On Ep. 6 of Stablecoin Stats, Anthony Yim, Co-Founder @ Artemis and Andrew Van Aken, Data Scientist @ Artemis are joined by Rob Hadick, General Partner @ Dragonfly to discuss explosive growth in B2B stablecoin payment volumes, the impact of stablecoins on traditional banking and more!
On Ep. 6 of Stablecoin Stats, Anthony Yim, Co-Founder @ Artemis and Andrew Van Aken, Data Scientist @ Artemis are joined by Rob Hadick, General Partner @ Dragonfly to discuss explosive growth in B2B stablecoin payment volumes, the impact of stablecoins on traditional banking and more!
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We’d also like to remind you that the views or opinions of our contributors today are their own and do not necessarily reflect those of the companies they are representing. Nothing we say should be taken as tax, financial, investment or legal advice, do your own research!
Music by Henry McLean
Andrew Van Anken 00:10
Welcome to tokenize. The show focused on stable coins and the institutional adoption of tokenized real world assets. My name is Andrew Van, akin, data scientist at Artemis, a crypto analytics startup. I like to welcome you to stable coin stats, a monthly show on the tokenized podcast dedicated to the stats behind the stable coin market. Joining me today, as always, is my colleague and friend, Anthony M co founder at Artemis, sir. How are you doing on this fine and cold morning? Very well. Thank you. And today we have someone who needs no introduction to stable coin space, Rob haddock, general partner of dragonfly, Rob. It's an honor. Thank you for joining us. How are you, sir?
Speaker 1 00:45
Honor is all mine. Appreciate you guys bringing me on to I think this is what? Number four, number three.
Andrew Van Anken 00:50
Oh, we've done so many I've lost track the stable coin stats. We can't even keep track of our own stats. It's a little disappointed. A quick disclaimer, before we get into things, I need to remind you that the views or opinions of our contributors today are their own and do not necessarily reflect those of the companies they are representing. Nothing we say should be taken as tax, financial, investment or legal advice. Do your own research. And lastly, before we get into the stats, I'm thrilled to remind you that this podcast is made possible by Visa and powered by Artemis. So once again, the theme of this show tends to be, Anthony, you go to somewhere very nice and warm while I stay home and continue to color charts in both of you were at money 2020 this past month. And I believe also you're both at token 2049 curious what the attitude of money 2020 was, and especially, how did it differ from token 2049 Yeah.
Speaker 1 01:37
So anyone who doesn't know what money 2020 is, and I'm guessing most of your listeners do, but it's basically the biggest FinTech conference in the world, and that's inclusive of, call it super FinTech, but also very inclusive of, like, payments, banks, anybody who wants to be in digital finance. And so how different it is than token is, like, probably as different as two things focused on a digital asset can be right? Because when you're at token, and especially in Singapore, it's really a retail sort of conference. So you go and, like, there's all these, like, big places where people are chilling, you like, different types of tokens and protocols, and I walk through the floor of token, and I gotta be honest, like, I invest full time in this space, and I know, like, maybe 50% of the projects that have booths, it's just, like, very, very different. There's a lot of interest. But people also really want to talk about stable coins. They really about stable coins. They really want to talk about reward use cases, but that's like a segment of what they do. And then you go to money 2020, and it's all of the big banks, all of the big payment networks, all of the big payment service providers, and all they want to talk about is stable coins. Right now, it's basically stable coins and agentic commerce. And it's actually shocking to me, because there are all these things that we could think about and talk about when it comes to what's happening in the land of FinTech, what's happening in land of payments, but the only topic right now is stable coins or agentic commerce. That is it. And I would tell you that two weeks ago, I was at the Fed, and Governor Waller gave a speech to start this conference that they called the payments innovation conference, and it was all about bringing stable coin issuers and other digital money movers into maybe something like a skinny master account, or doing more innovation around payments. And if the Fed is talking about it, you know, the banks are talking about it. You know, the PSPS are talking about it. So it's the top of de jour. It's very clear that every single company that you've ever heard of that is doing anything around finance is actively working, thinking and moving towards stable coin rails, right now,
Andrew Van Anken 03:31
that's a great summary. Rob Anthony, would you agree disagree? Or how did you see the difference between
Anthony Yim 03:36
the two? Yeah, absolutely. I mean, I think I can provide some like anecdotal perspective money 2020 is the first conference I went to that I actually saw a lot of my Harvard Business School colleagues at, and they were all talking about stable coins. And up until this point, I have, like, never met another Harvard Business School person in crypto within rare occasion. But like the crowd between sort of the crypto conference and something like money in 2020 like a mass market. Like a mass market FinTech conference, it's just like completely different. And when I was at money 20, I got a chance to meet up with some friends from top consulting firms, and one of them, who's a Partner, came up to me, and they're like, crap. I should have taken this stable coin project back in January when I was offered deleted but I thought it was a scam. And you know, clearly that's not the case. I don't think same coins obviously are a scam. They're very important. And it's just like, not only is the Fed talking about it, but everyone on the ground is autonomous, the private companies and all these sort of, quote, unquote we use this term in crypto is, like, normies, right? Or like, hey, like, Wait, actually, this thing matters a lot, and so it's happening.
Andrew Van Anken 04:38
Which one has better after parties? Money, 2020, or 2049,
Anthony Yim 04:42
I wouldn't know. I've I need my beauty sleep to function well as a co founder,
Speaker 1 04:47
that's a great answer. Like he's sitting here on the podcast with his largest investor, and he's like, Yeah, I don't do the after parties. You know, it's all work, no play whatsoever. I love that.
Andrew Van Anken 04:55
I mean, he looks good too. He looks well rested, so maybe he's actually telling the truth. It depends
Speaker 1 05:00
on what you're solving for, you know, if you want to go to the club afterwards, you know, maybe token, but great events in money, 2020, at both.
Andrew Van Anken 05:07
That's good. That's good to hear. Well, we have an exciting update, because this past month, we released our survey on stable coin payments, all things stable coin payments, and we dragonfly castle on Adventures in Artemis, we did a survey, I believe we released it last May, where we were one of the first to show what our estimates are of actual stable coin volumes related to payments. This is not lending, trading or anything like that. It is really stable coin focused payments. And a few weeks ago, we actually released an update to our survey where we are actually finding that payments volumes are growing 70% since February 2025 and what we're looking at now is a chart of different volumes of P to P versus B to B versus card. And you can really see that B to B is really just exploding here and leading the data. So Rob, the first question to you an actual stable coin question is, why do you think the growth in B to B has been so explosive? What do you think is driving this trend?
Speaker 1 06:09
Yeah, so to me, it's not surprising. We've been investing in this trend for a while. I've written about this a little bit, but if you look at the last call it 15 years of payment innovation, there is actually one trend that I think really sticks out. I mean, there's a bunch, but one trend that really sticks out to me has been that the movement array from call it traditional correspondent banking rails to alternative payment networks, has continued to increase and increase at a accelerating rate of adoption, specifically for those who are less well served by the correspondent banking system. And those people are really call it this, like SMB tier of companies, as well as some of the, I would say, outside of the normal economy type companies. So things like commodity brokers, things like some of the like global international shipments for inventory management, certain types of inventory, flows, those types of people have just not been well served, especially as they move money globally by correspondent banks, right? And so what we've seen is a move, and this is pre stable coins to things like wise for business, or air wallets or other types of tunes, right? Other types of global call, alternative payment networks that are doing things often like pre funding liquidity in a bunch of different countries, and then debiting and crediting people's accounts. And so it looks like this is great user experience, and it's, you know, looks maybe instant, or close to instant, right? But you're basically getting charged some sort of like capital cost and platform cost, et cetera to do that. Well, all of those products have absolutely blown up over the last 1015, years, and stable coins are just a better alternative payment route, right? Like those companies are still not well served by the correspondent banking system. The correspondent banking system, if you aren't one of the largest clients of JP Morgan is really, really hard to navigate. If you're in the correspondent banking system and you're in a non call it tier one country, it's hard to navigate. You don't get great service. They don't want to take settlement risk, or, you know, any sort of counterparty risk, so you end up having, you know, multiple days to weeks of actually settlement right? It's really capital and inefficient, and a lot of what happens in utilizing the course money banking system is it's opaque, so you actually don't even know, like necessarily, when you'll settle right? And so the reason those people have moved to these kind of digital first products has been because they are just better served. They are the core customer. Now all of a sudden, and we've seen a lot of people understand that we can do that better with stable coins, and a lot of those companies have started to share started to shift over and so we've seen that real acceleration for those types of use cases over the last it's really picked up over the last 18 to 24 months. Yeah.
Andrew Van Anken 08:51
And do you think those stable coin companies will kind of, like, replicate that wise playbook for business, where now we see like, tokenized treasuries, tokenized private credit like, do you see them then, like, further, moving up the stack and offering these types
Speaker 1 09:03
of products? Yeah, absolutely. I mean, stable coins are somebody else said this. I forget exactly what was, but they called stable coins like digital oil. And I think the reality is that you have to have that unit of account that everybody uses to be able to go and then do tokenized treasuries, be able to go then do other tokenized assets, right? But the ability to move assets 24/7, with programmatic yield generation, programmatic money movement, right to be able to have something that is transparent and that can coordinate trust that's clearly better than what we have already, but you needed that proliferation and liquidity and that unit of account to be able to do these other things. But I mean, you're seeing it right now at some of the fintechs, specifically where they offered stable coin transactions before, because there was like US dollar demand and whatever locality they're in, but now, all of a sudden, they're swapping you into some other type of tokenized asset, or allowing you to trade other tokenized assets, because of the fact that there's demand for that as well. And now you have this. What it is between those pairs?
Andrew Van Anken 10:01
Yeah, that makes sense. Why don't you think we've seen so much growth on the P to P side, and it's kind of been flat, but on the other end, you know these companies like wise, I mean, Western Union even just released a stable coin. Remitly, all these, like, volumes have been growing, but we don't see this, like, massive shift to stable coins. Why do you think that is? It'd be interesting
Speaker 1 10:20
hearing Anthony's perspective here a little bit. Because little bit, because you guys obviously know the companies that you surveyed better than I do, but I think some of this is probably the just the sampling of who we actually sampled for this report, which is that it was definitely more crypto natives on the P to P side who have been doing this already and were very comfortable doing this, right? I think when I look at domestic P to P, we've obviously Venmo works really well for Americans, or if you're in Brazil right now, you know, people, everybody has a pics number, right? And they'll send each other their picks, numbers, right? And that's very seamless. You know, several points don't necessarily offer a much better product yet today in a lot of those use cases. That said, I think we are seeing some pickup at like, you know, some fintechs themselves have started supporting this, right? But they're not necessarily. The Crypto natives, and the biggest stable coin P to P transfer providers today are like binance pay. And I actually don't think binance Pay is growing that quickly in terms of new users, and they're already pretty saturated in terms of who they serve and how they serve them. And so I think this is a little bit just that that market ran ahead of B to B before people started to understand these other use cases. And now we're seeing slower adoption pick up in less crypto native distribution platforms, right? But I do think we'll start to see p to p stable coin transfers at some of these fintechs, specifically. And the only thing that might be tough there for us to parse out from a data perspective, is that some of those things happen kind of like on an internal ledger of that whoever that Fintech is, and so you have to get the data from them, because they're batch settling end of day, so not actually like streaming every transaction to the blockchain itself. And so you can't necessarily understand exactly what you know each use case is.
Anthony Yim 12:02
Oh, yeah, I think I think Rob is more or less correct. So I guess for the audience members who are listening, one thing to clarify is that this is all off chain data provided by companies that have KYB or KYC their users, and so it's exclusive of like a non KYC, like raw wallet to Wallet transaction. And we did it this way because basically, there's so much sort of bad estimations of stable coin payments volumes out there that we wanted a more conservative Ground Truth Number. And so to Rob's point, it's like, I don't think there is explosive growth for these like KYC, peer to peer transaction companies, because a it's like, if you're making a cross border transaction, you're probably fairly well served by companies like TransferWise or Western Union. If you are bypassing Western Union, you're just doing wall to wall transfer, you're not going to be showing up on here. And if you're doing domestic transfers, you know, the biggest countries are that would support these, like PDP payments. They already have things like Venmo or like pics, or like UPI or and so I think PP is in kind of like a funky spot. But I'm sure if we just added raw wallet to Wallet transactions that are not KYC, I think that number would be much
Andrew Van Anken 13:22
greater. Yeah, that makes sense. All right. Well, if you want to be featured in our survey going forward, we'll most likely be doing one, probably in February or March of next year. So feel free to reach out to us. The last thing I want to touch on this is that we see this trend of only like as a power law of stable coins, if you will. So what we're looking at here is the distribution between payments of different stable coins. And by far, the vast majority of payment providers are using either tether or USDC. So tether here is about 80% share of payments, versus USDC, which is about 20% of payments. But when you look at things like R L, USD and usdg, which two stable coins that actually have like broken the $1 billion mark this past week, R L, USD, ripples, USD has actually been primarily used in lending, so about 50% is locked in Ave or Euler, and usdg is primarily held by custodians these companies like Kraken and Robin Hood for possibly, like, back end use cases, not as used in payments. Rob actually very curious to get your take here, like, how do you see these different use cases or like, personas of stable coins evolve over time and yeah, curious your thoughts on our USD and the division between tether payments and our ESD for lending,
Speaker 1 14:42
yeah, what we're starting to see now, and I wrote about this a little bit last year, which is that from a stable coin issuance perspective, that's becoming more commoditized, and so what you're seeing is all of the stable coin issuers are either just paying for distribution, so even tether. Is doing this. They bought rumble, which then they came out and said they're going to put USAT into rumble, and they're going to distribute to the forget how many users are on that, but it's in, I think, in the hundreds of millions of users, right? And so they're paying for that type of distribution. They're investing in a lot of different types of companies that would use stable coins. Circle is doing some of the same thing. They're investing in different companies. They're also actually paying yield back to some protocols and some apps and et cetera, for distribution in the usdg that is their kind of their go to market is that, hey, we'll give you a lot of this yield as part of this distribution, and to the people that use them. And then roust to your point, ripple is basically taking the other side of paying for distribution again, right? But they're not doing it through yield generation. It through yield generation. But what they're actually doing is they're buying a bunch of companies who might use stable coins, right? They're buying hidden Road, which is, well, at any given time we'll have like, $2 billion of loans outstanding in stable coins, right? They're buying a G treasury, which is a basically a fortune 500 or call it typical company treasury management software solution that helps people move money around the world, right? And so you start to see what is happening. And everybody's realizing that just being a stable coin issuer is table stakes. You have to have deep liquidity. You have to have the ability to have the right APIs. You have to have mint redeem. But you can't just do that, you have to be able to monetize and distribute in a bunch of different ways. And so that's why you've seen tether go and invest in those companies and by rumble. That's why you've seen circle go and launch CPN and arc and trying to become more of a payments network. That's why you've seen ripple buy these companies that you've talked about. It's because they understand that issuance is one part of the value chain, and it's not the stickiest part of the value chain, all right? And so you've seen these like deep network effects that existed for the early movers. And now that everybody's moving into that next generation, they have to do all of these different things, right? And so that's why we've seen bridge kind of get into issuance. I think we're gonna see a lot more companies get into issuance, and that's why we're starting to see these. Issuance, and that's why I started to see these white labeled solution providers also start to pick up steam, both in crypto natives and non crypto natives, as people have decided that maybe I want to have my own branding around it, and we have companies like agora and Paxos and bridges are powering and Athena and chain that are powering that. So I expect that we'll continue to see a little bit of fragmentation over time, but that the winners will still continue to grow at a really, really steady pace.
Andrew Van Anken 17:29
So like, maybe these companies aren't paying distribution costs, per se, but they're buying like, five, $10 billion companies that, yeah, it's
Speaker 1 17:37
distribution costs one way or another, right? It's just like, whether I'm paying yield or whether I'm buying companies that I can stick my stable coin into. Paulo loves to go on up during conferences, and I've been up there with him, and at token, we did a stable coin panel, and he loves to say, Listen, like we don't need to pay for distribution, which is obviously incorrect, because he is paying for distribution. He's just buying companies instead of paying out the yield. Well, I have a question
Anthony Yim 18:01
here, actually. So it almost sounds like, by offering these wider ranging services, these issuers are starting to look more like a bank. What do you think is going to happen to banking in that case? Right? It's like we at Artemis use a bank to manage our treasury, right? And so I see this like state coin, crypto companies versus bank actually play out here too, where it's not just about, you know, a year bearing stable coin, there's these, like other services, that are competitive against each other.
Speaker 1 18:27
Yeah. I mean, they're absolutely becoming competitive, right? So, I mean, what did genius Act actually allow? It basically allowed for narrow banking. Narrow banking is making a comeback in the US that should scare every single bank out there. There are 5000 banks, chartered banks in the US, even before stable coins, probably 4700 of them have no reason to exist, right? They're just, like, clearly not offering any differentiated service whatsoever, like, they've just a legacy of what was a very fragmented banking system, right? And so we've started to see all of these technology companies, the coin bases of the world, bridges of the world, et cetera, say, hey, they're gonna go get OCC sharp because of the genius act, and they're gonna go get OC charter, but probably gonna offer at least the first narrow banks, and they're gonna figure out how they call it expand B on there, right? So that's number one. But then what you see is I talked about the governor Waller's speech that he did at the payment innovation conference two weeks ago, and it specifically talked about this thing called the skinny master account. Now this is early stages. There's just something they're thinking about, but it's basically allowing access to fed payment rails, not the discount window, not lending, but fed payment rails to technology companies and stable coin issuers to offer the same level of access to liquidity providers and bank networks and distribution partners as the banks themselves, but to do so in a limited way where they can build really digitally native, first, innovative payment solutions on top right. And so if I say, Okay, well now I allow narrow banking for specific purposes, I'm going to give up probably 200 new OCC charters. The next couple of years, which seems to be what they say that they're going to do, and then I'm going to allow for payments innovation to happen. Connects directly into the fed through a app, the technology, the PSPS, et cetera themselves, the banks have absolutely no right to win anymore, other than around credit creation. But credit creation is directly a result of a deposit base, a deposit base that, if they cannot get yield, and they cannot get good, digitally native products will erode, right? So over the weekend, I was opening up a new bank account, right? And I banked with Chase for a long time. We have a lot of money at Chase, and, you know, I'm looking at Chase's highest tier checking account and savings account now, not they're like, Wealth Management products that are up, but the highest tier checking and savings account, their highest tier savings account without going to like, JP Morgan, like, private banking was offering me 40 pips in the savings account, right? Oh, wow. That's the highest tier for having, like, I think the minimum was like, I think the minimum was, like, you have to keep $200,000 in it, etc. And like, imagine, why would I keep any money there? Like, I can go and get yield from all of these different platforms that are easier to use, more digitally native, that are at any given time. And so, yeah, do I take my direct deposit into Chase still? Yeah. And you know what I do? I move it out every time, right? And eventually, I might not even take my direct deposit there. And so my point being is that the banks are still not competing, right? They understand the snake narrow banking thing is happening. They understand that stable coins are going to potentially erode deposit base if I also can do innovation elsewhere for payments. And they still not competing because they need to offer me the deposit or low yield to be able to make spread on the lending that they're doing, but that deposit base is going to erode, which should theoretically also raise the cost of capital, which then should make banks even less competitive in credit creation, right? And so it's a bit of a slippery slope, circular thing that's happening, and all of a sudden, you look at the banks and you're saying, unless you have real scale, unless you're JP Morgan, unless you're kind of one of these big G subs. You, unless you have a real scale like it's hard to see how you compete going forward on any vector, relative to tech, first digitally native, first payments company, relative to some of these specific narrow banks, and then relative to what will be the insurance companies and the alternative credit providers out there who or now have cost of capital that might be closer to you, of the deposit base of roses. So sorry, that was a really long winded answer, but I am pretty bearish most banks in the US, yeah,
Andrew Van Anken 22:31
especially because they don't give out free pens anymore. Like, what's the point all the interest? That's just shocking. Our second chart that really just only goes up over time is this chart of essentially card spend on stable coin rails and actually Artemis, we recently released a page where you can track some on chain card spending at rain, which obviously Dragonfly is an investor in. But obviously, if you look at the data, it's absolutely compelling. Rain went from about two to $4 million of on chain spend in January 2025, and is now at almost $200,000,000.10 months later. This chart is probably one of the fastest growing I've seen in crypto. But what's also interesting is that even though stable coins are disrupting these traditional payments methods, rain does run on visa. So Rob a lot of questions here, but I'm curious like, how do you think these visa systems, these legacy payments and stable coin systems, interact? Is this like a new opportunity for visa to onboard all these customers that are not traditionally served 100%
Speaker 1 23:38
two things are happening with rain, and like you mentioned, we're an investor. One is that they're serving clients who already have cards, you know, traditional clients who want to be able to do better money movement globally, who want to be able to reach more customers globally, more easily, right? With somebody who has a global compliance footprint, who's able to do KYC IML, and who's able to potentially settle in stable coins themselves. And so rain has actually a bunch of traditional clients who are swiping the car, and then they're actually swapping Fiat to stable coin, and then they're settling with Visa in that stable coin itself, in some sort of potentially emergent market using visas, auth and those rails. But then obviously, a big part of their business today is also all of these people who are looking for ways to use and spend stable coins, but to date, haven't been really able to use them at the merchants, right? And so we seen them really large growth in rain, but rain is powering people like cast and plasma one and avalanches card and ether phi. And they publicly announced a couple of the exchanges. I don't know which ones are public. Which ones are public and which ones aren't, so I don't want to say it, but they're like winning all these clients. We're just saying we have big stable coin balances that we know people want to be able to utilize, and the quickest way to do that is to be able to utilize them with a card that is able to do the authorization directly on. On traditional and existing rails, but then do call it the money movement on the back end, and stable coins. And one of the interesting things about rain, relative to some of these other cards, is that they have the ability to do everything entirely on chain, from taking the stable coin providing credit real time, from a credit pool that they have on the thing called credit coupe, to then pulling that stable coin programmatically out of any wallet that it sits in, to sharing interchange fees with customers or clients programmatically on chain, to then securitizing any of that credit and then settling with Visa in stable coins. And visa actually talked about direct stable coin settlement at their last earnings call about how that's been so relatively small for them, but that's actually one of the fastest growing parts of their business, and it's much better from a cost of capital perspective. And then what happens is, right now, the merchants mostly want to take Fiat, and so you're still going through the acquirer. But let's imagine a world where rain is the issuer, which is they are today in many of these cases. But then the stable coin, or the merchant wants to actually take stable coins, because then it's usable on that side as well. You could theoretically replace the acquire as well, which all of a sudden, what does that mean? That means similar to a conversation we just had, you've gotten rid of the banks again, right? Because you've replaced the issuing bank, and you directly press issue the acquiring bank. And so that's a long way out, but it's really interesting what we're seeing in terms of bypassing a lot of these traditional banking rails.
Anthony Yim 26:29
Yeah, banks are just not having a good day today. I mean, I think that's really fascinating, because, you know, we were chatting about this in May 2020, where it's like, I think I really like your summary of that, that we're seeing this sort of fourth party model for payments really collapsing, and rain is shrinking, that two party model, and the banks are the ones that are losing out. And I think that, to me, is like, I think it's gonna happen much faster than people think. That's why not everyone is paying attention. And I don't even know if, like most banks, aren't even aware of this at all. Do you think that these issuing banks are concerned, or are they just, like oblivious, because of sort of integrated dilemma, I think
Speaker 1 27:05
people are starting to understand, I think Governor Waller's statements two weeks ago, I actually heard a lot of people talk about that at money 2020 that was, I think, something when genius act happened, and then when Governor Waller made those statements, I think people had to take notice. There's still, I think, especially for the large banks, there's a perspective that we have these huge deposit bases, like, we're still gonna be able to provide low cost of credit. The stickiest thing in financial services is your direct deposit bank account. And so, like, people don't want to switch that, and so they still believe that they're going to be fine. But I think everybody's thinking about it right now, the Fifth Third Bank. I don't know how big Fifth Third Bank on a relative basis is, but call it a mid sized bank, not a G SIB, but a name that a lot of people know. Right? The CEO got up on stage at this fed conference that I'm talking about, and he said somebody asked him, he's like, Listen, do you think that the incumbents, like you are going to be able to adapt quick enough to a world where stable coins are used, or do you think that the innovators will win? And he directly said on stage, and it was publicly televised, if history repeats, the innovators will win, which is why Fifth Third is trying so hard to get ahead of it right now. And so that tells me that banks like Fifth Third, and if Fifth Third cares, then every bank smaller than Fifth Third should care. It has to be thinking about this right now and how to react and how to set themselves up for future success.
Andrew Van Anken 28:31
Yeah, no, that's pretty stark difference in language from over almost two years ago. The last emerging trend that I want to cover is x 402. Volumes. I, for one, welcome our agentic commerce overlords, but we're still seeing very small payments here. Volumes, it's about 400 to 500,000 a day, even though it was just released back in May. And for those who are unaware, X 402, is a protocol for allowing payments to happen, essentially through HTTP It was created by Coinbase, and the idea was that payments would be handled over coinbase's base network. So Anthony, what do you actually think about this? Do you think there are actual opportunities with agent to commerce, or are we still early?
Anthony Yim 29:11
I think there's a long term opportunity. I think we're still early, and right now, most of it is just marketing and like kind of rebranding of traditional API powered payments. We at Artemis are building agents too, and the way that you access an agent is actually through an API. And so I get that a big part of agentic payments, like, hey, one day, agents will be transacted with each other. These agents may not be like humans. They may not have, like a social security number, or, like, you can't really even KYC it, but I think we're still a bit a ways from that. And it's earlier
Andrew Van Anken 29:46
Rob as a VC, what would be an interesting pitch for an X 402 agent that you would get excited
Speaker 1 29:50
about? I gotta be honest. Wait, I'm kind of not excited. So I'll take a step back, right? What is x 402? Really, like, it's really, you call it a protocol. I. But it's really, in many ways, just a standard, right? And it's a standard how to think about money movement utilizing agents and AI, right? There's also a lot of other standards that exist. Open. AI has one, anthropic has one, Google has one. Now, there's a few others, right? It's very unclear to me, like, what standards are going to exist in the future around how to move money through agents. Vast majority of people today who are doing money movement through agents, which are very, very few, are just utilizing stripes APIs. Right to Anthony's point, I say this, and I've been, we've been having this discussion internally a little bit, which is that we've seen so many AI agent protocols raise money. We've seen a lot of them raise money in pretty hot round. Some of them raise money specifically around payments. And we've set all of them out, because when you have six or seven warring standards alone, right, let alone how you think about the core infrastructure and how people access it and like how it gets distributed, it's really, really hard in my mind, to make a singular bet around, like what this looks like in the future, because the market actually doesn't exist yet. What is happening right now is we're seeing it feels a little bit like the early days of people talk about how the internet started in, I guess, 84 or 82 but the intranets and like the internet kind of existed before then. We just didn't agree on a standard until then about how the internet would grow, and then the internet really grew, right? And so for us, my perspective has been that, okay, maybe if it's a best in class team, we'll we'll back them, but for the most part, we're looking for companies that are using traditional distribution, traditional rails, and maybe future proofing themselves, like to Anthony's perspective around agents, but like net new types of payments that are focusing on these types of agentic commerce. It's really hard for me to see how you could build for that today, when there's just no commerce there today, right? Like you have people building for something that doesn't exist yet. And I think there's a key point to make there as well, which is the market when it doesn't exist yet, but it's like, a hot category like this, it still requires a lot of forethought from, like, a lot of the incumbents, right? And so, you know, I said at Governor Waller's thing at the Fed a couple of weeks ago, there was two things that they talked about, and actually money 2020, was the same way. There's two things they talked about. One was stable coins. One was agented commerce. Agenda commerce is so far behind stable coin usage right now that it's so theoretical, but people all believe it's going to happen, but nobody has any idea whatsoever about what that will actually look like. And so investing in that category, unless it's like court in front that could serve a bunch of different people, was
Andrew Van Anken 32:34
really, really hard. Yeah, no, that makes sense. We might as well agree on something first before we start throwing money around. Rob, my last question for you. Almost a year ago, you wrote stable coin payments. Who actually won? Who won this year? And would you change the article at all? Or how would you update a version for 2025
Speaker 1 32:50
Yeah. So I knew you're gonna ask me this question. I had to go back and look at the article to remember exactly what I what I said, and I read through it again, and I think that's like, pretty much exactly how I feel today on the settlement rail side, or, you know, the blockchain side, we're continuing to see a lot of competition around, okay, well, where will payments actually happen on chain today? To the report that Anthony talked about, that we helped out with, stablecoin, payments still exist on Ethereum and Sean mostly, right? You know, there's tempo and Codex and arc and plasma, and these guys that are trying to compete for that, and we're seeing that as incredibly valuable, I think, even like some of the more general purpose ones. Solana and monad are really, really focused on payments. And so I think we're gonna continue to see a war there. The issuers all trying to do things beyond issuance to differentiate their business. The PSPs, a few of them have done really well. We've seen these rumors around, you know, BV and K getting bought and for up to $2 billion and and others. And then we've seen, I think, a lot of the stable coin powered fintechs grow and raise big rounds and grow really quickly. So I think a lot of what I said has turned out to be, I think, pretty true to I guess, pat myself on the back on this podcast. Appreciate you giving me the opportunity. I was always sure, but I think that maybe the one thing that has really surprised me is probably just how quickly the FinTech apps have grown on stable coin rails, and the belief that this is happening globally. So I wrote in that article that doing a new direct to consumer Fintech is really a knife fight, and it's really hard to win distribution, but the growth we've seen across, call it traditional guys who like, like, $1 app in Colombia, who started serving SMBs and stable coin Rails has been just way quicker than I would have thought. And then you have the like, the more crypto natives, like the cast of the world, who are serving that group, who have also seen a pickup of people wanting to actually spend their stable coins at a rate that I think surprised me, even as, you know, big crypto bull, and so that's probably actually been the biggest winner of the year in terms of new money put into, from a VC perspective, more interest, you know, ability to earn money. It's been. In the stable coin powered fintechs. Specifically, they would have been the biggest winner, and we've got one or two bets there, but we probably haven't been as exposed to those fintechs directly as we maybe should have
Andrew Van Anken 35:10
been. Yeah, I'm glad there's so many winners. You know, we just want to keep going up. We just want to keep putting the supply up. What
Anthony Yim 35:16
do you think about plaid? I imagine they wouldn't be in a great spot either. Well, so plaid
Speaker 1 35:20
just has to continue to expand its use cases, right? So, like, I always thought this at the time, but I mean, there is still a very big opportunity set in terms of connecting all of the banks, right? But I think what we've seen in plaid, right, as you've seen it, basically stagnate. I think they raised last year at basically a flat valuation through the visa deal, and which was a down round to what they had done but prior, and it's because they've to your point, like, the opportunity set has just not grown right. And they basically dominated this opportunity. They grew quickly. And then all of these new digital first banks and APIs went out there, and that didn't necessarily need plaid in the same way. And then they started to lose, like, specific use cases. Like, they basically lost all of credit to finicity, which did not own by MasterCard. And so, like, they weren't able to, like, command all of the use cases. But interestingly, like, I do wonder if plaid is supposed to move into stable coins in the same way. I mean, like, look what's happened at mesh. They're one of the companies that has grown a lot this year, but revenue is like flack to down, because their take rates have gone from like, 50 pips to 10, right? And so, like, we're seeing a lot of this, and I think that's only us for there to go. I think at one point people thought plaid was a 10x company, like it was gonna be $50 billion company. I don't think anybody's buying that now, like plaid is probably in its current use case, like a five to $10 billion company will probably stay there for
Andrew Van Anken 36:36
a long time. Rob, thank you so much for joining us. This has been extremely enlightening. And I believe both of you will be at FinTech NerdCon Miami in two weeks. Is that true?
Anthony Yim 36:46
Yeah, I will be on stage with Sam Brunner from andreesson and Amit from bbnk to talk about stable coin payments.
Andrew Van Anken 36:54
I mean, huge shout out to Simon Miami. November. It's cold everywhere else. What better place to do it. Rob, how about yourself? Yeah.
Speaker 1 37:02
I mean, that's how he convinced me. It was like, Okay, well, I can either go all the way to Argentina for dev connect, or I can take a two and a half hour flight to Miami and sit in 85 degree weather when it's, you know, 40 degrees in New York City. And yes, same thing, I'll be there. I'd love to connect with anybody who wants to connect. And I'm doing a panel with Nick Carter and two other people. And I apologize to those people that I don't know exactly who's on it right now, but basically we're just talking about like, Will stable coins overtake traditional payment rails for traditional payment use cases? Or do we think that will be kind of a
Andrew Van Anken 37:35
separate category? Wow, we'll have to have a who did it better? You know, Anthony or rob at all the conferences, Rob, where can people find more about
Speaker 1 37:43
you? Check out my twitter at haddock, my last name, H, A, D, I, C, K, M, Matthew, For my middle name. Or you can find me on LinkedIn, but I'm
Andrew Van Anken 37:50
less active there. And Anthony, how about yourself? Where can
Anthony Yim 37:53
people find you? Yeah, you can find me on x at my full name, Anthony, Yim. Or you can also find us at Artemis.
Speaker 1 37:59
You know, I'm a boomer, because I still say Twitter and not x, I'm
Andrew Van Anken 38:03
with you. I had to force myself to say x. Well, this is the old podcast, folks. You get the old people today. Everyone Tell me about that. If you haven't already, please subscribe to tokenize on Apple, Spotify, or whatever podcast you get them. Finally, if you enjoyed this and you want more, leave us a review. It legit helps others find The Show, stay stable everyone.