Stablecoins: Exploring Adoption, Regulation, and Real-World Applications

Speaker A: Foreign.

Speaker B: Voices in Payments expert insights for a uh, digital payments world.

Speaker A: Welcome to Voices in Payments, the podcast where we dive into the stories, ideas and innovations driving the future of fintech and payments. I'm David Nunez, consultant at ah, Payment Genes Consultancy and your host for today's podcast. Today we're diving into a topic at the center of digital finance transformation which is stablecoins. And whether it's cross border payments, financial inclusion or bridging crypto with traditional finance, stablecoins are making waves and of course raising a lot of questions to unpack um, it all. I'm joined by two great guests from worldline, Thibaut Pele, head of Product, Digital currency and Clement Josiah, Chief Product Officer alongside my colleague, uh, from Payment Genes and digital assets expert Vinnie Castiglione. Welcome all and thank you of course for joining us today here at PaymentJeets.

Speaker C: Thank you.

Speaker D: Keja Faraz.

Speaker A: So I'm gonna be quite straightforward in this. So it is no lie that stablecoins are everywhere in the news lately and I'm just like reading my notes here today and we have like banks all over the world launching their own Euroback, uh, stablecoins. Then we also have USDC being integrated into payment flows like with Shopify. We also had Trump signing the genius act a few weeks ago, uh, PayPal introducing Pay with crypto lately. And then last night we had like FIs partnering with Circle. So it is a lot. And the question that I wanted to kick things off with is is it this a real thing or is it just like hype around stablecoins and maybe YouTube all.

Speaker D: Yeah, of course. Um, now for me definitely there is a hype but it's more than a hype, it's more than a trend. It's more than a hype. Uh, actually um, because the new things compared to before is that now we are seeing use cases and we m will discuss more about that later. But for me this is the big difference. We are seeing use cases that could improve the processes, bring new benefits, new features. So it's not only a trend about a technology that we could have seen before with the blockchain, basically, um, it's really bringing something new to the market that solves issue and real people.

Speaker A: Is it also the thing that you view?

Speaker B: Yeah, yeah, for sure. And if I just want to comment on the question of the hype. So indeed I think definitely it's a hype. Now it's very much on the uh, west side of the world, I would say. So you said it with the US but let's see for Europe, I think Europe is striking, uh, trying to get traction there. So we will see. Now the question is will we transform it in Europe? I think that's mostly the question. So. But yes, it's a hype and I think it's not something that is fake. I think that's, that is for sure.

Speaker A: Vinnie, what's your take here?

Speaker C: I definitely think it is, you know, a hype for sure. Um, I mean you see adoption is accelerating massively. When you look at data from let's say fireblocks, you know, you're seeing half of institutions that are already using stablecoins for their payments. So it's definitely uh, picking up.

Speaker A: And maybe for the ones now that we know that, mhm, this is an actual real thing and it is not just hype, at least from our perspective of payments, uh, geeks. For the people that is listening to us today and have no idea what stablecoins are. What are stablecoins? And maybe I can start with you now.

Speaker B: Yeah, yeah, I can start and I will try to stay very high level in a way because this is also what you should say when you speak to anybody, right? Even to your family. Um, so that's just the, let's say the digital form of an existing currency, right? You could also say, uh, anyone can say, but I really have something like that in my wallet on my phone. Uh, which is by the way a true question. We might come back to that by the way later. But the reality is that it's just that um, it's just a new form, let's say of, of an existing currency which is today mostly dollar based on dollar but it could be tomorrow euro even though it's very small today.

Speaker A: And when it comes to like, because one thing that we really get a lot when we talk about, talk about stablecoins, is it like what is the difference between stablecoins and crypto? Uh, because a lot of like people think of stablecoins and directly think about like trading, right? And that comes to mind and they're like, okay, this is dangerous, right? I'm not going to put my hands in there. So what is really the difference? What is bringing stablecoins at the forefront and why is it like such a thing now?

Speaker D: Yeah, um, for me, so we could say it's crypto, but let's make it simple. Okay, so we will try to make it simple because for sure we could debate hours on the definition, but we'd like to make it simple. When we go with cryptocurrencies, we talk About a uh, use case on top of the blockchain, which means basically a token. If you own a public blockchain, let's put also this definition on the public blockchain that has no intrinsic value, let's say, which means they are not pegged to anything. Pegged meaning there is no currency behind to ensure the stability of the crypto. Bitcoin, uh, is a cryptocurrency. We have Ethereum, we have Solana, So those type of crypto that we earn in the news, those are cryptocurrencies. A stablecoin, we could argue that it is a cryptocurrency in the sense that it is also a token that is issued on a blockchain and let's say a public blockchain. The real difference is that behind to make it very simple, once again for the audience, let's say when you issue. So when you create on the blockchain, when you mint, as we say in geek's term, um, one stablecoin like $1 or €1 of stablecoin on the blockchain, you put $1 or €1 in a safe, which means you have a currency which is on the public blockchain. So open infrastructure and those type of things. But that is completely stable. And on that I will just add also something because sometimes you mentioned the risk and those type of things. So we will deep dive on those uh, later. But first I want to tackle one point which is the one maybe with Terra Lunar, because we've seen like three years ago the collapse of the Terra lunar 80 billion collapse, uh, in a few seconds, uh, there is different type of stablecoin. If we deep dive a bit into the stable coins, there is different types of stablecoin. And today mainly on the market when we talk about stablecoin we talk about fiat based, what we call stablecoin, which means you really put some cash to peg the stablecoin. The difference with what was done previously, such as Terra Luna, is how you ensure the peg. On one hand you could ensure by putting some cash in the vault, that's what I just mentioned, you could ensure the stability that what Paxos is doing, for instance with commodities, you put some gold for instance, so you have a stable coin that will follow the goal basically. And you have algorithm stablecoin which show difference. And I think we a bit exclude them because more tricky to understand and which are more dangerous. Those one, uh, and this was the type of stablecoin for Terra Luna, for instance. So even when you could put stablecoin let's be careful. Also currently the main stablecoin that we know, usdc, USDC and those type of things are not risky let's say at all but definitely not as risky as could be in the past because the PEG technology is not the same and definitely not as risky as cryptocurrencies because you have real money.

Speaker A: Behind is this shift from algorithmic to uh, fiat backed uh stablecoins. What it's making us see stablecoins more viable in payments now for sure.

Speaker D: For me that's one of the main reason, not the only one. I mean it takes time also for the adoption the technology more major uh, also the infrastructure behind now we can enter more transaction per second. So uh, we have a more resilient infrastructure. But for sure this is one big reason is because at the end it's a question of trust and this type of PEG with a very fiat based reintrust.

Speaker B: Yeah, yeah. I think if I can just react on um. Indeed I think the difference. So crypto is more associated to volatility let's say and you never know what could happen bad or wrong by the way. Uh, good or bad. I would say this way. And indeed the stablecoin are much more indeed pegged to something that is very much stable, hence their name by the way uh, and which is mostly fiat currency and that's using its the one of the big difference uh if we need to explain it.

Speaker A: Yeah and you mentioned before, so you mentioned the regional aspect right. Of stable coins. Uh and you mentioned that the west is like seeing this like push for, for stable coins. Do you see this going forward or is it going to be like more stabilization when it comes to like the expansion of, of stable coins? Are we just going to see like a boom in the west and that's it.

Speaker B: This is what we see. It's not even what we are going to say it. I think we see it already.

Speaker D: Right.

Speaker B: Especially with the regulation coming in. I think it's going to continue for sure. We even see some debate with the banks now. Uh because of course those new entrants are trying to go much more into the value chain but banks maybe they want also to play a role there, which is for sure. Now the big question is for me more in Europe indeed or in the rest of the world, uh what will they do? Will we see the US uh being dominating everything or will we try to play something if I'm just looking at Europe. So that's a big question and I would bet that indeed it's not the end of the game, that's for sure.

Speaker A: And now I'm also wondering about. So you also mentioned the use cases for stablecoins. I feel like as a user sometimes it might be hard to understand how you can make use of those stablecoins, maybe a checkout or those type of, of processes. How would you say to someone new to stablecoins this is how we help, this is how you can use it. And um, where is the value?

Speaker D: Uh, I would say it to someone new in the industry in a very easy way and that's what Clement said earlier when he mentioned a new form of money. I would just say you can make the same in a more efficient way. So basically, so uh, if we move, if we dive into a use case like payments, we can already do payments, someone can already do payments with a card, with cash, etc. With stablecoin you will be able to do the same thing actually, but maybe in a more efficient way, in a cheaper way, especially for merchants, retailers. We might come back on that also currently when we see pain points. The main use case that we see for stablecoin at the moment is really everything related to the cross border basically because all those remittances, when you try to send money for instance to um, your loved one, your parents, uh, etc, etc. Well it costs a lot and it's not efficient because the value chain is actually quite long, lot of intermediaries, etc. Stablecoin has the power to just unify all of those in one single technology which the stable coin. So cross border is really where we see the main use case. But definitely I would say it's also the older use cases that we tend to see. Um, so the payment at the merchant, the checkout we could imagine in the future, the payroll for instance. Also um, and it would add efficiency and also new features like programmability that will ease the life of the customer like automated payments, machine to machine payments, micro payments. Today one of the examples I like to take and I will end here on my side but for instance, you know, sometimes when you're reading a paper on Internet, you uh, are trying to access to an article and usually it's blocked and you cannot read the article. And you could say okay, I want to read just this article and I will pay, I don't know, 50 cents to do it and you cannot because actually it's expensive for the paper, you know, to just unlock uh, this feature. So what they say is no, you can pay €10 and you have the full access for uh, a month as a Consumer that's what I want. That's an example of micropayments and the fact that if we're going to more efficiencies, the type of use cases that we could enable with stablecoin for instance.

Speaker B: Yeah and just maybe to link to what he just said Thibaut indeed efficiency and I think the way you should go to the market when you have a new payment mean and it's not only true for stablecoin by the way, it's true. So for if you look at A2A and many other payment means you need to find the right use case. Uh we like to say that by the way you need to have the right use case. If you look at digital Euro as well, it's something that you will read as well. So starting somewhere where you have a pain, when you solve the pain, that's exactly how you will succeed. And the one he mentioned is a very true one. I think another one could be around M I think the volatility of the currency which we see a lot as well. So in some country where currency is going up and down a lot, you can imagine that it's clear use case. Uh, you mentioned, I think the remittance as well, uh, which is an interesting one. Uh, so this is for sure where it is today. Um, let's see where it will be tomorrow. I think it's for me still an open question. Uh, we should not necessarily maybe we'll discuss at the end if we look ahead in 2030 or something like that. But still let's see how it will evolve. But for sure it's for Spain today. Um, and maybe the last one would be the link with uh, the defi. I would say so decentralized finance today clearly it's been used uh to make the link between the crypto world and the real world let's say. So it's clearly an obvious use case which will help people to get access to it more easily.

Speaker A: And then are we seeing more interest from fintechs in that sense? Because if I go back to the headlines that I mentioned before, are we seeing more interest from fintech companies, from traditional banks, traditional players? Where is that? And maybe like Vinnie can, can add something on this? Um,

Speaker C: yeah, no, definitely. I think we're seeing a lot of uptick from you know, fintechs that are looking to offer, you know, one more cost effective and more efficient money movement solutions. Um and I think when you come to look at the banks as well as hedge funds they're using, I mean today even they're using stablecoins as maybe a risk mitigation or liquidity management tools. Um and I think also when you look at your merchants as well that have a lot of multi currency dealings, um they're also using you know stable coins to kind of hedge that risk against you know as you said those kind of exotic currencies which do have those high fluctuations. So yeah look I think it's definitely um, in real world use case and there's a lot of adoption there.

Speaker A: I find it quite revealing how traditional blood banks are actually stepping into the game. This morning I was reading an article about JP Morgan and how they're going to use crypto to basically kill all the fintech competition. That was such an interesting read there.

Speaker B: Yeah. But some banks like JP Morgan indeed are doing this way. I think you have a couple of banks like that uh, in the world. Uh but maybe to respond to your question on who is playing today, you're right. I think it's mostly fintechs right now that are playing. You see new entrants for fintechs that are now becoming more than fintechs because they are very big uh especially in terms of valuation but still that's the main ones. Uh but we see more and more uh, let's say more uh incumbent I would say. Right. Going into the game and I think you even said some announcement uh recently even in the payment industry if you look at FIS Pfizer a lot of them are now uneven strive of course are going into this game and maybe we'll come back to online later on but that's maybe the shift that will come at some point and the banking industry M And also I think we should comment on this one. They will need to play a key role. At least in my view they should play a key role.

Speaker C: What about your. I was going to say what about your thoughts on let's say companies like Amazon mhm news around them kind of developing their own stable coins. What your thoughts on that?

Speaker D: Yeah, so just maybe before because I think that's important uh, before we back to Amazon. For me there is a paradox. You know when you mentioned fintechs and corporate for instance because basically we mentioned it, stablecoin, cryptos, all that stuff, it's all about trust actually it solves a problem of trust that the blockchain and the blockchain at ah the core solved an issue of trust. The funny thing to me is that then if I want to invest let's say on cryptos I would need to open an account in a fintech that, I don't know, Binance, Coinbase or whatever. Um, then I would need to use a wallet that is also a new player, uh, with maybe a payment provider that is also a new player. So for something that I need to trust at the core, which is payment and my money I actually can't use let's say the companies I've been trusted for years, which is my bank, which is a paradox to me. So that's why I think the fintechs of course innovate always more and more and more. But also now the corporates are taking over. I think that's actually a good thing at the end for sure. It's a partnership and we need both worlds to work together. But I think it's a good thing because also the consumer, when you are not in the industry etc. What you expect basically is to invest for instance on Bitcoin. If you take Bitcoin the same way you invest on the stocks with your bank actually and not going to open a wallet with someone else etc. So I see as a paradox. But uh, just wanted to add this because uh, I find this quite funny coming back to your point, um, Vinyl on Amazon for me I would say that definitely I would say as a good thing. But uh, there is of course a but the thing to me is that once again what is the case behind. Because Amazon is looking to have a stable coin. Revolut is looking to have a stable coin. Uh, there is rumors about ING and those type of things. PayPal of course already have the stablecoin and all that stuff. Well okay, but what's the use case? What's the risk for the consumer at the end? Uh, of course for Amazon it might uh, make sense.

Speaker C: Huh.

Speaker D: I uh, won't deny that but I feel also that we are going a bit to like a stablecoin race with all the banks. Everyone want to launch their stablecoin because we've seen the use case of Tether for instance. They're there 10 billion revenue, there are 100 people in the company, maybe one of the most profitable company uh, in the world by a number of people. So we all want to do that. I would say we should be careful on that also.

Speaker B: Yeah. But on Amazon also to go even further to what you said, uh, I think it's also uh, they just try to have something uh, what we could call a closed loop system in a way they just want to get rid. So to get to respond to your question, I think they just try to remove some things where they have some pain, some cost and so on, so forth. Like it could be the card on the card payment. And try to make an ecosystem where in fact you would do everything within the Amazon ecosystem. So that's potentially the ultimate goal.

Speaker C: Of course.

Speaker A: Okay, so competition was one of the challenges, but there's more challenges in the ecosystem at the moment and one of them is regulation. Right, so we've mentioned a few times now, uh, so we start with the Genius act, but then we also have Mica, uh, in Europe. And I really find it striking like how different approaches they are taking. So maybe it's going to be a tricky question, but which approach do you think is the one to go?

Speaker D: That's a complicated one, Can I say in the middle? Uh, no, uh, I agree with you. What strikes me when you read the text of uh, the Genius act, for instance, it is written really to foster innovation, um, and you see that it makes it easy especially for US players to issue a stable coin. So for the private market really to issue a stable coin, uh, and not I would say, um, in a bad way, but to ensure the peg doing it by getting some access to the sovereign bonds of the U.S. so basically U.S. debt, uh, to make it simple. So I think that's quite genius if I may, because you have the perfect way to both distribute the dollar in the world, what we call the dollarization of the world, but also financing your own debt. That's something uh, interesting. I'm not sure we have the same issue in Europe, so I'm not sure it will be exactly the same. What is sure is that in Europe with Mica it's complicated for the player. We've uh, seen Tether. For instance, they say they want issue the euro stablecoin because uh, it's too coercive basically. And also the difference is how you peg the asset. Basically to make it simple you need some cash in Europe, so you put everything in cash. And today we know that the business model of Stablecoin is more to have uh, part of cash and part of short term debt. And for that I think that's really an issue for Europe to develop Stablecoin or for players to develop the stablecoin because basically it's complicated to ensure the peg. Like the banks today, the banks, they don't have 100% of reserve in cash. That's almost, we won't go into the detail but if you're what they call a significant stable coin in Mica, that's almost what you need to have at least 60% of cash for me. You really, really say try to slow down the innovation from the private sector. On his topic in Europe, while in the US they are really seeing this as a weapon to put the dollar in the world.

Speaker B: Yeah, I really like what you just said on the weapon. I think it's exactly that. I think it's exactly what Trump is doing. Let's face it, uh, is it good, is it bad? At the end of the day, at least it is fostering, let's say, this world economy. I think at least we see that. But you're right for Europe. Can we react with Mica? It's a good question. Indeed. I think having some frame, some regulation is good in any case. It also helps. And if you look at all the regulation, like even PSD2 and other, even Sepa that came in, it brought something to the market. But with Spain and I think that's what most of the players will say and this is true, uh, we should just be careful there, uh, not to go too far.

Speaker A: Yeah. And then we also have so. Well, I don't know actually, is it something going on in the UK similar to like what we're having in Mica and the Genius act?

Speaker C: Um, I think with the uk, obviously, I think obviously they're not part of Genius, um, or the Euro zone. So I think with obviously how the uh, genius set is coming in, I think it's probably seen as a threat for the Eurozone. Um, and I think the UK needs to kind of build something, some kind of framework that sits in between that, um, which will kind of, you know, ease off of, you know, monetary autonomy essentially, um, and allow there for to be probably a bit more uh, leeway when it comes to like micro regulations.

Speaker A: Yeah. So maybe this is a perfect like bridge point to the next thing that I wanted to mention because we saw a few days ago the digital pound, uh, being potentially altered. Right. So my question now was like, how are you seeing the development of CBDCs? Uh, how is that going to affect stablecoins ecosystem? Maybe like we have detail Euro coming potentially with a decision in October. So how's that going to shift things

Speaker B: with a potential decision in October which might be very likely to be pushed back. Let's face it, uh, this is also the hype. We could say it this way, by the way, the CBDC and especially Europe, even though I think some other things happen in the world, but I think everybody's looking at Europe now, um, will it happen or not? That's for me, uh, a very good question. But in the end I think the two topics are linked and not nice necessarily also overlapping by the way I think I would more see the CBDC or digital Euro if I just take this example as more the foundation layer for mostly the settlement uh between the banks or even with the central banks Whereas you could see stablecoin more as the innovation layer on top. Thibaut spoke about programmability all those topics. I think this is clearly how you could link the two together but then you need to also to ensure how it will be interoperable. By the way we mentioned the risk before all the challenges I think this one is also one also between stablecoin but also in CBDC so I think that's the way this could happen uh tomorrow uh still what we don't know indeed is when uh especially gtario will be issued on the market. I mean if it's only in X years what will happen on the markets in the meantime? With stablecoin you never know so that's also why we should be careful there. But still at least for now I think there is a place for everything uh and everybody could play a role

Speaker D: yeah maybe ah to complement a bit. Well I have the same view I would just make a difference between what we are seeing in Europe basically with the digital euro which is a CBDC and for instance uh the audience might ask but in the US Trump ban the CBDC the digital dollar uh for me in Europe it might be complementary like Stablecoin and digital growth because the ambition that I see behind the digital Euro is really to provide a resilient way to provide payments basically to the people so really a uh complement to cash actually to facilitate the access to central bank money. I would say in the US it's not that they don't have the same issue they don't have the sovereignty issue. I mean basically uh Visa maestro cardo schemes they are US based so for them the main objective is really to push the dollar and in that sense a digital dollar would not make sense. That's why I think they made a difference because in the US with their issues the pain point always pushing the stablecoin that will themselves push the dollar to the world makes sense in the Europe I mean for sure we should innovate m more on stablecoin and that is one of the risk is that we are concentrating too much effort on the digital euro and when I say we all conservatively I mean the European, the regulation but also the banks clearly and it will cost money so it should not let's say Restrain innovation from the stablecoin area. But in the future it might completely coexist in my view because the digital Euro would not be issued on the blockchain, it would not be a gate to defi, just like mentioned, uh, Clement, etc. So for me it's a different purpose. So yes, in Europe it would be completely complementary. I would see it, yep.

Speaker C: Do you see CBDCs and stable coins kind of being coexisting or competing in that sense?

Speaker D: Well for me in uh, I would say in Europe coexisting. Uh, yeah, I will stick with one more. In Europe I would say coexisting even though it will of course take some shares maybe on the cbdc. But uh, I really see the digital rule a bit as a safenet behind uh, and in some cases you might have issue with the stable code, you might have issue with your banks. So central bank money I think is essential also maybe for the people who need it the most, the hand bank people and those type of people. So for me coexisting the offline typically and with the offline use case.

Speaker B: But this also brings to the consumer because we didn't spoke so much about the consumer. I think it's a key one because it's also a key question that is being raised within the cbdc, especially with digital Euro is what I will do as a consumer with that. I think you asked the question at the beginning but still that's the key question. I mean I don't care, right? As a consumer I have my mobile, even I have a car, whatever I have, I don't care. That's something that is key to uh, understand and also if you have both the BDC digital Euro and a stable coin, I mean you need to ensure that this will be easy to understand for the consumer. So there is a big work to be done. And by the way this is one of the biggest work for also digital Euro is to ensure that you make it easy to understand, easy to use and at the end also you trust it. I uh, think we spoke about the trust as well but as a consumer do I trust this? Thibaut gave a very good example on Today. Why would I open X Things with X company? Whereas today when you need a card you go to a bank very easily. And that's why also I said at the beginning that banks uh, they have a key role to play I think today on the market because you trust your bank. Honestly if you look at all the surveys, most people trust their bank. So maybe depending on generation it may Change maybe, but still that's the reality today. So you could expect from a bank to play the same role, to provide you the same instrument of payment and to ensure that everything is safe.

Speaker A: And because we've mentioned them a few times now, Visa, uh, and mastercard. So if we think of like winners and losers of diesel, it is hard to like not think about them at some point, right?

Speaker B: Yeah. Well if, if I can start on this one, I don't think they will lose anything. Maybe I'm too bold saying that, I don't know. But let's face it, look at what they did, uh, their investment that they did, both of them by the way not only in stablecoin or in crypto, I mean also in a two way look at their role. They won't be the rail raise of payment. So if tomorrow the world is shifting to that, I don't think they will lose anything. They are so strong today that forces will try to play a role. Now maybe we should put Europe aside because there is what Thibaut said, there is sovereignty topic with Europe still to be proven. But in the rest of the role I think they will find a way.

Speaker D: Let's agree to disagree on this one. Uh, for me maybe because I'm more in there than I like, uh, the fintech squirrel etc. But uh, uh, I think they might lose the long game definitely for the moment, I mean this is a duopoly. They are too strong. They had a lot of cash so they can invest and if they're starting to lose they will buy a new company or something like that. So I'm not worried for that. Definitely not. But in the long run, um, I think it's a difference of philosophy. Um, one of the things I like to say about stablecoin whether uh, I try to explain it simply, I'm not sure if it's simple but is uh to say the stablecoin is to payment what was the open source, uh, to software. So it's the open Internet etc. Open Internet, basically it goes with. Because they are providing this uh, today and the blockchain with the stablecoin it has the capacity to provide the same. So in the long run they're operating on interoperability and those type of things. But if we drop the card in most of the countries, if you are going through uh, smartphone payments, if we are using stablecoin, Rails, I'm sure they will find a way to be in the process but not in the way they are today. And they will need to pivot Or Shift and we mentioned without MasterCard. I think the same for Swift, basically all those networks that connect the world together, it solves an issue of interoperability. Good news or bad news for them is that blockchain is native interoperability.

Speaker B: M But just on this one, if you looked at maybe the last Visa, uh, messaging, marketing messaging, they just changed recently or maybe one year or two, no more ago exactly on that to change how they were positioned to go where what you say. So let's see. Right. But still I think they are already indeed trying to take a step in advance and especially what you say is they have an ability to invest which is quite massive. Yes, but we should also not forget other players, uh, like Google, I mean uh, they are also trying to step in, maybe you can say some more than that. But I think we should not only speak about Visa, MasterCard, I think some other big, let's say in the Gafama world will also try uh, to play a role there.

Speaker D: Yes, indeed. The way I see it or I represent it is if you take a value chain for instance, like a vertical value chain, the winner is basically the one at the lowest point. And on that Google you mentioned Amazon also, I mean they are very strong because they have the cloud. So which means they can start from the very first stack because they own the full stack at the end. So meta, Google, Amazon for sure are very well placed, uh, definitely because they own the infrastructure, uh already we mentioned but also Apple, uh, Apple for instance, uh, and Google of course. But we also have the Google Pay for instance the Android smartphone. Um, and with their technology at the core of the software they can create a payment network. And if you look at payment network basically I would say this is also if you take an example on the market this is what Circle has been trying to do. Uh, they went to a successful IPO and they launched not only the usdc so they decided to extend the services and to go down on the value chain providing what they call the Circle payment network. So really going to attack the infrastructure stack, uh, for the payment Google and Amazon for sure because everything is running on their infrastructure. I mean that's really, really, really a very strong asset. Uh, and that would be hard to catch up on this one do they want to do. So that's a business not to perform payments. I don't know, let's see. But if they wanted to do it, definitely for me they could even maybe Skip with that MasterCard.

Speaker A: We've talked a lot now about the whole ecosystem but now I'm curious, like, what is worldline doing in the stablecoins domain?

Speaker B: Yeah, maybe I can give some words there. Um, so let's take a step back because it's not only about stablecoin, I think let's say more largely around crypto, stablecoin, cbdc, this whole ecosystem. So we've been working around this uh, uh, for quite some years now. I think it's not new more than at least five years. Um, and especially even more in the last years with the CBDC development and even more in Europe of course with the digital Euro. So where we are very strongly involved in many fronts, huh? Which could be uh, uh, experimenting, but also in the root boot development maybe, by the way, Thibaut will come back to that, especially on the experimentation per se. But that's how we started. Okay, but if we just look at worldline globally what it is, so it's two worlds. It's serving the merchant, but also serving financial institution. We are really in between all of that, trying to uh, bridge the gap. So if you look at the merchant side, uh, and I think you mentioned it as well, it's the acceptance of the stablecoin crypto and all those things. So this is, let's say an obvious use case that we already experimented, that we are even liable with, that we did some tries in some countries. So this one is there. You have the crypto to fiat the crypto to crypto. You could develop uh, a lot into this domain. Then you also have the payout, uh, that would come for the merchant. If we look at what Stripe is doing, typically it's exactly what they are doing. And if you look the other side of the story, which is more, um, for financial institutions, there is a need to help them to be in the game. And we spoke about that with the banks especially. So how to enable that, how to provide this, um, safe, let's say, um, infrastructure. But not only infrastructure, also the appropriate regulation around that. And that's where we want, um, to play a role. I said we want because of course we are not yet there. Precisely, but that's exactly where we want to be. Uh, so really to be on the two sides of the story to ensure that we really enter the game. But realistically, indeed if we look back at what we did, we are not so much there. If you just compare to Stripe as an example, it's clearly very different. But this is where we want to be.

Speaker D: Yeah, maybe to add and give a bit of example of what we've been doing, let's say product wise, uh, on the product side we've been doing quite a lot. Not as much as maybe more specialized player of course, but still quite a lot I believe. Um, so Clement mentioned the crypto side. Uh, in Deno, in a country we run a product basically where um, we allowed an enabled merchant to accept crypto payments. Uh, which was quite interesting. Uh, it was already, we started two years ago or two years and a half ago. Uh, and it was interesting because we can really witness the shift from bitcoins, those type of players to stablecoins. Uh, so to be clear, uh, stablecoins are not yet the main part of this product in terms of payments. But still the traction is very important. In two years it went from 1% to something like 20% of those type of things, um, decreasing the share of uh, Bitcoin. And also it was interesting to see the markets that are um, using that. Sorry, um, it was before more, let's say the luxury industry. So the bitcoin basically, you know, like people investing in bitcoin, they got tons of money from that because they invested like in, in 2013 and now they want to buy cars or uh, those type of watches and those type of things. But we see that uh, with the years and let's say the rise of stablecoin, it's more and more daily payment or let's say smaller payment. So that's one interesting to witness. We've been also involved uh, on tokenization. For instance. We've supported a client uh, that um, tokenize and create a payment ecosystem based on gold. You could say similar to Paxos. At the end it uh, was a bit different. Paxos is really stablecoin. On our side it was really more tokenization of an asset, of a commodities which is the gold. And Clement said it not only crypto StableCoin, but on CBDC, uh, we've been very active uh, in all the groups, the expert groups to support the design of the um, digital hero. But also um, even on prototyping exercise, Walden, uh, has been selected and developed uh, an offline prototype for instance for cbdc, which is very innovative because it's also very complicated to do, maybe the most challenging one. So in terms of product, this is really where we stand. So with a mix between live products and also exploration that we've done internally for sure. And let's be honest, we are not where we want to be. We believe we can go further definitely. And that's what Clement said. We are looking um, in a lot of direction because at the end the PSP if the Stable coins are becoming more and more a synth, I would say the PSP would be impacted. Players like Borderline would be impacted. That's why Stripes in uh, the U.S. they've been innovative a lot. Um, PayPal as well. So we are looking at it from a different angle in the companies. Clement mentioned it, the settlement of the merchants, uh, the cross border because it's also important for the merchants. Also the financial. How you can support the financial institution with some key products. And I will give just an example to end here. But so it's a bit, it's concrete. For instance, let's say you are a bank and you want to provide your customers with let's say an onboarding to crypto, stablecoin, etc. You need a wallet. That may be one of the first things you need. How do you provide a wallet to your customers? That's one of the questions. Nothing that we will provide this stuff. But this is an example. You need to provide some um, fraud analysis on the transaction and not the classic fraud because this time you will look at the on chain transaction. So you see you really need to adapt. So the banks need to adapt and of course we could support that. And also the PSP itself can really benefit from the stablecoin to improve the efficiency, to provide new use cases and at the end benefit both the customers and both the merchants.

Speaker A: And I know that we cannot see the future, but maybe a bold question here like where do you see world lie in a few years from now when it comes to this.

Speaker B: Yeah, only to this.

Speaker A: Huh. Not a general one.

Speaker B: Uh, I think it's what we try to say with Thibault is that uh, we want to be in the game, let's say it very directly. Um, that's what we want to be. Our mission as runline is to provide payment to consumer to merchant, uh, to anybody on the market. So we need to ensure that we are working on all the rates of payment. Uh, we of course you used to work on the cards a lot. That's quite an obvious one. But we also expanded to A A2A as well. It has been said, uh, said uh, quite, quite recently. And now uh, Crypto World, even cbdc, stablecoin, I mean and especially stablecoin, we need, we need to be there. I mean because if there is a demand, especially in the markets, there is some leads. We need to be there to provide it to, to the market and, and we, we don't want to miss it. So let's face it, that's where I went to LE

Speaker D: and I will simply say to give choice. I think it's important uh, especially in this world which is more and more fragmented on the payment world. Of course I uh, think our mission at worldline is also to bring choice to the customer, to the merchant, uh, in their payment means. Um, so currently if you are going to the market or something, there is not a lot of uh, merchants saying uh, I want to accept only stablecoin for sure not. But I believe it will accelerate in the future. So I believe our mission is to anticipate the rise, to provide those services to the merchants, but also to look at how we could develop new, first new services because the nature itself of the money will change. This is maybe one of my guess, a bold prediction. But the nature of money as ah we've known for the past years and decades, it will change and maybe the merchants, they will want to have, I'm just saying things probably, but we don't know. But to have interest for instance on payment. Maybe they would like to develop some use cases on top of the payment, like to develop their own buy, no pay later solution maybe. I mean all of that could be possible and we need to be there definitely. And we have the will to accelerate on this topic and to, to push on the market, um, on this.

Speaker A: So, so basically we're being like quite optimistic like when it comes to like the industry also like where we're heading and everything. Vinnie, are you also that optimistic?

Speaker C: I'm um, very optimistic in terms of, I think worldline, you know, as a company are definitely driving, you know, from an implementation and adoption point of view. Um, I think when it comes to you know, looking at CBDCs, um, I think you know they are building credibility and trust with consumers as well, which is you know, further driving that adoption. Um, I think when you look at you know, the current statistics, uh, as well from where the market is and where it's expected to grow, we're looking at you know, 2 to 3 trillion by you know, 28. Um, so I think technology that's going on behind everything, uh, that's kind of being embedded into the efficiency, um, you know, of merchants and money movement is definitely, you know, an optimistic point.

Speaker D: And to what I think it's important very uh, briefly that's a. I think it's also our place to be there. Uh, actually we mentioned a bit the stablecoin race, revoluts, banks, retailers, almost everyone. But at the end what you need also is sovereign player. I think that's very important, especially in the geopolitical context. You uh, need sovereign player and you need player, which makes sense in the industry. Which means who have experience, who have merchants, who have consumers, who have the trust and who are neutral. I think the neutrality is important because I would not imagine as a consumer to have like an Amazon stablecoin then if I'm even an Apple stable coin then to uh, a retailer, to have this retailer stable coin, etc. Etc. And definitely I'm quite sure like a retailer won't use a stable coin of another retailer. We have, let's say for us we are legitimate because we are neutral and we are in the middle of all of that facilitating the payment both for merchants and also the consumers. I think it's also the right spot to be honest, uh, to be for us.

Speaker A: Maybe I would like to, to. Will you want to add something?

Speaker C: I was going to say as well, like with that point as well. When it comes to you know, consumer, you know, user efficiency and user experience, you know, having multiple different um, you know, maybe stable coins and uh, different assets across, you know, a broad range. I mean if you got maybe five different um, merchant issued stable coins, you know, does that become an issue for consumers or does it, you know, become something positive?

Speaker D: No, for me, yes. For the consumers it might become an issue. I mean I consider stablecoin as the productization of the money. Uh, as I like to say, uh, so now m. The money, it has features, it even has roadmap, it has product manager. I mean it has a good market. I mean that's crazy when you think of the money. I think the nature of money is shifting. Uh, but at the end, so the consumer, I would say you need to find the right balance. It's always the same thing. You need to find the right balance. You can't have like thousands of different stablecoin and you don't know how to pay at the merchant, etc. So that I won't see that. But I'm not sure it will converge to only one stablecoin for sure because the nature of the stablecoin will be different. Some stablecoin will be more for trading. If you look for tether for instance, today it's more used for trading. You see that circle is trying to take a different angle. Sorry. Tackling the cross border payment for instance with the circle payment network. So I see that different stablecoins could coexist because they don't have exactly the same feature or the same use cases. They will not specialize in the same use cases. But definitely not too much. So there will see a convergence not to only one to a few of them. And I believe the consumer will have choice then at the end. But uh, it's always the right balance between not having too much choice because otherwise you get lost. But not having choice is not a good thing as well. Yeah.

Speaker A: From a consumer perspective I think it would be overwhelming to see like when you go to check out all the possibilities you'll be like okay, what do I choose now?

Speaker B: Yeah, but then that's a point on this one again on the consumer is um, I mean again do I care? And I don't care indeed what I want is to pay at the end. And I think this will become more and more invisible and maybe. Well, because we speak of a stablecoin for merchant A merchant B and so on and so forth. I don't think it will necessarily exist from the consumer perspective. You will not see that necessarily. I mean if you go to a big retailer they will not say okay, you will pay with my stablecoin. It will not be set this way. It could be under the form of a loyalty stuff, you know, so you will not really see that directly. Maybe that you just get used to the brand and to use the branded world ecosystem. So that's one I think so that's why and I agree with Thibault, you couldn't have all of them. But maybe anyway from the consumer perspective you will not see that directly. It must be in there. Alright. Nobody will understand what you need to do and tomorrow your wallets, I mean maybe you will not even have to decide anything you pay. If you just put a bit of AI in that uh, agentic AI you could imagine that easily. I mean then the best payment option is being used where you go to this. So I think, I think this will come. So that's why I would be also careful on this today. We speak a lot about Stablecoin. It's very much a technological, let's say angle and discussion. But maybe when it comes to consumer it will be less, less this discussion it would be much more hidden.

Speaker A: Let's say if we include agentic AI then we could have like another episode on that.

Speaker B: Yes, yeah. But the link between the two is clearly a key one because we didn't even mention so much uh, in the use case. But indeed Agent TKI and Stablecoin this is clearly an enabler. I mean you will clearly see Stablecoin for payment into this world that mostly

Speaker C: used M. So would you see them being kind of built on top of The CVDC rails. So when central banks are obviously coming into, can they issue private and public, you know, hybrids? And I think that comes back to your point as well. Where, you know, can they coexist? I think definitely in that sense as well.

Speaker D: Yep, it can coexist. Know that the central bank should not overstep. I would say, uh, uh, cbdc, especially digital Euro for instance, has its place now when it come to innovation and private money. I think it's important also, uh, things you do not, should not disrupt as a central bank, the, the financial system. Uh, so if you would issue uh, let's say a public CBDC and also some type of a private stablecoin, uh, on the dictatorial rule, basically you have a risk of displacement of fund, uh, for the banks, which is not something that you want. So it can coexist. But I think also the stable should not overstep, I would say on uh, the private mean of payment and the stablecoin.

Speaker B: Yeah, which is one of the big risky demand. Um, because if you look at digital Euro today, what they aim to do, they aim to go very far into the value chain, which indeed could be a big risk. But if we come back to what you said before, CBDC could be the settlement layer foundation, as uh, Thibault said it as well, resilience, security and all those things. And then on top you have the innovation and where also the private sector is coming in and trying to bring uh, what should be brought to the market and to the consumers.

Speaker A: And maybe now to close the conversation, I would like to finish uh, with like uh, a prediction. So I know difficult, but there's probably something that you have in mind.

Speaker D: Want to start?

Speaker B: Go on.

Speaker D: Okay. Okay. Uh, I will start. Um, for me, so it's kind of a prediction, but stable coin is more than a rail. I would say it's my own view, but it's a vision. It goes a bit with the agent. The world is changing. Um, tomorrow how will you do payments? How will you do shopping, for instance? It will be completely different to what you see today. I really see a word. It's a bold prediction. So, okay, let's try it. But where? Basically you do not go on the website on Amazon to buy your product. Just ask ChatGPT. Hey, ChatGPT, what is the best, I don't know, car that I should buy, for instance, or the best fridge that I should buy. Uh, he will make the comparison and he will say, hey, do you want me to buy this one for you? Yes. Therefore we are going to the AgentIQ and it's an agent that will perform the payment and to do so he will use a rail of stablecoin. And it's really more that my conclusion. It's more than a rail. It's really a vision. And when you look at PayPal or Strike, I think that's what they are very good at. It's not pushing a product or an offer. Uh, it's pushing a vision. I think that's really important. And then the bull prediction for me is that maybe in the future, one bull prediction, stable coin, they won't be pegged anymore. Just like the dollar. It was pegged to gold before and now it is not pegged to nothing because the dollar is being systemic. In the future it might become that the stablecoin is just money, transparent. As Clement said, becoming systemic, you would receive your salaries or your payroll in stablecoin. You will use it for everything. So it would not be a stable coin, it would just be your money. Basically that's my uh, prediction.

Speaker A: What will bring the stability component then?

Speaker D: Just like dollar today. What brings the stability to dollar today? I mean the fact that it is being used almost everywhere by everyone. So you trust the money by itself. So you don't need to peg it on gold as it was before. I mean if it start to be systemic today, why do you need to peg the stablecoin? Because you need to unramp and off ramp because you have both worlds. So you need to say I need to off ramp sometime. Which means going from stablecoin to fiat. If the whole world. We're not even talking about stablecoin or fiat, we're just talking about money. And it is in the form of a stable coin. It's becoming systemic. You don't even need to pay it to like cash in reserve maybe.

Speaker C: Let's see.

Speaker B: No, no. But thinking if you look at the evolution of uh, stablecoin, this could uh, not even be a bold statement.

Speaker A: Huh.

Speaker B: Some could say that.

Speaker C: Huh.

Speaker B: And I think I like read invisible. I think this one for me is uh, something that we should. I don't think it's only linked to stablecoin per se because in the end you could say that tomorrow you will not even care on what you will be doing. So you can link that to AI, to many things, but potentially indeed the rail, what's behind that will be clearly the stablecoin as a source of uh, what is being used behind that that could be clearly uh, what could happen to roll. And maybe so the bull preparation could be say it's going to come even more sooner than what we expect

Speaker A: any daily mind. Vinnie, your prediction.

Speaker C: I think we're going to be seeing, uh, you know, adoption take up massively and I think it's just going to kind of become invisible to the average, you know, day to day consumption that, you know, we are actually using stable coins. Um, I think that's going to come, you know, very fast, um, where it is just kind of integrated into our daily lives. Um, you know, when you look at savings accounts as well, um, other, you know, kind of financial products, they're all going to be very much embedded into, you know, the traditional system. And I don't think, you know, users will be able to kind of identify the, you know, differences, similarities with the technology that is actually behind them.

Speaker A: Well, and with this we come to the end of the, of the episode. It was such a great, uh, time having you here and to be honest, like there's a lot happening so we might need to gather around again to talk about the same.

Speaker D: Yeah, yeah.

Speaker A: So thanks for joining us.

Speaker C: Yeah, thanks a lot.

Speaker D: Thank you very much for discussion.

Speaker B: Payment Genes presents Voices in Payments Expert insights for a digital payments world.