Fintech Talks: Stablecoins, AI & Global Fintech Policy with West Richards

Speaker A: Welcome to the Georgia Fintech Academy Podcast. The Georgia Fintech Academy is a collaboration between Georgia's fintech industry and the University System of Georgia. This talent development initiative addresses a massive demand for fintech professionals and gives learners the specialized education experiences needed to enter the fintech sector.

Speaker B: Hello. Welcome back to another Fintech Talks. I'm your host, Laura Gibson Lamoth, and we're here at Money 2020 Europe and Amsterdam. I have with me West Richards. Wes, thank you so much for joining us today.

Speaker C: Great to be here.

Speaker B: It's been a tremendous week so far. Um, we were talking earlier, you know, staying fueled with coffee and caffeine. But we're here and I'm excited to have you share with us just your experience being here at Money 2020 and uh, the work that you're doing. But I'll start off with like, how is it going at Money20 20 for you?

Speaker C: You know, this is my first time to, uh, the Amsterdam money 2020. Uh, and I'm really impressed. I, uh, I've heard a lot about. Definitely lived up to its reputation. I really, really like it. Uh, and in fact, uh, in many ways I like it better than Las Vegas. Yeah. And I'll tell you why. Here, when you're interacting with, um, uh, a lot of the European companies, folks, uh, at the various booths, um, uh, just, uh, really friendly, you know, um, uh, interested in what you're doing. Um, uh, they're not looking at their watch. Okay.

Speaker B: True.

Speaker C: Um, and just very accommodating, uh, and a little bit of a different vibe. You know, I think money, um, 2020 in Las Vegas is, uh, uh, and you know, it's. I'm not against it. I'm just comparing it.

Speaker B: Yes.

Speaker C: It's just. It's bigger and it's, uh, uh, it's fast moving.

Speaker B: Yeah.

Speaker C: Um, and, um, you know, it's just less time with people.

Speaker B: Yeah. No, I agree with you. I do feel like there's a different culture attached with the geography. And I didn't know if it was necessarily the location and where we are, but I think it's also bringing together a much more diverse and, uh, international audience. To your point, that kind of carries that theme and energy of collaboration. People first.

Speaker C: Yeah.

Speaker B: I also see that kind of in the sales approach also with some of these companies. It's about relationships, which I think, um, you know, in the States we're kind of catching on to that post pandemic. But very deep of you to say that, Wes, because I definitely agree with you, uh, comparing the two platforms. Yeah, yeah. Yeah, I think, um, you know, for you and the work that you're doing. Can you just share a little bit about um, you know, who you represent here at Money20 20 and the work that you know, brings you here to having international conversations?

Speaker C: Yeah, well, um, being here really aligns with our uh, mission at the Fintech Accord. So uh, we, we created the Fintech Accord to uh, meet what I think is a, is a, is a new need.

Speaker B: Yeah.

Speaker C: Uh, in terms of government, uh, relations and advocacy, I think, you know, um, just maybe two years ago, let's, let's pick on the uh, like the trade association or the coalition models that exist in the U.S. yeah. So uh, just two years ago, year and a half ago, it was very siloed. So you had like, you know, the, the payment payments industry trades, uh, in this bucket. Then you had the fintech trades in this bucket. Then you had the crypto trades in this bucket. Right. Uh, and the crypto trades were really focused on promoting, you know, Bitcoin in particular, but ah, some of the other cryptos as well, Ethereum and so forth. And then you have the blockchain, uh, trades. Right?

Speaker B: Mhm.

Speaker C: Now blockchain is heavily attached to the fintech ecosystem. Right. But it also serves other industries as well. It's broader. Right. So those are your four buckets. And what I've seen since doing atbc, what I've seen in the trade association marketplaces, uh, this new lane has kind of been created. So what we're seeing is the uh, advocacy priorities of the fintechs in particular. Uh, and then some of the payment processors, some of them, but mostly just the broader fintech, um, silo, uh, and the advocacy priorities of digital assets are merging. Mhm. Okay.

Speaker B: Yeah.

Speaker C: So uh, the results they want from you know, uh, a government relations perspective are beginning to intersect. M. So there is this new lane and with, and, and, and what? Stimulated that was the genius act that was passed last year in the advent of stablecoin. And it's all cross border. M. Right.

Speaker B: Yeah.

Speaker C: And so this transatlantic corridor, uh, has become even, even more important, more more relevant. Right. So our concept is uh, with, with a scenario like that, you know, what you want to do is take as much friction out of the regulatory systems, uh, on both sides of the Atlantic as possible. Yeah, so that's really kind of the mission. So, so being here on this side of the Atlantic uh, is quite relevant.

Speaker B: Yeah.

Speaker C: And so uh, what we intend to do is, is, is to have, you know, uh, you know, our, our have our footprint in Washington D.C. representing M the interests of where digital assets and fintech intersect. Yeah, and reproduce that in London. Yeah, and reproduce that ultimately in Brussels. And then once you do that, uh, once we have a footprint in all three cities, um, we can begin to work to have, you know, uh, an effort to take friction out of the system. And in fact we are actively doing that right now because we have been invited to be part of the UK US Transatlantic Task Force for the Future of Money.

Speaker B: Wow.

Speaker C: And uh, uh, what our, what our job is and will continue to be is to bring the voices of, of fintech, uh, into the mix of that task force which was created by His Majesty's treasury in the U.S. treasury. Okay. Uh, so Scott Besant, Rachel Reeves agreed to do this last year. Um, and so we're going to bring the voice of fintech into that task force. They have plenty of banks. Okay. The big banks are all in and then they have the digital asset people. But what they're missing are the fintech folks. So our role is going to be to bring them in to the conversation. Wow. So we are already engaged with the U.S. uK transatlantic, um, sort of project. Um, and this is all on the back of us, um, passing the stablecoin legislation in Georgia.

Speaker B: Yeah, yeah. Right, yeah. Oh, wow. I have so many questions. It's really exciting to hear. Um, it almost feels like things and conversations have accelerated pretty quickly. Like we were having conversations just a couple years ago, I think kind of fueled by uh, cryptocurrency. Um, and you already highlighted, you know, some of these different segments when you talk about blockchain and stablecoin. I see those kind of as payment rails or an extension of payment Rails. Um, but now it seems like the conversation has accelerated so fast. And here at Money 2020 Europe we've heard several folks announce their new stablecoin offering and partnership. I mentioned checkout, uh, dot com and Coinbase. Um, I saw uh, booking.comm was on the stage, um, with Citi and some other folks, um, announcing the way that they're looking to implement stablecoin, uh, from a consumer perspective. And so I'm curious about two parts. I want to kind of talk about the government side and the work that's being done to kind of help uh, cultivate an environment for fintechs to truly, um, be able to take advantage of this. Um, the other side of it is, you know, there's so many conversations about, um, the justification, I should say, or the use cases to where stablecoin is being applied. And you mentioned cross border payments what does that really mean? Is it a real time payment kind of thing where we're talking about faster, um, safe payments? Is that kind of the ideal for the applicability of stablecoin?

Speaker C: Yes.

Speaker B: Okay, I answered the question correctly. I was always curious because I'm like, I mean, what is the, the purpose of it? Because like, we keep talking about speed and we understand that cross border is friction or a lot of friction for a lot of people. Um, I heard someone the other day mentioned like Africa and you know, sending payments to Africa. We all know how challenging that is and I'm like, I don't personally. Yeah, yeah, yeah, it's fascinating.

Speaker C: Yeah, it's, it's um, you know, it's, it's all about, you know, um, um, catching up with the, with the technology. So, you know, from a regulatory standpoint. Right. Um, the faster we can, you know, you know, uh, work with legislators and regulators to help them sort of keep up with what's going on so they can adapt the regulatory frameworks as best possible. Uh, is going to be key. Uh, and then there's this other element in the mix, and that's regtech. Right.

Speaker B: Yeah.

Speaker C: So leveraging A.I. um, uh, also taking friction out of the. Yeah, all the compliance systems, uh, that's going to be going on simultaneously. So, uh, but so what it's all about helping these governments keep up.

Speaker B: Yeah.

Speaker C: You know, and the more, uh, perspectives that they have, uh, the more effective they're going to be. They're going to be in making the right decisions when they're, you know, they're looking at, you know, uh, you know, formulating the rules and so forth. I mean, we just had a meeting at the U.S. treasury three weeks ago where, you know, leaders at the U.S. treasury were talking about how, you know, in general, the rails are 55 years old. Yeah. And um, there's, there's going to be some changes and treasury wants to, you know, start, you know, modifying the existing rules to adapt to the, to the future that's coming. The future that's already here.

Speaker B: Yeah. Wow. That makes me think about like the fact that, you know, back in Atlanta, transaction alley, we have such a, you know, a uh, history rooted in, you know, the development of, you know, payment rails. Ach. And now we're talking about the evolution stablecoin. It feels like we have just a solid foundation to really, um, be the SME, the expertise, uh, in the conversation, in the room, having the discussions like you're talking about now we are talking about stablecoin. How does that tie Together from your perspective, since you guys have influenced really, um, some, Some major updates and news from the Georgia Atlanta ecosystem.

Speaker C: So, um, our, uh, you know, our strategy there was pretty simple. So a. As you pointed out, Georgia kind of invented fintech going back as far back to the Federal reserve in the 1950s, you know, being a test bed for ACH and wire transfers. Right.

Speaker B: Yep.

Speaker C: To, um, you know, national, uh, Data Corp. Which is Global Payments, can trace their history back to 1966. Those were the first computerized processing, um, uh, elements at play with, with the industry. Um, so we, you know, it. So we felt we could make a compelling case to the Georgia Legislature. Right. Hey, look, you know, uh, you know, look, look how, how, how much Georgia has benefited from what happened back in the 50s and 60s in growing, you know, the, the ecosystem and transactionality. Right. Well, we need to continue to lead. Right.

Speaker B: Yeah.

Speaker C: And, and this is a way to do that.

Speaker B: Ah.

Speaker C: By creating, uh, an stablecoin, uh, enterprises can plant themselves in the state and have a regulatory framework that is business friendly and innovation friendly, even more than what the federal requirement is right now.

Speaker B: Yeah.

Speaker C: Okay.

Speaker B: Yes.

Speaker C: Uh, and we also brought in the concept of the Limited Purpose Bank. Right. The. Okay, that.

Speaker B: Yeah.

Speaker C: Uh, ten years ago Georgia showed some serious thought leadership there and got that passed. Yeah, it, it, it laid dormant for a while, but eventually it became a very important economic development driver.

Speaker B: Huge.

Speaker C: Right?

Speaker B: Yeah.

Speaker C: Bringing in all these companies stripe, you know.

Speaker B: Yes.

Speaker C: There's more coming.

Speaker B: Yeah.

Speaker C: You know, that we can't talk about, but there's more coming. Right.

Speaker B: Two others mentioned at this event.

Speaker C: You did. So we, you know, our idea was like, okay, look, Georgia helped create this industry.

Speaker B: Yeah.

Speaker C: So we have thought, uh, leadership there, a uh, track record there. Uh, we have a large industry cluster in transactionality. Uh, we did the Limited Purpose bank thing. Right.

Speaker B: Yeah.

Speaker C: So let's continue to keep up, you know, uh, with the trends and let's get out in front of this stablecoin revolution as it is. Yeah. And we were able to, uh, bring our resources to the banking commissioner and his team and our team and their team work together and we brought in voices from, from, from various companies. Okay. We brought, you know, a half a dozen companies into the conversation to help our team sort of craft key elements of the bill and help the, you know, the Department of Banking, um, sort through it all and eventually come up with a really nice piece of legislation. Um, so, uh, and it's, it was, it got signed about, I don't know, 8 days ago by the governor. You know, it Passed the house like 158 to uh, 16 or something like that. It passed the senate, you know, 50 to 1. The governor signed it. It's the first of its kind m. Uh, in the U.S. so we've already taken a leadership role and we need to keep up the momentum. Um, but because of stablecoin, it ties into this whole international theme that I've been talking about.

Speaker A: Right.

Speaker C: Yeah, it's all connected.

Speaker B: Y.

Speaker C: Uh, and you know these stablecoin enterprises are, are, you know they're, they're going to need uh, uh, their, their, their own sort of. They need to participate in the advocacy process. Right? Yeah, yeah. Uh, they're. The stablecoin industry is a, ah, you know, a sub industry is kind of growing. Right?

Speaker B: Mhm.

Speaker C: Um, and we think that you know, we, we could uh, advocate for their interests, um, uh, in a way that's not at the expense of the fintech ecosystem but enhances that. And if you remember what I said earlier about this intersection of fintech and payments and digital assets, I think The Coinbase and checkout.com dynamic is a perfect example of that.

Speaker B: And that's the pattern that we want to see.

Speaker C: That's the pattern we want to see. That's right, yeah. Wow.

Speaker B: No, that's incredible. Uh, you know, just thinking about what you said as far as, you know, the fintechs and adoption and I'm wondering if there's any considerations that we should be sharing with, uh, passing down and having conversations within the fintech community in Atlanta in general, um, that sets them up for success when having these conversations. So I've talked with some leaders about um, modernization, antiquated technology stacks with some of the banks and some of their existing uh, integration lines. Um, and there's some challenges I think when we talk about embarking upon, you know, stablecoin as an offering and maybe it's a little bit operational and uh, educational to your point. Um, this regulation has kind of drawn out the playbook, uh, per se in regards to what's expected. But like what is the, you know, challenges I think that finished fintechs might have to consider when thinking about stablecoin, like risk and regulation or.

Speaker C: Yeah, I, I uh, well, naturally, yeah. I uh, think that, that that's going to be a big, uh, a big piece of it. Um, because uh, you know, you're uh, in, in the US but also on this side of the Atlantic, you know, you're uh, at the state level in the US you're going to probably see, you know, six to 12 states that take an active interest in creating their own regulatory frameworks.

Speaker B: Yes. Yeah.

Speaker C: And just for, just to clarify, you know, uh, the Genius act gives a sort of like an umbrella, right? Yeah, it's an umbrella of fact. Uh, just basic, you know, a basic regulatory framework for these stablecoin enterprises to operate. Yeah.

Speaker B: Yep.

Speaker C: Um, but the federal government is intentionally given room to the states to develop their own frameworks. Okay. And they're, they're, they've given them latitude, uh, to um, be a little bit more specific on how, how they want to be more business friendly or more innovation friendly. Right. And that's all by design because what the US Federal government, you know, and, and Congress, what they like to do is they like to give states opportunities to experiment.

Speaker B: Yeah.

Speaker C: So they're like the laboratories of democracy.

Speaker B: Get their learnings.

Speaker C: Right.

Speaker B: Insights. Yeah.

Speaker C: And they watch what works and what doesn't work.

Speaker B: Yeah.

Speaker C: And then they can take, they can start, uh, modifying the existing federal legislation. Right?

Speaker B: Yeah.

Speaker C: In a way that makes sense. So that's kind of the process. So these companies, these fintechs that are trying to, you know, get engaged with the stablecoin world need to take that into consideration. Right.

Speaker B: Yeah.

Speaker C: They need to look at the various states, maybe start in a state that seems, you know, uh, business friendly.

Speaker B: Yes.

Speaker C: Right there. Before they try to get their federal OCC license. Get your state license. Practice, you know, learn the, you know, learn the system and learn, you know, baby steps, you know. Yeah, baby steps. Learn how to um, you know, handle the compliance and regulatory, um, you know, dynamics. But right now the opportunity to like we would give companies is, you know, we could, you know, as these states, you know, begin to really look at, you know, building these frameworks, um, we can bring the fintechs to the table like we did in Georgia.

Speaker B: Yeah.

Speaker C: We can do that in other states.

Speaker B: Yeah.

Speaker C: Uh, and they can have a voice and they can have, participate in shape, shaping the legislation. Right. Which is a big opportunity.

Speaker B: It seems very unique. I don't know. In your experience, has there been any other area or case where we've had this collaboration pattern?

Speaker C: Um, uh, you know, with the Limited Purpose bank legislation, uh, 10 years ago there was some of that.

Speaker B: Yeah.

Speaker C: Uh, not nearly enough, but there was some.

Speaker B: So maybe the learnings from that kind of the evolution of, of how.

Speaker C: Yeah, yes. Because the same people in the Department of Banking, uh, that, that did that, you know, are doing this.

Speaker B: Wow.

Speaker C: Okay.

Speaker B: Yeah.

Speaker C: So, um, I think there's a real opportunity, uh, for Georgia and for these states and our, to engage, uh, with Industry. Right. Uh, you know, uh, I was at a, uh, an event in London where the U. S. Ambassador to the United Kingdom spoke, uh, at um, um, City, uh, UK and um, he was a big champion of the task force that I mentioned earlier.

Speaker B: Yeah, right. Yeah.

Speaker C: And he made a very important comment basically, uh, saying that, uh, you know, in, you know, industry really needs to, to lead on the regulatory front. Yeah. Uh, and, and, and the reason is, is because it, it's technology. Um, uh, you, you, you can't let, you know, regulators and legislators come up with frameworks, um, without understanding the technology. Yeah, right.

Speaker B: I know you spent so many years, um, being that educator. I would say, you know, we talk about, uh, the work that you guys did, you know, providing really truly a, uh, sight into the downstream ramifications of some of the things that they're trying to lobby for. Um, you know, the reality check to say this is actually more limiting or, you know, straying from the intent with this, you know, law or with this change. And I find that fascinating because to your point, it's like, how do you put together guidelines on a technology you can't even fathom or understand?

Speaker C: Yeah, yeah, we see this with A.I.

Speaker B: yeah.

Speaker C: Okay. Well, the same thing applies with, in our world.

Speaker B: Yeah.

Speaker C: Okay. Uh, you know, uh, you don't want to put the card before the horse. Right. Uh, and the thing about legislators and regulators is that if they don't hear from industry, they'll just go ahead and do it. Um, you know, because they're, you know, they're under, you know, they're compelled. They're, they're, you know, uh, and it, it. And, and it never ends up well. And you have all these unintended consequences.

Speaker B: Yeah.

Speaker C: Right.

Speaker B: Yep.

Speaker C: Um, so, you know, our, our mandate is, you know, uh, uh, you know, education through advocacy. Right. Okay. Or you could even say advocacy through education.

Speaker A: Right.

Speaker B: Yeah.

Speaker C: It's both ways.

Speaker B: Right.

Speaker C: So, uh, if you, if you do that, um, you're going to get a better result. So. Yeah, if we bring, uh. And that's what, you know, that's why we like to bring the executives to Capitol Hill or to Westminster or, you know, folks in Brussels. Uh, that makes all the difference.

Speaker B: Yeah.

Speaker C: You know.

Speaker B: Yeah.

Speaker C: Uh, otherwise they're, you know, they're operating in a vacuum.

Speaker B: Wow.

Speaker C: Right.

Speaker B: Yeah.

Speaker C: So everything is cross border. Now. The transatlantic corridor is, for our industry is, is. Is very key. But beyond that, listen, India, New Delhi is in the game. Dubai is in the game. Sao Paulo's in the game. Singapore's in the game. Uh, uh, we'll probably need to take a look at that. And you have some very sophisticated regulatory frameworks coming out of Singapore that are very impressive that we could take some learnings from. Yeah. You know, and bring back to the transatlantic folks, you know.

Speaker B: Yeah.

Speaker C: Uh, so, uh, it's uh, it's a brave new world. And um, you know, it's, it's, it's funny that, you know, um, the only, the only word I've heard more than the than or the term, uh, I've heard more than AI M at this conference is stablecoin.

Speaker B: Yeah. Agree.

Speaker C: If you get a match. Right.

Speaker B: Yeah.

Speaker C: Um, and then there's the whole piece of agenic AI Where AI and stablecoin intersect.

Speaker B: Yes.

Speaker C: Right.

Speaker B: Yeah.

Speaker C: So, you know, uh, AI Will absolutely be a component of what we're going to try to bring perspective to legislators, uh, and regulators, uh, as it applies to agenic AI.

Speaker B: Right.

Speaker C: Because that's going to be looked at. It's going to be a thing, it's going to be regulated. Well, you got to get everybody in the conversation because if you don't, it's not good. Um, then the last thing I'll say about the importance of the transatlantic relationship is these, these other cities that I mentioned around the world, these other regions, uh, they all pay attention to what happens here.

Speaker B: Yeah.

Speaker C: They kind of take the lead, you know, that we, we kind of take the lead and they, they take their cues, you know, from what happens here. Um, uh, at the very least, they pay attention.

Speaker B: Yeah.

Speaker C: Uh, and at the very most, they'll copy what we do.

Speaker B: Yeah.

Speaker C: Right.

Speaker B: Yeah.

Speaker C: So, uh, it can, it can be, it can be impactful.

Speaker B: It's fascinating. I, I mean the global connectivity that this dialogue is, is in, I want to say, introducing, but uh, continuing to, to develop, um, the learnings, the knowledge sharing, the, the innovation, sharing, um, best practices. It's just all in abundance. I'm really excited about what this means for next gen talent. Obviously we're here translating some of these conversations, uh, into what that means for the future of work. Um, but for our students, uh, is there anything that you think that they should be thinking about, um, or researching in addition to what they're learning in the classroom? When it comes to staying up to speed on the conversations around stablecoin Boy,

Speaker C: uh, you know, I, I think, um, uh, couple things. Okay. One thing is I, I think they, um. The, the, the better they have a handle on A.I.

Speaker B: yeah.

Speaker C: Um, uh, the better off they're going to be. Right. Um, and uh, if, if there's a way to get help, get them underneath the hood on agency AI in particular, um, if they can get their arms around that, uh, that could be I think, a, ah, vital piece of what, uh, what they, what they need to know. Because a lot of things are going to sort of flow from that. Um, and you know, uh, the, you know, the blockchain.

Speaker B: Yep.

Speaker C: Um, is there's going to be an element of that that's AI powered, you know. So I would say, uh, familiarization with uh, blockchain technology and how it works and familiarization with AI will support, um, uh, their ability to understand the digital rails.

Speaker B: Yeah. Wes, thank you for joining us at Money20 20 Europe and sharing your perspective. For those that are listening in, stay tuned for another episode of FinTech Talks. I'm Laura Gibson Lamoth and we'll see you next time.

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