory leadership here, the more you then continue to subject the market to. Many categories of so called stablecoins have proven historically to be Internet funny money. And the U.S. the way we are an outlier is we don't have that federal non bank payment systems charter. So the Genius act is bigger than stablecoins in many respects. It's the culmination of, and frankly Secretary Scott Besant has said as much that, that the Genius act gives us a chance to really ensure that the dollar's role in the 21st century is protected and preserved and that we guard the US dollar against technological obsolescence. Because stablecoins as a medium of exchange in crypto markets in some ways ignores their actual genuine breakthrough innovation, which is that there are breakthrough in payments because for the first time you have the ability to send the settlement instrument and the payment instruction directly to an end user at the speed the scale of the Internet. And as both Cindy and Jane have described, the next level of really high value added activity is the abstraction away, uh, of the crypto and the blockchain part of it. Because as an end user or as a commercial counterparty, what we want is better, faster, cheaper payments. And, and so much of the payment system and the banking system frankly doesn't look future proof. And so does the dollar itself. And so I think the clarity of purpose that the U.S. government and the clarity of purpose of bipartisan voting on the Senate side for the Genius act is a bigger issue than narrow interest. It's in the national interest to get this regulation, uh, across the finish line. So I think that all of the mechanics are in place and the political and legislative mechanics are in place to get this done before the summer recession. And then what would happen is this innovation is Internet scale money. I wrote a paper a while back calling stablecoins perfect. Ah, Internet money for Thomas Friedman's hot, flat and crowded world. Because in a payment stablecoin environment you don't send a cross border payment, you send an instant payment to a trusted recipient, analogous to the way you and I might use emails, right, open emails. I don't care that you're in London, I'm just sending you a trusted message. And so that's why this is an important breakthrough, uh, that requires the US to be at the table and frankly for us collectively to promote regulatory harmonization around the world for what this innovation can mean for better, faster global settlement.

Speaker C: Yeah, I love this idea of at some point does cross border payment actually Leave our vocabulary because it is just a uh, wallet to wallet. Of course there's a whole bunch of legal and compliance and reg and policy considerations. The just shifting a little bit more then to the use case. We talk a lot about cross border. We talk a lot about B2B. Of course stripe has kind of shown us that there's tremendous opportunity there. We know that that part of the market is a poorly served segment.

Speaker D: We.

Speaker C: Cindy, you talked a little bit about remittances. Eugene, uh, as well. But what else? So where does it go in terms of just payments and then stretching a little bit to the DVP side, delivery versus payments. Of course we're seeing the rise of digital asset networks needing a settlement leg. But just uh, around the horn real quick. We'll start with Jane, other use cases and a business case I'd love to just get your view on what do we expect over the next 18 to 24 months. Dante, you mentioned it's a compliment. So it's not going to eradicate everything we do and completely kind of overhaul it.

Speaker A: We might do.

Speaker C: But what are those use cases beyond the cross border B2B and the remittances that we're seeing?

Speaker D: So I think one term that maybe all of us on the school have heard flying around is that stablecoin sandwich use case. So that's also taking in fiat on ramping to stablecoin and then off ramping back to fiat. I do not think there's a world where fiat currencies will never exist. I think stablecoin is simply going to be embedded into all financial instruments in some way, shape or form. That is where it's going. Rather than just specific use cases to solve one individual problem. We can easily see that there has been a knock on effect where each individual from an institutional level, we saw the likes of a lot of the large banks purchasing Bitcoin from an investment point of view. And now exactly to Dante's point, regulation is having its own effect and there's this global era of everyone's talking about stablecoin in some way, shape or form. But uh, my point is I think it's just about building better financial infrastructure and that is what stablecoin and blockchain will do. So in terms of what is next, I think there'll be a stage. You won't even know if you are sending a payment through blockchain or through a traditional payment rail. That's what it will look like from a customer perspective.

Speaker C: I love that point. The complexity behind the light switch. Cindy, you Mentioned choice for customers. I wonder if there is even a point where you don't care, meaning you want it to be Dante, faster, cheaper, kind of more transparent. So you, the infrastructure, the technology figures that out for you, coming to you. Then what do you see? What are the exciting things that we see in terms of use cases and the business case behind those?

Speaker E: Yeah, I think your point of the faster, cheaper, the language that I put around it is that the call to action for this is where we have either a friction associated with a transaction or a high cost associated with the transaction. So I think the slowest use cases and the least likely to scale is where you have US dollar to US dollar. Right. So US consumer purchasing on a US merchant or US Merchant pushing funds to a US based seller. There's essentially zero friction in that. There's a, uh, myriad of different ways that that transaction can get funded and they're all near free, going all the way down to kind of same day achieve. So the call to action to move that off of US dollar settlement, when both parties have a US bank account, there's just, there's not a lot there. So you might see experimentation, people trying something new. But I'd be more bearish in those places. But the long tail, as soon as you're trying to light up, um, again I keep going back to cross border routes or where you have a merchant that doesn't have a US based entity, um, a seller that doesn't have a US entity, and the same in and around the European markets. That's where you have a lot of friction associated with the regulation of who's allowed to hold those accounts, who's allowed to hold the funds, um, the KYC associated with them, and a lot of good, really valid use cases where we need to move that money and to be able to do it in a regulated way that you can point to parties that are operating on the right side of, uh, what the regulators want to see and be able to do it in a low cost transaction. That's just a huge opportunity.

Speaker C: Yeah, that really does seem to be the sweet spot at the moment. Dante, any additional views? Just from a circle perspective, you've obviously seen a very macro view of the adoption. So is it just Bingley, would you say B2B cross border, the cross border remittance side or are you seeing anything else?

Speaker A: Yeah, first, totally agree with Jane and Cindy. I mean find the place in money movement where there is a friction and we now have an opportunity to conceive of a world without the friction, but without Throwing away the safety and soundness and other consumer protection financial integrity norms that are just true of responsible actors in the global economy. But then again, to earn my seat at the table in a Bain conversation, we also have to talk about, well, what are we solving for in the broader sense, right? And so much of the way people move money today is encumbered by the hurry up and wait properties of payment networks that don't talk to each other. And the reality that for a whole category of humanity in code we trust would be the type of words that they would have on their currency versus what we have in the US dollar and God we Trust. And they want instantaneity, they want user directed control. And in that environment, Internet based financial services and Internet based financial activities that are user directed, user controlled and user owned is a uh, total financial services breakthrough, analogous perhaps to Blockbuster Video watching the streaming revolution happen and not figuring out how to adapt fast enough to that being the reality, even though they had all the advantages of being an incumbent and in many respects having created the category. Uh, the other thing I would argue is that stablecoins, when regulated as a near peer to electronic money, which the Europeans have done, the United States will do with passing the Genius act, the UK will do eventually and other major jurisdictions will do, is it then becomes a really compelling Internet scale innovation for cash. And then you got to ask yourself what are the limitations of physical cash in the 21st century? Number one, it only goes as far as your arm can reach. Number two, in the pandemic it was a vector for spreading disease. And number three, the logistics of moving cash are complicated, right? Censorship resistant, privacy preserving the ultimate settlement instrument for peer to peer payments. To the extent you're physical and regulated payment stablecoins are an exceptional innovation that respect the properties of cash, unit of measure, store of value, medium of exchange, but then import onto the cash itself, the superpowers of the Internet. And so in that sense it's a genuine breakthrough, a bigger breakthrough than central bank digital currencies, a bigger breakthrough than deposit tokens. And what we're also proving through all the examples on today's conversation is that there's a convergence here of regulated actors in the broad global payment system and financial system. But we're going a place where this activity couldn't go if it was analog and if it was just physical cash. And I think that's where stablecoins are a really compelling innovation as well.

Speaker C: Yeah, that's wonderful and I love your point around better innovation than CBDCs, tokenized deposits but we're still seeing a lot of that activity. Of course JPM just launched jpmd as you guys would have seen into Coinbase. So you know some again optionality Cindy, I suppose is just providing the industry with choice which is what we're seeing coming to you. Jane, real quick. We're seeing a lot of activity around acquisition and um, what's driving this acquisition in your perspective and your mind? And what does the landscape look like as banks Pecos look out to the ecosystem around fintechs acquisition. Things like the issuers that wallet providers, the onboard and off board ramping, what should they be looking out for? And um, what does that landscape, the acquisition landscape look like from your perspective?

Speaker D: So I think it's a great question. I think why we're seeing so many acquisitions in the market is simply because industry leaders are recognizing this isn't just another payment method, is about replatforming of financial services and they don't want to miss out anymore. It's not just seen as this new shiny thing, it actually is solving real world problems all pointing to an integrated future where uh, stablecoins are underpinning various financial products which we've mentioned before. So I think honestly that is one of the key drivers that we're seeing. There's obviously been huge acquisitions ah in the market. Stripe and bridge definitely was one of the biggest. I think we all know today's and had a downward spiral of where we're seeing tons of others come through.

Speaker C: Yeah, that's great.

Speaker B: This has been a great discussion. Uh, you know one thing that's been going through my mind as we've talked here especially about solving for cross border issues, solving for payouts, solving for remittances, all the highest friction point use cases and payments put in the take here is this is where a lot of the profit pools are for a lot of payments companies globally. And so if we were to think about the puts and takes, clearly there's a world in which it say lower friction, vastly higher volume. Maybe it's actually much better but would love to get this group's take on FX and cross border fees in general are a huge slug of the global payments profit pool. How do we think that's going to evolve for some of the traditional players in the next call it three to five years. Cindy, I'll start with you but I'd love to get everyone's view here because this could presumably go a couple different directions.

Speaker E: Yeah, absolutely, I think that's very true. That long tail of cross border drives upwards of 50% of the profitability. We always hear about Visa, MasterCard, you know you can see it in an add in P and L as well in their public filings. So certainly I think this will play into it. But I think the first place that's going to scale is on the treasury side. So the B2B payouts, that is a um, business entity paying out to either their sellers, which may be consumers but small businesses but B2C or B2B types of use cases. Most of what you're talking about of the profit pool is actually on the consumer side. So where fees are added on to either the consumer or to the merchant associated with a cross border acceptance that requires in order to start to disrupt that we need to have consumers holding wallets that they're looking to transact in. Um, not to say that's not going to happen but that's not the side that's scaling the fastest. So you know I'm certainly more bullish that those types of payments will continue to exist.

Speaker D: Yeah, I think the only thing that I would add to that is we know there's money everywhere, right? Like we saw that originally with cross border payments and then um, the likes of the wisest of the world's revoluts currency clouds breaking into the market and they took a huge amount of that proportion away from the banks and I think all the banks originally looked at. This isn't going to be a problem for me. I know exactly. I know my customer base and then obviously they saw a natural amount of their customers migrate away to some of these other new innovative fintechs and I think that is exactly what we'll see with stablecoin payments. You can't ignore it forever. It is going to affect and if you don't kind of start to embrace it now, you will just become a last leader from that perspective. So I think people have definitely started to open their eyes that this thing isn't going away and it's better to bring it into your product suite rather than ignore it.

Speaker B: Thank you. And Dante, uh, can curious your take as well as how this has played into some of the dynamics that have certainly played out in Washington. Bidet?

Speaker A: Yeah. First of all it's a great question. I kind of take the view of you remember CK Prahalad's book in strategic thinking on the fortune at the base of the pyramid and that the way you would access people south of the equator with financial services is you can't deliver it through traditional means. You have to reconceive of it and effectively Miniaturize or atomize what it means to have universal financial access. And I think stablecoin's first big multi, multi million end user use case has proven to be basic dollar denominated store of value for millions of people armed with little more than an open source mobile wallet. Big use case doesn't necessarily disrupt incumbents nor traditional business models. The next expected use case of course is to create a flywheel. But as I think both Cindy and Jane have outlined in not only their companies and their business models and their integration of this innovation, that there's a perfectly copacetic way of doing that that doesn't necessarily disrupt incumbents. And my broad stablecoin and blockchain technology analogy is cloud computing. At first terrifying, IT teams had job preservation on the line, the more they gave up their physical server farms. But you fast forward to today, no one talks about it because it's ubiquitous infrastructure for public and private continuity. And I think eventually the whole settlement activity powered by stablecoins will end up in a potentially similar place. People don't care about the tech, they care about the outcomes. And the last quick point I would make is in a recent meeting with the, uh, head of the World bank who used to be the CEO of mastercard, he describes this notion of people are everywhere, opportunity is not. And what we are now able to reconceive of in rendering regulated financial services down to the last mile is a world in which opportunity payments, settlement, financial access, credit lending, all of these services can be rendered down to the last mile where all you need is a basic Internet connected device. Shame on us collectively if we fail to really pursue that in as good and as fast a way as possible. Because the alternative world is pretty terrifying to me of whole continents being cut off from financial access or people being preyed upon by Internet funny money and stable and name only coins and worse products that are unregulated or unusable.

Speaker C: Well said there, Dante. So folks, we could keep going for another couple hours, but we're running out of time here for this session. Of course, happy to kind of run a second, but just wrapping up in terms of future looking. A, uh, quick, final, quick round question to each of you. Jane, starting with you, what signposts should we be looking out for in terms of both threats and opportunities over the next 18 to 24 months?

Speaker D: So I think as well it's not early anymore to get into stablecoin. I think it's actually to get in late. So that early advantage is nearly gone, in my opinion. I think it needs to be built into your strategy. I also think within the next five to 10 years, stablecoins will represent around 20% of cross border payments today. So they would be kind of the key things that I think we'll be seeing.

Speaker C: Thank you. You touched on a point that I think Cindy comes to you in terms of how should incumbents be thinking about what's happening and how should we all prepare?

Speaker E: Very much I agree. I think that this needs to be part of every enterprise sized company strategy to think through how they can support their vendors, their sellers needs to be able to get paid if they have these cross border use cases.

Speaker C: Yeah, certainly we've heard that like every single company that touches money, moves money, needs to have a stablecoin strategy. It's no longer coming. It's uh, at the door. I love your point, Jane. It's probably first mover advantage. Maybe some folks had missed out on that. But Dante, closing with you, what's the road ahead with respect to regulation? We're seeing of course Japan, Hong Kong just recently, the Middle east of course doing really good work and the US catching up. So what do we expect over the next 18 to 24 months?

Speaker A: Yeah, I mean, a quick comment. There is, um, there is a massive hidden cost to technology, gradualism. It has not worn out very well for policymakers and regulators to guard their economies from the so called future. And so I think anybody in any jurisdiction contemplating what to do with stablecoins and digital assets should ask. The Mario Draghi test of all of Europe is are you uh, uh, slowing down your economy with unnecessary policymaking and white papers that are way too prescriptive? So there's a risk in gradualism in my opinion. And secondly, if the product is unregulated is probably because the issuer chose to be. But what Cindy and Jane have described as a world of convergence in which you could have an end to end money flow powered by stablecoins and at no point engage on the edge of illicit finance or on the edge of illicit finance. Um, and that there's an opportunity here to actually upgrade national security imperatives and global security imperatives as well. And so I think that's the key. And then the last one I would say is hopefully the tech fades into the background. You know, what was the last time you had a conversation about the Internet and the hardware and software that makes it possible? And so if this is an Internet of value, it's moving from its dial up to its broadband phase. But eventually we have to describe the outcomes and not the tech.

Speaker C: Yeah, no, I love that point again behind the light switch, which I think is where we need to get to. Folks. Thanks so much. Jane, Cindy, Dante, thank you so much. Really exciting to have you guys on. We will probably invite you back at some point as this thing moves at stablecoin speed. So Mike, over to you to close. Thank you.

Speaker B: Thank you all and appreciate everyone for tuning in for this episode of Deciphered. Maybe we'll go around quickly. Where can our listeners find out more about you, starting with Dante? Sure.

Speaker A: Well, I have a website, Dante desparte.com or of course go to Circle and catch us on the interwebs.

Speaker B: Cindy, over to you.

Speaker D: Perfect.

Speaker E: Well, I don't have a personal website, but WorldPay.com is a great place to find out about WorldPay services and then you can find me on LinkedIn. So always excited to engage there, Jane.

Speaker D: I'm in sales so you'll probably find me at the next conference, to be honest. Um, but also BVNK's website and I'm also on LinkedIn as well on Terrific.

Speaker B: And you can find Ricardo and I both@www.bing.com. thank you all. If you enjoyed the show, please give us a five star review on Apple or Spotify and make sure to subscribe so you don't miss the next one. Thank you and see you next time for more.

Speaker D: Sa.