On Ep. 102 of Tokenized, Simon Taylor, Head of Market Development @ Tempo and Cuy Sheffield, Head of Crypto @ Visa, are joined by Nick van Eck, Co-Founder & CEO @ Agora and Shivani Siroya, Founder & CEO @ Tala to discuss Agora's OCC charter, Tala seeing credit access as missing stablecoin adoption layer, Blockchain.com and NYSE explore 24/7 tokenized stocks and ETFs and more!
On Ep. 102 of Tokenized, Simon Taylor, Head of Market Development @ Tempo and Cuy Sheffield, Head of Crypto @ Visa, are joined by Nick van Eck, Co-Founder & CEO @ Agora and Shivani Siroya, Founder & CEO @ Tala to discuss Agora's OCC charter, Tala seeing credit access as missing stablecoin adoption layer, Blockchain.com and NYSE explore 24/7 tokenized stocks and ETFs and more!
Timestamps:
Tokenized is sponsored by Visa
A world leader in digital payments, Visa is bridging the gap between traditional financial institutions and innovative blockchain networks, helping players in the payments ecosystem navigate the ever-evolving world of tokenized fiat currencies with confidence and ease. Learn more at visa.com/crypto.
Tokenized is presented by Bridge, a Stripe company.
Just like the internet made information global, stablecoins are making money global. And Bridge, a Stripe company, is the infrastructure powering that shift. Built for speed, scale, and simplicity, Bridge helps businesses send, store, convert, and spend stablecoins instantly, all without borders or having to navigate the complexities of crypto. Learn more at bridge.xyz
Tokenized is also presented by Fireblocks
With over $100 billion in monthly stablecoin volume, Fireblocks powers stablecoin strategies at scale with infrastructure that enables PSPs, fintechs, remitters and banks to issue, move, hold, and manage stablecoins. And it’s all done securely, at scale, and with built-in compliance. Learn more at fireblocks.com
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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
Sy Taylor 0:10
Welcome to Tokenized, the show focused on stablecoins and the institutional adoption of tokenized real-world assets. My name's Simon Taylor. I'm your host, author at FinTech Brain Food and head of market dev at Tempo, and I'm joined as always by Kai Sheffield, head of crypto at Visa. How you doing, Kai?
Cuy Sheffield 0:26
I am great. We've got some amazing guests, a lot of news to cover. Let's get into it.
Sy Taylor 0:31
Yeah, speaking of amazing guests, I think this is the third time a threepeat for Nick Van Eck, co-founder and CEO Agora. How are you doing, Nick?
Nick van Eck 0:38
Great. Thank you for having me.
Sy Taylor 0:39
Good man, but making a long over debut is Shivani Shiroya, who is the founder and CEO at Taller. How are you doing, Shivani? I'm
Shivani Siroya 0:48
doing well. Thank you so much for having me.
Sy Taylor 0:50
No, excited to have you on. You guys do way more behind the scenes than I think people realize. So excited for people to learn more. Before we jump into the show, got to remind viewers and listeners that views of our contributors today are their own and might not reflect those of companies they represent. And please don't take anything we say as tax, legal, or financial advice. And also happy to remind you that this episode is sponsored by Fireblocks. Tokenized is sponsored by Fireblocks. Fireblocks is the stablecoin infrastructure of choice for global businesses from Visa to WalPay to Bridge to Revolut. With over $100 billion in monthly stablecoin volume, Fireblocks powers stablecoin strategies at scale with infrastructure that enables PSPs, fintechs, remitters, and banks to issue, move, hold, and manage stablecoins. It's all done securely at scale with secure built-in compliance. With Fireblocks, you get complete control to build your own stablecoin orchestration layer, create payment accounts, manage liquidity, and access on and off ramps in over 60 currencies. Makes it easier for you to build and scale and expand your business globally. Learn more at fireblocks.com. Okay, story number one this week is the OCC approved three national trust bank charters in a single day. One for Agora, Catena, and Bastion, the ABCs of charters, it seems, taking 2026 as tally to at least 12. So, Catena is the AI native bank from Circle's co-founder Sean Neville. They're looking for that de novo charter covering custody, investment management, and trust services for AI agents specifically very cool. Bastion is converting its New York Trust Company, chartered by NYDFS in February, and it's got six months to complete before the approval lapses. So lots going on with Bastion. I think they're behind Sony USD, and we've had the CEO on the show before. But Nick, your de novo Charter with 10 million in working capital requirements coming soon, moving AUSD from Bermuda into this new national bank. Very exciting. Tell us more about this conditional approval and what it means for you.
Nick van Eck 3:15
Yeah, this is huge for us. This is probably the most important milestone in the company today. What it immediately unlocks for us is being able to serve the U.S. We've also focused the last year on on really developing the product suite to be a one stop shop for businesses, and so a lot of this has been quiet. But we can talk a little bit more about it now with the bank on day one. We'll be able to offer custody, stablecoin issuance, transaction based services, and then investment advisory and treasury work. And what this really enables us to do is be the one-stop shop for companies that are adopting stablecoins. And so, if you're an enterprise, the first question folks typically ask is, "How do I hold these assets? The second is, "How do I get from you know my existing environment to this new environment, right? So fiat to stable, and then the third is typically what asset am I using? And so we're now able to solve that out of the box for traditional businesses, whether they are commodity companies, telcos, like we announced last week, and this is really just the beginning. I'd also highlight the reason we started with the stablecoin issuance in the first place is we really believe that to be one of the core differentiators because we control the economics and float income behind the stable as well as the off-ramp costs. So when we talk to enterprises, they care about a number of things. One being regulated. Two, how much can I earn from deposits on my platform? And then the third is what are off-ramp costs. They are not familiar with the crypto five to 10 basis points to move from stablecoins to fiat and abhor that. And so by saying, hey, we can. The majority of the economics from our stablecoin with you, as well as delivering a zero fee off ramp experience, that's super attractive to them. And so we're very excited to go live, and I'm super excited to you know to bring the business back home.
Cuy Sheffield 5:14
Yeah, congrats! It's amazing to see, as we've talked about on on this show, just the number of new charters and the innovation and competition that that's happening, I'd love to hear more your thesis on the the telco side of. I saw the announcement of a virus network. You know, telcos have played a huge role in a number of emerging markets. And Trevania, I know you're you're close to that. It was one of the first kind of stablecoin partnerships that you know has really highlighted the role of telcos in in Latin America. So, how does the charter fit with some of the the telco opportunities? And tell us more about Iris.
Nick van Eck 5:48
So, a lot of the businesses that we're working with and planning to announce over the next call it six to 12 months are really large scale traditional enterprise. And so, the charter gives them the comfort of oh, I'm working with with a banking partner and someone that is highly regulated and I can trust with my assets, but specifically on the telco side, and this is what I think is really interesting, is you know even from when you guys started the tokenized podcast, we've moved so much from crypto only use cases to traditional corporates using this technology, which has always been the goal, and so I'll talk about the first telco that is you know we've gone live with is Nuevo Tel in Bolivia. Bolivia, as I think many folks know, is highly dollarized. A lot USDT usage actually, and so these telecom companies are trying to think about how they can own more of the customer relationship, and then also increase the ACVs, and so with them, they're going to be offering wallets and dollar stablecoins to their Bolivian customers, powered by Agora. And so the hope is that hey, you know, in this country where there's really high inflation, we can become more to these customers than we are today, and then also further monetize them, but also really just deliver more value, and like that's always been you know our mission is how can we really export U.S. capital markets and you know quality financial services to the rest of the globe, and that's what we're doing with Iris, and it's just the beginning. They are working with a number of very large scale companies that you would know the name of, and you know, so they announced this at the Avalanche Summit, and Racketon was on on stage with them. So you might be able to guess who who's next with who we're working with there.
Sy Taylor 7:28
Yeah, no, Nick, we were talking before the show started about like you've got this conditional approval, but the wave is really in front of you as far as your pipeline is concerned. That resonates with what I'm seeing at Tempo. I'm sure with what you're you'd seen at Visa Kai, that the hyper growth has started, but the the wave is yet to come. Shivani, I know kind of emerging markets are near and dear to your heart, Taiwan. And I saw you nodding when Nick was talking about the the telco use case there. What are your thoughts on on this and and and the role of stablecoins?
Shivani Siroya 7:57
Yeah, I mean, first, Nick, congratulations, getting through a lot of the regulatory hurdle is is immensely challenging. So I can appreciate that. Tallah works across 15 emerging markets, and so we have you know navigated very challenging regulatory impairments. So it's no small feat. I would say that what I am seeing, you know, as we see the fact that 12 OCC charters have been passed out. It's amazing to see again that you know the settlement layer is now starting to be solved. But to your point, Simon and Kai, I think and Nick, I think the piece that's still missing is the access to capital and access to credit piece. So as we think about how do we actually increase transactions and again engagement of stablecoins. What we're still missing is giving consumers purchasing power and liquidity, and so that's really where Tai comes in. Is for the last 10 years we've been working on the hardest part of the problem, which is emerging markets, unsecured credit, thin-filed consumers, and how to underwrite them. So a market that we are also working in, we, you, and I should pay me offline partner on this. Is Bolivia, and to your point, we're working with a lot of telcos across the globe, large ones that many of you have all heard, like an Airtel, others in Mexico, and within their mobile money marketplaces, what is still non-existent is actually unsecured access to capital, and that's where we can come in and actually be the embedded underwriting engine. And so, what we offer both in our own DTC channel, so we've served 14 million customers to date across our 15 markets, but we're now offering our credit engine and our own liquidity to partners. And so, this could definitely be something that you know might be something that we can collaborate on.
Nick van Eck 9:46
100% Tala actually came up yesterday in a conversation that we were having, and I was like, "Well, that's great. I'm on a I'm on the podcast with Shivani tomorrow. But I I would quickly just say even before like you know Kai gets going, we hear about. Credit all the time on the B 2b side, and folks ask us for credit, and we say, "Hey, like that's not our business, but we'd love for you to meet X Y Z person. And so there is a lot of partnership opportunities across the stack here.
Cuy Sheffield 10:11
Yeah, I was going to say, is it almost like in your mind, Shivani? It's this kind of unbundling of payments and credit when you see these new charters that are they're purpose based charters for issuing a stablecoin, not kind of full service charters for lending, and so now you have these new payment companies that are coming out with these full reserve stablecoins. They're not doing any lending, but there's still demand from their clients to be able to have some type of of lending offering. And so, do you see each of these new charters driving more demand for on-chain lending and other providers that can then complement and sit on on top of the products that they offer?
Shivani Siroya 10:50
I mean, I think you're spot on here, right? I think first is actually gaining the consumer's trust, which I think these charters start to get at. Which is, you know, again, how can we increase the trust so consumers are actually adopting and actually, you know, opening up these wallets. From there, it's actually saying, okay, to actually be able to retain these customers and give them that value, we have to be able to bring in traditional financial services, and that is where I think credit plays a big piece, not only for the consumer side, but if we think about how traditional banks actually make money, it is through lending of these deposits, right? And so it's a win-win for both parties here, because again, wallets are actually able to earn more off of the deposits consumers are bringing in, and consumers are actually able to make more transactions, which again creates that kind of flywheel effect across the marketplace for businesses as well as these consumers.
Nick van Eck 11:44
Yeah, and this is actually something that we were very intentional about as well, right? We have been hearing for two years, hey, can you provide us credit? But from our perspective, we wanted to remain capital light, not take balance sheet risk, and work with a really wide array of credit providers for our customers because they're you know asking for card backed receivables financing settlement you know liquidity financing you know pre funding as well and we would love to work with the Tallahas of the world and a number of other providers to go serve a wide array of use cases which is I guess going back to even how you know Simon you kicked this off right three different you know, new trust charges this week. People ask us, "How are you different from Augustus or Airborne? It's like their core business is lending, right, and doing many other things that we don't necessarily want to engage in ourselves.
Sy Taylor 12:32
Yeah, I think that's such an important nuance, Nick. That even versus Sebastian, who helped Sony create USD, I think your approach is quite different. You know, they'll they'll give you the pieces to manage your own reserves to kind of you know have all of the kit you need if you want to be like ultra sophisticated on the treasury. I think you're coming from a different position, which is hey, we're the one stop shop, and and I wonder how you think about that competitive lens and what you're hearing from corporates. Like, is the desire that you're seeing to just be the easy button? Hey, make stablecoins work. I don't want to have additional costs, and I just want this to go away. And do you think that's going to be more of a trend into the next couple of years, or do you think people are going to want to get down into the and get their fingers dirty a little bit more?
Nick van Eck 13:16
Yeah, I think it's like any market. There's a wide range of desires, right? I think what we're seeing for the most part is people want simplicity. I think, of course, if you are a large enterprise, though, you may want redundancy, right? So you're sure maybe we can provide custody to you, but you may want to have a second custodian, right? It's like how every company has more than one bank account just for redundancy' sake. So we'll see, I think a bit of mix and matching, and it's also like, what are you really trying to accomplish? Like, we have a very large network of partners, right? For example, you know, one company that we're working with very closely is, you know, on the cards side. We don't do cards. We don't have a desire to do cards, and we get roped in for that use case because we are a fit for their stack, right? And sort of like another piece of it, and so I think there's going to be a large part of the market that wants that one-stop shop, but there will absolutely be more complex use cases or localized use cases where they may want different providers.
Sy Taylor 14:11
It's going to be interesting to watch. Congrats again. We do have some other stories this week, so I'm going to move us to story number two, which is the EU's central banks want the meeker rule, forcing stablecoin issuers to park somewhere between 30 and 60% of reserves in banks scrapped, but they're also going to back a ban on multi-jurisdiction stablecoins. So kind of a mixed bag here. So instead of being reserved by the deposits, it would be reserved by short-dated securities and government debt, which seems like progress, but I know that sort of Mika has been something you've been paying close attention to for a while, Nick. What do you think about this and the EU's position and Mika's position? Two steps forward, one step back. Two steps back, one step forward. Where's your head out of this?
Nick van Eck 14:59
It's. Definitely not the ideal outcome for businesses and consumers, but I understand the position that Mika is taking. The regulators in the European Union are taking, which is we don't want to be subservient to the U.S. regulators, right? And so, Genius and Mica stablecoins will not be compatible with one another. There's sort of this gray area right now with I think one or two issuers which are technically compatible with both, but that's not going to be the long term outcome. You know, and we've spoken with you know regulators in the EU, and the main reason is they want to have control over the things that are operating within their jurisdiction, right? And if genius stablecoins were compliant, you know, in the EU, everyone would just go to the U.S. and they would lose a bit of that control. There are also some real risks that they are concerned about, which is in the United States under Genius, you can charge off-ramp fees, and in the EU under Mika as it is today, you can't. And so, like for whatever reason, let's say there was a run on a stablecoin or there was some issue. The concern that they have is, let's say there's you know 10 basis points of off-ramp fees in the U.S. but no off-ramp fees in the EU. That'll suck liquidity out from EU-based banks and be a systemic risk problem as stablecoins scale. So I think the ideal solution is, hey, I operate my business in the U.S. and Europe. I can send this asset back and forth, no problem. I don't know if we'll get there. Our fingers crossed, but I do understand the regulators in the European Union's positioning and why they want things to be a little bit different.
Cuy Sheffield 16:32
This seems super tricky to me to just figure out how this is all going to evolve over the coming years, both in Europe and then as other jurisdictions implement their own stablecoin regulation, and I think on the first part, I know it's been widely discussed of the Mica requirement around how much of the reserves need to be in bank deposits. You could argue is is not the most safe and sound way to manage a stablecoin, and that having government debt. I mean, it definitely isn't right. Like, just
Nick van Eck 17:04
like from a factual perspective, a bank is riskier than you know the federal government, right?
Cuy Sheffield 17:08
Yeah. So, and and I think if if I remember correctly, it was USDT's. Yeah, Paulo has been very explicit that they they believe it's significantly less safe than having reserves in in other assets like treasuries, so I think that piece it makes sense that there's some pushback on. But what do multi jurisdictional stablecoins look like in the future? How do you manage those? Like it's such a weird thing if you have the same product, the same smart contract, the same token brand, but depending where you mint it, it's backed by a different composition of assets, and then how do you communicate that to consumers? Disclosures like that's going to be really really tricky. I know USDC is like operating in that way to some extent now, but I'm not sure what this news means for how USDC operates, and then as as others come in the space, but Simon, what what do you think?
Sy Taylor 18:02
Yeah, just as we have data residency, you can imagine reserve residency, and like that just makes a ton of sense to me. Like, where are my reserves resident? And I guess you could put it onto the issuers to figure out where are your users based, right? Like, because there's no way a regulator is going to be able to answer that. There has to be a disclosure regime. But with on-chain data, you know, you can kind of triangulate this stuff probably better than you could do in the banking system. But my fear is, with anything Europe, you get some GDPR-like paper box process rather than something kind of lightweight. Counter to that, though, the EU Ursula von der Leyen was on stage earlier this week, saying we have to go faster, we need to transform. Christine Lagarde was on stage on Friday last week in in Dublin talking about your Pontes is going live, the digital euro is coming, but we know we need to go faster. I think the establishment has understood that need, and this is an evolving picture. So you know, long may that continue. But of course, we don't have a single sovereign debt market in Europe. We don't have a eurobond like we have with treasuries. I'm sort of wondering: is like, could Kivallis or somebody like that build a synthetic eurobond? Could we start to see a big stablecoin that builds that from one of the many funds that create eurobonds, you know, State Street sells this sort of thing. There are many of those sorts of things out there. Prove the demand for it, and then get a handful of central banks together to start to issue it. Hey, maybe I'm just dreaming here, but I know a lot of regulators do listen to this show. So just planting a seed here, guys. Just planting a seed. Shivani, your thoughts on this as somebody who's having to operate internationally as well.
Shivani Siroya 19:43
No, I think what you just talked about is you know it's not a monolith, right? And so it is 27 different distinct markets that are in Europe, and so I think the fragmentation is real, and that the consumer behavior is actually very different across markets. What we see is, you know, in Germany we do see a heavy cash culture, but then you look at a market like Lithuania, right, and you see very much a digital culture there, right. And so I think it's still going to be paramount on the service providers, obviously, as well as the central banks, but on the service providers to still be able to offer an experience that I think bridges both worlds here, and so if I think about just to kind of our example here, in terms of how I think about market distinctions and how, from a platform perspective, you actually need to be able to still, for us, have real-world utility cash rails, physical cash rails. So these on and off ramps that are at retail centers, remittance centers, mobile money wallets, traditional bank accounts. You essentially have to build a platform that can actually be modular, but to your point, also be able to move global.
Sy Taylor 20:53
Yeah, that global thing is really hard, Mike.
Nick van Eck 20:55
Yeah, I was going to say I think the outcome here is right. You know, yeah. Let's say we fast forward a few years. You have Agora US, you have a regulated entity in the EU, and our customers can toggle between those two different worlds. And like one is a Genius stable that can get flipped to a Mica compliance stable, and then back in an abstracted way. And we are handling a lot of the challenges that that introduces under the hood, but you abstract that away from from the customer.
Cuy Sheffield 21:26
And how are you seeing regulators in emerging markets react to this? Because then you get okay. If there's the Genius Act in U.S. you've got Mica in Europe. If the Bolivian central bank decided that the reserves for stablecoin in Bolivia, need to be treated a different way. At some point, you can't manage a different version in every country. And so, what what's been the reaction to to local regulators right now?
Nick van Eck 21:49
Yeah, I think let's like from first principles, right? A lot of the reason why stablecoins are valuable in emerging markets is because they're safer financial constructs than what locals can get in their own existing banking system, or they enable them to have better access. And from an EM perspective, we're seeing most be okay with genius. I think, especially like in our hemisphere, a lot of them I think will be okay with with genius. You know, in Asia, it's it's up in the air. Most though, are if you're genius, that's like the gold standard. You're an OCC federal bank. It almost doesn't get better than than that. So I think folks have been pretty happy with that in emerging markets.
Sy Taylor 22:29
Shivani, would you agree with that? Have you come across anything along those lines?
Shivani Siroya 22:34
I mean, in our efforts around on-chain lending, we do work directly with our central bank kind of counterpoints here, and I think in that respect they understand why customers would want to get it in stablecoins. But also, I think back to my point on fragmentation and also doing things that I think increase trust as well as can kind of capture the distinct behavior of these markets. We also do work on the local stablecoin aspects of things, and then I think the again on and off ramps aspect of customers still being able to convert back into local fiat, in my respect, will actually be always important.
Sy Taylor 23:15
Yes, it's a crucial thing. I found it so interesting that the IMF was sort of standing on the Brazilian central bank, saying, "You've got a lot of fraud risk here, guys. Like maybe you should slow this down. So I wonder if that pressure will continue and if we'll start to see the pushback soon. But Kai, you were about to jump in.
Cuy Sheffield 23:30
Yeah, I was to say, Shivani, how do you think about on-chain lending? You know, the market for loans in dollars versus loans in local currencies, and it feels like for local currency stablecoins, you know, we've asked this question on the show for a while. Like, what what are the the use cases, and and what's going to drive the adoption of that? And it's growing, but it's still such a small fraction. Do you find that consumers in businesses that you're serving right now, is it they want to borrow in dollars, or you know they actually want to borrow in local currency, and then it's dollars as as collateral. Like how how is that playing out in in your products right now?
Shivani Siroya 24:07
Yeah, I think that's a great point. So I would say it depends on market. So where you've got huge currency volatility, we are seeing consumers actually wanting to be in local stablecoins. It gives them that protection. I also think there are these unique ways that we can actually create underlying yield on these, especially if it's backed by a local stablecoin bond, which again can lower the cost back for the consumer in that lending flow. So in that sense, we've seen real appetite here from you know let's say a Bolivia, a Venezuela, even in a Mexico, from that consumer, that is also going to be a different consumer than someone who is a let's say high crypto adopter. So where we see the consumer actually being let's say a digital worker, someone who's already familiar with it, they're going to be more readily available or willing to adopt you. USDC or USDT, and then actually keep it in a US-backed stablecoin.
Sy Taylor 25:06
Huh? It's different horses for different courses. I do think that local currency stablecoin thing has been one that people have been excited by for a while. But good to hear from on the ground that, like, actually people forget the yielding side of that can be really interesting for consumer use cases. Just going to take a quick pause here while we hear from our sponsors. Stablecoin operations usually mean a wallet from one vendor and on-ramp from another, and then controls stitched together across all of them. Visa's stablecoin platform fixes this fundamentally. You can mint, move, and manage stablecoins across OpenUSD, and you remain your own custodian, all in one single environment. Then, stablecoin link cards let you spend balances anywhere Visa is accepted. That's Visa, the global leader in payments, and of course, sponsor of this show. You can find out more at visa.com forward slash crypto. This episode is brought to you by Bridge, a Stripe company. Businesses need easier global money movement. Bridge is the stablecoin orchestration platform that makes it simple to receive, store, issue, and spend using stablecoins. Companies like X and Shopify and Airtm already use Bridge to lower their costs, simplify global treasury operations, and expand their global reach. Learn how you can grow your business with instant global money movement using stablecoins at bridge.xyc. All right, thank you very much to our sponsors. Next story is about Sofi. They've moved their apparently entire $25 billion card program onto stablecoin settlement with Mastercard, settling in SoFi USD seven days a week. And of course, you've got to remember that SoFi is a nationally chartered bank regulated by the OCC, and it's issued its own stablecoin, but seven-day settlement here is kind of the the main feature that they're talking about. There's also quite something quite interesting on the merchant side, which is merchants can get paid out these seven days a week. They don't need to hold SoFi USD or change anything through SoFi Business banking-they just receive that settlement into their bank account straight away. So, kind of really interesting seeing this come to life. I know the folks there have been working on this for a while. The CEO says they took it from idea to life product in six months. Super fascinating amount of momentum, Kai. I mean, we've been talking about seven-day settlement for a while here, and I think so far, having issued their own stablecoin is is really interesting here. I wonder, you know, sort of how much the idea of being able to have the yield and the seven-day settlement is is really key to to what they've tried to do and to to what the next phase of seven day settlement should look like.
Cuy Sheffield 28:02
Yeah, I I think it's a no brainer that we'll start to see this across every major payment network, and yeah, we've been at this for five plus years now, from the early pilots and experimentation to now starting to scale it. I think it it has found the most product market fit on the issuing side from the fastest moving fintech stablecoin native type of issuers that are offering products to their end customers that are spending against the stablecoin balance and they want to be able to settle it seven days a week and that has impact on credit settlement risk and collateral requirements and and we think it's a a good thing to be able to move money more frequently, reducing what that risk is. I think the big question is like, how do we start to scale the acquiring side of it? I think that's one of the biggest opportunities going forward, and and that's where I think it's very helpful to have every major network participating in this. If you're a merchant, you're getting paid with cards from multiple networks. It's kind of a weird outcome if you're getting settled seven days a week for the Visa volume that that you accept, but not the Mastercard volume. And so now you've got multiple currencies getting paid out different days depending upon what the card is. Like the value that acquirers and PSPs provide is that you have one balance of all the money that you accept across any of the cards that are are paid. So I think it's great to see Mastercard making progress here, and I think there's a huge opportunity for multiple networks and payment systems to move over to more of a standard of seven-day week settlement on the issuing and the acquiring side, but I think it's important to recognize like the customers are more likely to be fintechs on the issuing side. You know, large banks don't have as much incentive to settle seven days a week. You know, right now on the issuing. But on acquiring, I think every merchant and every acquirer should want to receive money faster. It's just finding how to make that as unified of an experience as as possible,
Sy Taylor 30:11
especially when you're dealing cross borders. I mean, Nick, you've been talking about some large corporates that want to do that. Have you come across the acquiring conversation and people trying to get paid faster yet?
Nick van Eck 30:21
Of course, right. And today, right, people. There's many ways that people can get paid faster too. Factoring, right, and and saying, hey, like I'll I'll take a haircut on this to get an upfront payment. So I think what this also is really a story about too is how a lot of the operations are going to be invisible, and people just want the value, which is like instant settlement, and so that's what we're seeing. And I think also one of the the value on the card side, at least, is is that yield, right? And so, like again, like I mentioned, one of the conversations that we got brought in earlier, but a lot there's a lot of things outside of just credit cards. There's many stored value cards where you have things like even schools, right, where they have you know your student ID card that holds a balance, where maybe that gets you know stablecoins get pushed there, you know because you have yield, right, that they can outward on it. So there's a lot of like fun things that we're working on and happening that are also adjacent to this this kind of value prop.
Shivani Siroya 31:20
Nick, I actually I'm curious how you are thinking about the business model side for issuers in this respect, because as you know, more of this happens, right? We will see rates start to compress. How do you think about it? Is it just more use cases, or just really curious for your perspective?
Nick van Eck 31:38
Yeah, we see across a wide variety of use cases now because we're money, so we touch this in a lot of different ways. But I think, at least on the you know the card side, it's mostly either an enhanced yield that we that we come in the picture, or it's credit, right? And those are like the two lenses that we that we sort of interact with it, you know. We're, you know, for for now, yeah.
Cuy Sheffield 32:04
And and then as as you engage with with enterprises, like, do you see the primary business model as like a cut on the assets under management, the yield that you're generating? How do you think about that versus transaction fees, service fees? If you're providing wallets, like, is the long-term business going to be mostly the cut on the yield, or is it going to be mostly service fees that you generate as you enable enterprises? Like, how do you balance those those two?
Nick van Eck 32:31
Well, we'll see, and I think you have to do a little bit of a mix and match, right? Like, you guys know payments very well. Payments is like, oh, you may lose money here to make money here, and so it depends on the customer profile. I will say, for us, we will be very strategic for a lot of these cards providers. We will probably issue or work with a partner to issue cards at some point next year. But also, again, you know, even on the telco side, they want spendable cards to pair with the wallets and the stablecoin. And we were talking about that this morning, and I was like, you know, and there's like a light bulb for me, right? Okay, we could also just be a pass through, you know, with Visa or Mastercard or someone, and have a relationship with them, and say, oh, you know, we work with these partners, you know, and they would love to light up 3 million new users, right? And so that's you know that is a light bulb that actually went off this morning for me.
Sy Taylor 33:20
Everything's cards in the end. It seems you can't get away with it. But how can I spend it?
Nick van Eck 33:25
Right? It's how can I spend it? It's it's the perfect
Sy Taylor 33:28
off ramp. It is, and you're right. The payments is a pin cushion. Like you press down fees here, they pop up over here, and so it's always about intentionally managing that that trade off. And I think different people see friction in different places. You know, you talked about zero off-ramping fees. I think that's been a really big thing for folks for a long time, and I get the need to have that option to cut run on the bank scenarios, as as the sort of the EU was worried about. But at the same time, it's such a friction point for most people who want stuff to land in their bank account, and it seems Sofi is taking that away. You're taking that away, I know Open USD is working on exactly that. So I suspect this will become a default. I'm going to cover a different story now. Slight change of gear, which is the Blockchain.com and the New York Stock Exchange have agreed to explore tokenized New York Stock Exchange listed stocks and ETFs trading 24/7 for blockchain.com's 44 million user accounts, there's also like a really nice, interesting data piece here too. So Ice Data Services will distribute blockchain.com's crypto market data to its clients because, of course, it was blockchain.info before it was blockchain.com for those of you that are really old, and they'll launch their tokenized U.S. stocks in Europe with Ondo Finance. They launched that earlier this year. ICE and kind of the whole New York Stock Exchange in 24/7 is a topic we've come back to a few times on this. It feels like stocks is the next thing after people can earn around their. Their stablecoins, but Blockchain.com's got a lot of users here around the world. Kai, this is a theme we keep coming back to. Your your thoughts on this particular story?
Cuy Sheffield 35:09
Yeah, I mean, it seems like New York Stock Exchange is in the news every every week. You know, for us with with some investment or partnership, it feels like they're really ramping up their activity in the space, cross prediction markets and all the work that they're doing, it it feels like crypto exchanges are just becoming general purpose brokerages very quickly. And every crypto exchange has every major one seems to have a tokenized stock strategy. It's really interesting to see the different providers, the different chains, the the approaches that that they're taking, but I don't know how much of this is you have crypto has been relatively a bear market of over the past year, and the volume and demand to trade traditional crypto tokens is down. And so, do stocks have more excitement and interest with kind of the AI wave. On the other hand, it just it feels like the the infrastructure and the experience that crypto exchanges have created around trading is arguably just a more convenient, easier way to interact with assets that is 24/7 by default. That you have self custodial options and just more flexibility for consumers, and so I think that they offer a a really good opportunity to scale many of these products, particularly outside the United States. Now the question will be like we expect to hear more from the SEC on how tokenized stocks will be treated. There's still a bunch of open questions, but it feels like at this stage, particularly with Robinhood's entry into the space, every company needs to have a strategy for what are they doing with tokenized stocks. Which you know, a year or two years ago, there was very little happening. Now it's every week, new partnerships rolling out.
Sy Taylor 37:00
Javon, curious how you think about this because one of the big stories around tokenized stocks has been internationalization. Is is that the the opportunity here? You think, or could this be domestic as well?
Shivani Siroya 37:12
Oh, I definitely think it can be domestic. I think the thing that comes to mind for me, I mean, I think from a vision perspective, the fact that people shouldn't be limited, right, to be able to buy this based on where they live. In that sense, great vision statement. I think what Peter Smith actually said around this is like economic freedom, amazing. I think this piece though of putting it in practice. I'm going to go right to how I think about how investment instruments work. Do we need to do KYC? And if we do, you're going to end up then hitting a roadblock there, right? How do we actually do that on a user basis? So there are still these things that I think actually fundamentally need to get figured out. So as a as a vision, great. I think the other piece though is as we think about ownership and real value here. Yes, there's a benefit to owning the stock, but from a true shareholder ownership perspective, it doesn't come with those rights either. And so, again, what is the asset that we're actually giving? Again, I think of it as overall framing vision. I think as a standard practice, stocks, pricing of crypto. These are things that are actually standardized and actually make it possible to do this. So I think I'm hopeful that we can actually get there. But I think I'm still curious in practice how it will actually work. And to your point, to getting to that emerging markets consumer or investor, I'm skeptical.
Sy Taylor 38:37
Yeah, the the Robinhood guys took a lot of flak recently for the synthetic nature of their tokenized stocks, and you know they had the AMC CEO angry at them, and then the SEC came out and kind of gave tokenized U.S. stocks a five-year exemption. But those were tokenized stocks, not necessarily wrappers of those tokenized stocks that are really debt instruments. Nick, I know you've got some some history in financial markets. How how are you thinking about this?
Nick van Eck 39:05
Yeah, so some of these indices are actually going 24 five for the first time. Vanek is actually, I think, one of the first providers to offer 24 five indices. But again, it's like, what is the execution going to be in practice? Because sure, you might have 24/7 trading, but let's you know just use ETS as an example. If you can only you know have the APs create and redeem during traditional banking hours, you may have really large deviations or you know relatively large deviations from the NAV, and so you as a buyer, right, might actually be getting a really bad price, you know, by trading on the weekend or trading trading at night because some of these other things behind the scenes, you know, are still relying on on the legacy system or haven't caught up. And there's so many players that like need to be involved here, right? So like you have like the brokerage, you have the exchange, you have the asset management. You have the index provider. You have like the underlying infrastructure that is moving money. You have the trading firms that are helping make the markets, right? And so, like all those people need to get up to date to really have like efficient 24/7 markets, which is going to take a very long time, and you may actually never really be solved because there's definitely going to be periods of thin liquidity, like at night or on the weekends.
Sy Taylor 40:25
Yeah, you've got this sort of two-speed market that emerges, like gradually making the old stuff go faster through evolution. But then also this other market where it's tokenized and it just moves fast, and you're either capable of playing there or you're not, and you kind of get this like alternative universe that you can jump into, but it means standing up things like custody and liquidity management, and dealing with something that is 24/7, and learning a whole new skill of treasury management. What does that look like when it's a token? What does your exposure look like? How do I calculate risk? All of that suddenly starts to change. So I think it's going to be another fascinating story to watch.
Cuy Sheffield 40:58
I was just going to add shout out every time we talk to Eric, our friend Eric from Digital Asset. He's always like, it's it's not about the 24/7 trading. It's it's about the collateral mobility and kind of what what you can do once you have these these assets. And and Shivani, in in the lending context, you've been very focused on unsecured lending. It feels like the the crypto DeFi ecosystem has almost been entirely secured, collateralized based upon Bitcoin and ETH. How do you see as you have all these crypto exchanges, as you have all these tokenized stocks coming to market? Are those going to find their way into lending markets? Like, would you lend against a tokenized Apple stock as collateral, and would it have to be the actual real Apple stock, or how how do you do that against these synthetic versions? How do you think about the risk of that?
Shivani Siroya 41:47
Yeah, I actually I was going to go there. I actually think well, one I would say yes, we would lend against the tokenized asset in this case because again, I think it's not just about what is the asset? That it's can you tie the asset to the individual? And so this actually goes back to our first topic as well about agents. And as we think about it, the underwriting problem of how do you underwrite an agent is actually the same as how do you underwrite a thin filed consumer. So actually, a tokenized asset is actually more than what I have today in terms of collateral, right? What I'm really doing today is actually taking an even bigger risk because Tala, as a lender, we are actually in charge of KYC. So my first piece is how do I underwrite your identity? From there, I'm then coming to okay. Now I'm going to use our intelligence to understand what's the right offer, yes, no for you. But then from there, I think it's again why the agent financial services space is so analogous to the thin-filed consumer space. Is I'm actually using causal inference methods and generalizable models to be able to predict what's the next action that I need to be able to pre-approve for, which I think then folds into how do we think about instant settlement and these things? Because really, you don't want to have so much risk outstanding. So yes, you can approve a consumer for a certain limit, but you're really only authorizing or settling per transaction. But you've got essentially the underwriting already done and pre-approved for an agent, thinfeld consumer, or a prime consumer.
Sy Taylor 43:23
What a fascinating parallel! Thank you, Shivani, for that. Because I hadn't thought of an agent as a thin-filed consumer before, and also just having some collateral here to underwrite against some is is just so different. So seeing it through a lender's perspective, who's dealing with a thin file just changes the picture.
Shivani Siroya 43:43
Exactly. I mean, I think that's why, even as we talk about this particular example around tokenized stocks, in some ways, yes, it's amazing. We actually see a huge data opportunity here, but the real data opportunity, in my opinion, is all of the unstructured financial data that is actually not in the space today, and I think that's the other move that I see, and I'm bullish on. Is as we see more adoption happen, we're actually going to see a lot more standardization in the transaction volume, and so that's going to allow us to bring in that swath of consumers.
Sy Taylor 44:15
Say more about what you mean there. Is this with on-chain data and off-chain data too? Like, if you could start to see the rest of a customer's financial life. Is that where you were headed?
Shivani Siroya 44:23
Exactly. So you know, for the last 10 years, we haven't been doing on-chain lending, right? That's a practice that we started last year, but we have now $10 billion worth of origination that we've already done in fiat. Let's say off-chain. But what we're doing is now actually tokenizing and bringing all of that ledger on chain as well, and so there's this opportunity to now kind of marry the worlds together.
Sy Taylor 44:48
To kind of bring those worlds together, make them more efficient, make your back office more efficient, but also potentially help folks that have stablecoins as well. So, one more story, if you guys will indulge me, about the. UK banks, because you know I'm British, why not? Lloyd's, NatWest, and Barclays and HSBC completed the first interbank transactions using tokenized deposits. They carried out two remortgage transactions between Lloyd's, NatWest, and Barclays, and a group of three banks, including HSBC, ran a customer-to-customer payment simulating an online marketplace purchase. The industry body UK Finance announced on Thursday. Are we? I thought we were past the phase where every bank said they've done the world's first thing, and then two months later, another bank says they've done the world's first thing, and then they've done the world's first thing. Nick, your your thoughts on this? Because I I am actually quite pro tokenized deposits overall. But your thoughts on tokenized deposits?
Nick van Eck 45:47
Well, what I'd love to know is was was this like fungible tokenized deposits? Because one of the big challenges with tokenized deposits is you know the creditworthiness of like a BNY Mellon or a State Street is very different from a small credit union or regional bank, and so I don't. Does it say in the in the press release whether they have like have like the shared tokenized deposit across their balance sheet or
Sy Taylor 46:11
no? So what's happening here is UK finance and the banks themselves are just accepting those deposits, just as you'd accept a traveler's check. Yeah. So this is what was previously the regulated liability network, right? You you accept that deposit as a liability of another bank, and then boom, it's on your balance sheet. So it's kind of simple. It's how clearing banks have always operated, and it's interesting that these banks, for the most part, with the exception of Monzo, are clearing banks, so they get that sort of 24/7 settlement between each other and between the customers, because the RTGS, whilst faster payments is 24/7, the actual settlement underneath it is not 24/7. So for GBP, that that does actually make a ton of sense, but and it's also a model for tokenized deposits that kind of works for the big banks, but you know, once you're dealing internationally, you're sort of recreating correspondent banking again, right? Like, there's probably going to be limits of of how far this can go, right?
Cuy Sheffield 47:10
It seems like that was the the goal with RLN and Project Agora was like this idea of wholesale CBDC to enable these settlement mechanisms between tokenized deposits, but it's not here today. The question is: Is there a path to be able to do it? But to your point, it seems significant that there's more interest in pilots of interbank tokenized deposits when pretty much all of the activity that's happened over the past few years, and JPM kind of being the leader, has been intra-bank, and so we're still seeing most of the demand and interest being intra bank as a starting point for banks to modernize. I also didn't see in this this announcement what chain this was moving on. Did did say it mentioned like blockchain? Then you're like, okay, well, there hasn't really been a default chain for tokenized deposits yet, and the chain that tokenized deposits run on might look at a different way.
Sy Taylor 48:03
This is a custom one, I believe. So this must have been secret. No
Nick van Eck 48:07
one, no chain was able to get their hands on this
Sy Taylor 48:10
one. No, so this is a custom one that I think I forget the name of the company. It's something like Quantum or Quantinium or something like that. They won the RLLN contract in the UK. It's EVM based. They describe themselves as somewhere between an EL two and l3, but I don't know what that means because this is obviously not settling back to the ETHL one. But that's who the vendor is behind it. So it's EVM based. It could, in theory, be compatible with other things. What volume it can handle and what it can do from here on in, I don't know. But this does come on the back of Citi and DBS and others using the Swift ledger as a way of orchestrating those tokenized deposit movements, and and sort of I wonder if we'll see this world of tokenized deposits between the banks become the way those giant clearing banks get to 24/7 and get to atomic settlement and even DVP, not just PVP, which I think for a big part of the market is going to be important, and then stablecoins are for everybody else. I mean, Nick, would you welcome that world?
Nick van Eck 49:09
Yeah, I mean, there's going to be tremendous demand for this, right? Because at the end of the day, they're fundamentally different products, right? And so tokenized deposits, right, are inherently riskier, right? They're also not backed one to one, right? And so you can lend out capital against those deposits. So this is going to be a a huge market. I think it'll be very, you know, complementary or synergistic with with stablecoins. But we are probably a number of years away from this existing at scale because it also is a lot more challenging. Right, like we are collateralized one to one. You know, it's U.S. Treasuries and repo having interoperability between different banks, and then being able to accept this. And you know, I'm not exactly sure how each sort of network is going to do this, but have fundability between these deposits is going to be a challenge that they'll need to overcome. I think they'll absolutely overcome it, but I think we're a number of years away from it.
Sy Taylor 50:03
And I wonder if where they can't accept somebody else's tokenized deposit, they could accept a USD or open USD in a stablecoin, and that might become sort of an interesting bridging asset. Thank you for going down this rabbit hole with me, folks. A bunch of stories we didn't have time to cover this week. Binance invested $100 million in circle for a five-year push for USDC in emerging markets. Rain launched real-time funding. We talked a lot about that this week. The Bank of Korea starts 24-hour offshore one settlement pilot with four banks. The Eurosystems Pontes went live, as we talked about. The US is apparently weighing an initiative to promote dollar-backed stablecoins abroad. I think Nick, we sort of touched on that earlier. And crypto infrastructure firm Moonpay has agreed to acquire North Capital in an all-stock deal that CoinDesk said was worth more than 60 million. M and A season is well and truly here. Look, thank you everybody for watching and listening. Thank you to the guests for being on the show, Shivani. If people want to learn more about you and Tala. Where do they go to do that?
Shivani Siroya 51:03
They can just go to Tala.co, and then otherwise find me on LinkedIn or or X.
Sy Taylor 51:08
Nick, how about you and Agora?
Nick van Eck 51:10
Agora. Finance and with AUSD on X.
Sy Taylor 51:14
Excellent, Kai.
Cuy Sheffield 51:15
On X, Kai Sheffield, thevisa.com/crypto.
Sy Taylor 51:18
You'll find me at Sy Taylor on all the socials, screaming to the void at brainfood.xyz, and of course at tempo.xyz as well. And you'll find a lot more of this show if you subscribe to it. Tell all your friends too. Hit like buttons if you're watching on YouTube. Thank you very much, and we'll catch you next time.