On Ep. 16 of Tokenized, Simon Taylor, Head of Content & Strategy @ Sardine, and Cuy Sheffield, Head of Crypto @ Visa, are joined by Sinclair Toffa, Founder & CEO @ Mural Pay to discuss what $TRUMP and memecoins means for the future of finance.
On Ep. 16 of Tokenized, Simon Taylor, Head of Content & Strategy @ Sardine, and Cuy Sheffield, Head of Crypto @ Visa, are joined by Sinclair Toffa, Founder & CEO @ Mural Pay to discuss what $TRUMP and memecoins means for the future of finance.
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Unknown Speaker 00:00
Simon,
Sy Taylor 00:10
welcome to tokenized the show focused on stable coins and the institutional adoption of real world assets. My name is Simon Taylor. I am your host for the tokenized podcast, author at FinTech brain food and head of strategy over at sardine and joining me, wow. Tai Sheffield, head of crypto at visa. How was your weekend?
Cuy Sheffield 00:32
What a wild start to the year. I'm still trying to catch my breath and like respond to messages that I've gotten from friends and family and relatives all over the world just asking me, like, what in the heck is going on? But plenty of things to discuss here. Let's let's jump into it.
Sy Taylor 00:51
Yeah, no. And of course, we have a great guest with us today. We have Sinclair toffo, who is the founder and CEO of mural pay. How you doing? Sinclair? I am doing
Sinclair Toffa 01:01
great, Simon, thanks again for having me and Tai. Really nice to see you. It's been, it's been a bit dude,
Sy Taylor 01:06
really grateful to have you here. Want to learn more about mural pay, but we got to get some news, so be sure to remind everybody as we get through the show what you guys do. But yeah, the story that was everywhere was sitting president of the United States, Donald Trump launched a meme coin. The Trump token was up more than 11,000% in 24 hours. Reached a peak valuation of more than $60 billion in fully diluted value. It traded more volume in 24 hours than most fortune 500 stocks usually see in a month. Then, not to be outdone, his wife, Melania, also launched a meme coin, which saw equally crazy levels of trading. And whilst this all seems ludicrous, there's a lot of stuff going on here. So Kai, help me out here when you've been trying to explain this to people and make sense of it, especially to somebody who's like a serious, grown up professional. What the heck just happened?
Cuy Sheffield 02:08
My starting point has been, regardless what you think about Trump coin or presidents launching meme coins or meme coins in general, as a blockchain payments nerd, I am fascinated to see what happens when a lot of people try and use a blockchain at the same time. And that's really what this past weekend was that it was a mass onboarding event of people directly coming on chain, many people for the first time and trying to use the blockchain to transfer value, really, with the goal of interacting with this Trump coin, and so seeing how a blockchain responds to that, I think, is one of the most interesting elements to it. A few of the stats that I found really interesting is, if you bring it back to stable coins, you know, how is this connected to stable coins? Isn't it a meme coin? Well, the onboarding flow into buying Trump coin, went through an app called moonshot. Moonshot is a effectively a self custodial wallet exchange that enables consumers to trade many different meme coins and other assets on Solana. If you have Fiat in your bank account and you wanted to buy Trump coin, the first thing that you did is you'd likely go through an on ramp, and the on ramp was provided by moonpay. You'd go through KYC with moonpay, you could then fund your account on moonshot with Fiat for your bank account that then got automatically converted to USDC on Solana, and so your balance in moonshot was USDC on Solana, and then you could use that balance to then be able to trade Trump coin. So there were new consumers who had never interacted with moonshot, never interacted with a self custodial wallet, had probably never interacted with a stable coin, that were onboarding into this product, loading a balance at a stable coin. And what we saw was that if you just looked at the on chain data, the supply of USDC on Solana jumped from about 4.7 billion to $8 billion very, very quickly. And so that's one of the largest increases in stable coin supply over a short period of time. And that wasn't just institutional. A lot of that were retail consumers coming in. And I think the other stats that shout out to Jason yanowitz from blockworks, I think he was looking at some of the data and found that 50% of the holders had never bought any crypto and Solana before they were new addresses. 47% of them created their wallets the same day. 83% of the wallets had less than $1,000 in assets. And so just seeing the broad ecosystem in the infrastructure that was around it, and how that responded. And then I think that the general consensus was Solana withstood a major stress test and probably got a B plus it survived. And maybe other blockchains, who knows what would have happened with that amount of traffic. It wasn't perfect. There were issues. Issues. There were things that went wrong, but the fact that it was still generally up and running for most of the time, I think a lot of people are happy with so a lot of really interesting takeaways on the infrastructure side, under the hood. Yeah,
Sy Taylor 05:13
I contrast that with the NFT sort of craze in 2021 where people experienced an hour for a transaction, $100 transaction fees. This is meaningfully different. Sinclair, what are you seeing with your clients, with consumers, with your family, with everybody? It's
Sinclair Toffa 05:30
interesting. Simon and Kai, I have an interesting relationship with main points. I think, in one way, main points perhaps help bootstrapped awareness around this new technology. I think, Tai to your point, in terms of stress testing a system and stress testing blockchains, I think that's a really interesting use. We primarily work with a lot of businesses, financial institutions, banks and so on the B to B side, we try to stay as far away as possible from main points that being said, Tai to your point, bootstrapping USDC liquidity on Solana, through greater awareness, I think is is interesting. And in a lot of ways, I think meme coins are an evolution of ads, and ads are effectively the stock market of attention. And one of the big starters of the stock market of attention was Google, back in the day with the ad marketplaces that Google launched, and really, you know, it was primarily controlled by Google, then app Nexus, and then a couple of other large players. But here, what we're seeing is basically, kind of a distribution of this new stock market of attention that's now being almost decentralized even more right now, people can start these meme coins, and it's an evolution of ads. I think it'll be really interesting to see where this goes in the future. I do think there's a time and place to talk about it. Of course, in a lot of the B to B conversations that I'm having, it's a lot more focused on the underlying technology, on specifically blockchain technology. But I do think thinking of this as the evolution of the stock market, of attention. There's something there, and there's clearly something happening here that's fascinating,
Sy Taylor 07:07
the Google comparison, especially, of how do you price and monetize attention? We are in an attention economy. Attention is all you need. Is the name of the white paper that gave birth to the transformer, which is AI like literally, our entire society is rebuilt around attention, and so how do you price and monetize it? The business model of the 2010s was advertising. Are we seeing the burgeoning of a stock market for attention? And that's not as wild as it sounds. I spend a lot of time, as you guys do, having to explain some of this stuff to CEOs and car you were talking before the show about how the the Overton Window on Bitcoin shifted. It was like, Blockchain, not Bitcoin. And then it was like, well, Bitcoin, but not crypto. And then it was like, well, crypto, but not as an ETF. Okay, maybe an ETF for some things. And then maybe, actually, this defy stuff could be useful, but never in permissionless blockchains, okay, maybe permissionless blockchains and stable coins. So you're seeing this shifting. And wherever the frontier is in crypto is usually kind of gross. But from that grossness, if you focus on the innovation, if you see what's actually going on there, there's powerful, powerful insights. I also think there's something else interesting going on here in the consumer mindset. I was speaking to a bank CEO this week in Utah, and I replayed to him, Frank Rotman, from QED investors, has this concept he calls financial nihilism. We're watching a generation of people that maybe doesn't trust traditional finance, you know, and you saw it with the Robin Hood meme stock craze. To a certain extent, they see meme coins as valid as stocks. They see chaos as a strategy. Skepticism can be profit, and that's a real symptom of us not asking harder questions about what consumers need and what the economy's really, really doing. So Kai Sinclair, any more thoughts on this one that you found important to bring up? I
Cuy Sheffield 09:14
think, from a product perspective, moonshot has really picked up on this. And moonshot the app which many people, even there were people with crypto who weren't familiar, hadn't really heard of moonshot before, being the kind of default when someone went to the Trump meme site or clicked through it took them to moonshot. That was a major, major moment for them. And I think they were number one in the finance category in the app store. I think they were number five overall at one point. So they acquired, I think they said, hundreds of 1000s of users. There was
Sy Taylor 09:45
a tweet from Jason yanowitz That was like eight out of the 10 most downloaded apps on the App Store were either crypto apps, and moonshot was number one, or they sold crypto. So it's like Robin Hood. The other thing I saw was. Sorry, you got me excited now, was the race to list Trump coin from really big publicly traded companies, from Coinbase and others, was quite unlike anything I've seen before, and I think that signals a shift in potential regulatory momentum around the broader technology and the appetite for that. So that's, I think, a powerful, powerful insight. Sorry, you were kind of going there.
Cuy Sheffield 10:25
Yeah, I wouldn't ask Sinclair your ticket. I think, from a product perspective, something that moonshot did really, really well was abstracting away gas fees. They were one of the first mainstream onboarding experiences that I've seen, where people were actually trading. They were buying and selling Trump coin on Solana, they didn't have to go and buy soul tokens and buy $1 of soul so they could pay their one cent gas fees, which we've been talking about for a while with stable coins. Like, it's insane that you've got to go buy a crypto asset to then send someone dollars. So how do you think about like, is this a major moment towards proving the value of gas abstraction, and then within your business today, at mural like, how do you see enabling on chain stablecoin transactions in this retail, friendly way that doesn't require a gas component,
Sinclair Toffa 11:12
the way moonshop Did it, I think is exactly the way to do it, the way that we've kind of approached it has always been, As a matter of fact, we don't even necessarily show your blockchain address, so a lot of the companies that we work with might not even be aware that we're using Blockchain technology underneath the hood. And so I do think building those abstraction layers are important. I think it's important to meet people where they're already at so, you know, allowing people to use their existing bank accounts and more, I think you know to your point, Simon and Kai on one, one interesting trend that I've noticed here is just in terms of general awareness. We've been talking with these different executives at different financials, institutions and banks, and what's interesting is a lot of them are actually learning about this technology through their kids. You know, their kids are bringing up different mean coins to them, and that's, that's their introduction, you know, that's their introduction. And so the awareness is definitely happening. And I think when you combine awareness with the abstraction of the technology, where it just feels so seamless, you know, just like on these newer platforms, right? That's really where the magic starts happening. And so I'm personally very excited to see, how do we abstract even further? I think eventually we'll get to a point where people will forget about the word crypto. I kind of have a hot take on this that I believe we should fully eliminate the word crypto. I think crypto is great for technical discussions and in cryptography, for instance, but my personal hot take here is we should fully eliminate the word crypto, and I think that is what's going to happen. I think 1015, years out from now, people will have genuinely forgotten about the word crypto, and it'll be this kind of relic of the past. The underlying technology will be used pervasively, but I think people will think of it as more of like a relic of the past, and we're kind of in the thick of that transition moment right
Sy Taylor 13:09
now. Yeah, it's fascinating that a lot of the wallets that are gaining traction in the global south advertise more the ability to hold dollars and make yield on it. New bank being a possible exception, but they're not always selling the fact that it's a stable coin or it's this type of thing. They're giving you the value proposition of you can have access to dollars and earn yield on this stable store of value, and you can move it internationally, 24/7, for ultra low fees. That is extremely valuable to consumers and business in global south markets. Kai,
Sinclair Toffa 13:43
to that point like, that's exactly what we've seen. You know, working in Latin America, people love real time. You know, it's all about real time. Everyone's running their business on WhatsApp. Let's move to real time payments, and let's really focus on what are the value adds and the awareness component through main components, I think is great, but how can we further double down on the value adds? And just like what you mentioned, Tai, let's talk about, you know, how blockchains are handling all the transaction throughput, and, you know, handling failure modes for transactions.
Cuy Sheffield 14:19
Simon, going back to your point on, like, financial nihilism, if I'm pronouncing that correctly, I think it is. It's a really interesting question for both, I think, society in general, as well as like, what does the future of financial services look like if we now live in a world where there are teenagers who live all over could be outside the United States, could be in emerging markets? Emerging markets who are making and losing 1000s, 10s of 1000s, sometimes hundreds of 1000s of dollars from their basement through these very speculative financial, somewhat casino like products. And I think there's some interesting perspective. Perspectives. Murad has talked about meme coins for a while. If you've you follow him on Twitter, and it's his view is, like, it's the only asset class that Gen Z has an advantage in, because Gen Z is just more online, and they're better at the Internet, and so they're like, doubling down on what they're good at in the attention economy, and they're upset about how hard it is to buy a home. And so I think that there, there's that perspective I'm really interested to see. Is there staying power to that trend, or is it because many of these things are the probability of making money is low? What happens is people play the game and they lose, and then they unfortunately, they don't come back, they they never play again. And I think that that's that's a an issue, if that's the experience, and it's hurting people's financial lives. On the other hand, if people play the game, they like the game, they win some in the game. How do they then transmit that? Do they continue holding these tokens? Is that part of their net worth and their assets, where a teenager has more assets than their parents, but they're in this crazy, speculative, volatile meme coin, do they convert it over to stable coins and start spending on stable coins? And so that was one of the other questions I had. Is with this influx of consumers into wallets, into moonshot, into phantom they're coming for the casino in some ways. Are they gonna stay for the payments and start using stable coins? Are they only just there for the casino, and then they'll go back to their traditional products for payment. So I think that there are these really interesting questions on what financial services look like for a generation that is growing up having these types of experiences at early ages. And what does it do psychologically to make and lose money at that scale and that speed at a young age?
Sy Taylor 16:37
You could argue it both ways. Couldn't you could say that we saw this with 2021 and that bull market, and the meme stock craze, which kind of went away, and the NFT craze, which hasn't really come back in anywhere near the same consumer level of adoption. And so is this just on the fact that markets are up, so we're in a bit of a speculative bubble. You could make that argument. But on the other side, there are lots of jobs today where people earn millions of dollars that their parents thought was stupid, like being a full time eSports gamer, like trading Nike shoes and being a collector. These are businesses that are worth 10s of millions to and seen as entirely legitimate, but were odious and disgusting to many of their parents, and you should get a real job. And I think if you're listening to this in your 50s and 60s, you probably have references from your own era where that was true. So I'm always mindful of not just discovering things through your children, but the hardest thing to do as you age and you become more senior in your career, is maintain the mental flexibility, that your experience sometimes can be wrong. 80% of the time it's correct, but 20% of the time, you are going to have this crazy moment where your experience is entirely wrong because the world has changed around you. But speaking of sort of thoughtful people on this topic, we did see an interview with the Bank of America CEO over at Davos, and he says the financial industry will jump into crypto payments if regulators allow it. And talked about, let me give you his exact words, because this is, this is quite crucial, if the rules come in and make it a real thing, that you can actually do business with, you'll find the banking system will come in hard on the transactional side of it. And he went on, if you go down Main Street and you buy lunch, you can pay with Visa, MasterCard, debit card, Apple, pay. This would just be another form of payment. We have hundreds of patents in blockchain already. We know how to enter the field. Sorry, that was just me poking fun at patents being some sort of competitive advantage. But Sinclair, uh, how do you feel about this? Are we heading into a world where people are starting to feel more confident about it, or is this just somebody being asked a question on the spot in Davos? Yeah. You
Sinclair Toffa 18:56
know my my take here is, I think people are genuinely warming up with what Ryan shared here is, clearly, they've been doing a lot of work internally, and now it's kind of that moment where, yeah, who knows how much has been done, but now is where people are feeling more comfortable with this technology. And I think now it's really, how do we find the right use cases to make sure that we can build long term value. I think, you know, sometimes whatever comes up fast tends to crash fast. I think we've seen that kind of time and time again. And so I think, yeah, what will be really important here is like, how do we, how do we up level all the regulatory requirements and kind of streamline that process for all the great businesses that are building in a space, I think a lot of the current regulatory requirements and processes have an opportunity to really up level when it comes to how do we understand the identity behind these transactions or the nature of these payments. And I do agree, like you see this, and if you go to Japan, for instance. Because you have 20 to 30 payment options. And in Japan, they've even created all these local networks that bypass Visa and MasterCard, for instance. And so I think, take what you have in Japan and will effectively have in the US and around the world, and you'll have a lot of different networks, and it will just work with your card, and it'll work with your bank accounts.
Sy Taylor 20:22
Kai, my hypothesis, hear me out on this is two things. Stable coins are becoming the payments rail between rails. So if I want to get from visa to fed now to JCB, to China union, pay to pix, to something else, stable coin becomes this wonderful rail between rails that's consistent US dollar based, that's sort of being understood as the stable coin sandwich. But I think it's slightly different to that. It's not necessarily Fiat in and then crypto and then Fiat out. It's the rail between rails. But the second thing, the big macro trend, is authentication on payments is decoupling from the underlying rail. It used to be that you had to authenticate with a Visa card in order to pay via the visa network, but now, with Flex credential and other things that are emerging and other identity standards, you can use your card to pay for something. And it could go via open banking. It could go via visas rails. It could go even go via competitors rails, or it could go via stable coins. And I know you guys have launched some cards on that. How do you how's my aim? Are you in agreement with that? Have I? Am I too early, because I've been very wrong in the past?
Cuy Sheffield 21:41
I think it's a helpful framework. I like to think about, there's stable coins as a rail themselves. Of someone can use a stable coin to send value over a blockchain to another consumer who receives it as a stable coin. And that is just, it's the blockchain being a payment rail combined with the stable coin moving value over. And then I like the idea of like stable coins can be a rail between rails, and that abstracts away. You don't even have to know that stable coin exists. But can connect many different payment systems today together. I think that there are different use cases in different markets where that skew one versus the other. I think in mature developed markets, and particularly in cross border payments, I think we're seeing a lot of the rail between the rail of, how do you move from Fiat into a stable coin, into another market, then back into Fiat. I think in emerging markets for domestic payments and just storing value in dollars and paying directly like stable coins can become a rail themselves that has some mainstream, direct adoption. I want to go back to like we talked about this on the show a few times, like a year ago. If you surveyed a average mid to large size bank in the United States, and you asked them, Okay, what are you doing in crypto or digital assets or blockchain or stable coin, the likely answer would either be not a whole lot. We're probably participating in some working groups. You know, there have been these active bis projects and digital dollar project. We're like, staying close to cbdc and kind of, what, what are, what's happening there? And then perhaps there's a project focused on some type of blockchain use case inside the bank that would likely use a permission blockchain that would be more intra bank settlement, and it's to no fault of a bank. It's not like banks were wrong. I think that that was the perfectly rational position to be in, given that there just weren't a lot of opportunities. There weren't a lot of things that they could do. And so what's the point of hiring a big team and investing a lot of time and energy of all the things that you have to do when it's just not even clear, is this industry gonna be here in a year or two years? Like, are you gonna be able to participate in it at all? Or is this always gonna be parallel, kind of outside the regulated financial system? I think now what we're seeing is we've gone through this. Now it's like, this is important. We're gonna spend time on it. We wanna understand it, and we wanna move to, I think, what a lot of people refer to as, like, wait and see, like, they're not ready to pull the trigger yet, but they're ramping back up, understanding what's happening, starting to put together a strategy, and we think it's, this is the year every bank needs a stable COIN strategy, and they're starting to put those strategies together. And then I think the biggest question is, what's the inflection point when they pull the trigger? What does it take to go from wait and see, and we're like, we've got a strategy in our back pocket to like, let's start executing against that strategy. Is it stable coin legislation now that could be 12 to 18 months. We don't know. Maybe, maybe it never happens. Is it guidance from the OCC from FDIC, from federal regulators? Is it consumer demand? Is it business corporate demand? Like, what are going to be those triggers? And it might be different for every bank, but. But how much do they wait until you have a bill that pass, versus if you kind of see the momentum that things are going, see the tide starting to turn, do you build into that? I think that will be really interesting to observe different banks will take different approaches on it. And Sinclair like the corporate side, it feels like the longer banks take, the more opportunity there are for fintechs like yourselves building stablecoin payment products. You know that you're starting to capture cross border flows that a corporate might have gone through a bank before, and now they're saying my bank doesn't let me send stablecoins cross border. So now I'm going to go to Sinclair and mural, I'm gonna start sending stablecoins. So I'm curious how you view that from the clients that you're talking to. Yeah,
Sinclair Toffa 25:39
it's interesting. This, concept of triggers, right? What triggers a bank to fully double down on this? I think the number one trigger is for banks seeing other pure banks getting ahead of them, and so from a lot of the banks We've been speaking with, you notice, okay, new bank has rolled out USDC support, right? Association now is also doing stuff with some various blockchain integrations. And so you see all of these other institutions that are already making progress. And so they're thinking internally, okay, we need a catch up, and we need to make sure that we can connect to this newer network. And to your point, Kylie, right, we're seeing a lot of you know, wait and see. And also, all right, if we were to build this out, what does that look like versus if we partner up with the various fintechs, how can we roll it out so that we can start testing and getting feedback as quickly as possible? So I think right now, a lot of banks are looking to roll out different proof of concepts effectively with different business and consumer use cases, and we're going to see a lot of that this year. And so we'll see a lot of banks rolling out real time payments for specific corridors, for specific use cases, and then using that to basically roll it out incrementally. It's
Sy Taylor 26:53
fascinating time to say the least. Sinclair, the adoption will come, and your timing is is just unbelievable with this space, with with everything coming along, the triggers are just going to be it's gonna be interesting to watch. You know, will we get fit 21 there's a new legislator that passed the House before it didn't pass the Senate, but there's a new Senate Banking Committee for every bank. It's different, but that's an opportunity for others. I was speaking to the CPO of one very large cross border payments company who, in our conversation, for the first time only just got stable coins, and this was weeks ago. So your opportunity in that space, I think, is truly massive, to go capture market share. So it's going to be an exciting time, to say the least. And you mentioned new bank. Well, we'll talk about those after we thank our sponsors, we'll be right back. This episode, if it's not obvious, is brought to you by our friends at visa, a global leader in payments. Visa's tokenized assets platform vtap uses smart contracts and cryptography to help banks bring fiat currencies on chain. V tap allows financial institutions to issue Fiat back tokens, improving financial efficiency and enabling programmable finance. You can check out the links in this episode's description to express your interest in vtap. This podcast is also supported by our friends at Digital Asset the creators of the Canton network. Canton is unlocking the utility and liquidity of institutional grade real world assets with over $3.6 trillion of assets issued or processed on the network today. Think of it like defi transactions, but with the privacy and control, institutions need digital asset solutions make it easy to tokenize, use or invest in digital assets on the network. Create connected applications or simply get started with a validator node. Visit Canton, dot network, forward, slash, connect to get started. Thank you so much to our advertisers. Couple of stories, circle has had a busy few weeks. They have expanded their USDC rewards program with Nubank to all customers. So Nubank has a service called Nubank crypto, and they'll all have access to a 4% return on USDC. And over the past 12 months, newbank says the amount of USDC held by newbank Customers increased tenfold, and more than 50% of the users chose USDC as their first digital asset. So real, real demand for the digital dollar there, and of course, the other story is circle, acquiring the tokenization business hash note, as well as partnering with our good friends over at the Canton network to bring USDC. Key to that network. So maybe let's start with new bank, I guess Sinclair, you're very close to what's happening in Latin America. What do you think that those users are seeing, and what do you think, arguably, one of the world's largest Neo banks is seeing in offering this product? So
Sinclair Toffa 30:16
you know, what's so interesting, Simon, is we're talking with these very traditional importers, exporters, and these very traditional businesses, where they run most of their operations over WhatsApp, and a lot of them are just getting into it over the past three to six months, they're manually kind of stitching together different solutions to try to see how they can take advantage of this. And really the biggest value prop for them is is just the speed. They don't actually fully understand how the underlying technology works. They just know that it's quicker. And so I think what new bank is aware of and very mindful of is that a lot of consumers are going to keep going down the USDC route and stable coin route, but I think ultimately a lot of businesses are going to move over to that even quicker. And really that's where we're going to see tremendous volume shift. And so that's what we're seeing, is just people organically gravitating towards it, without necessarily fully understanding how it works. But they love how quick it is. If
Cuy Sheffield 31:21
I remember, like last cycle, we used to talk about how there was this, this race of crypto companies, crypto exchanges, they wanted to become like full featured Neo banks, and they need to figure out how to add Fiat integrations, how to issue cards, how to do bill pay and get all kind of Fiat services that consumers need to make it their primary account. And then you had banks and Neo banks that wanted to compete with crypto exchanges and add crypto buying and selling and stable coins. And it was like, who was going to integrate the other side first to be able to be that modern financial services offering? And we've seen crypto exchanges like Coinbase offer high yield stable coin accounts for some time now, I think on Coinbase, the core exchange, you can hold money in USDC and earn, I think, 4% right now, based upon yield that Coinbase gets on the the underlying treasuries and reserve assets, they then pass back to consumers. Now it is not FDIC insured, but people are holding USDC on Coinbase and treating that as like a pseudo high yield dollar savings account. Coinbase just extended that to Coinbase wallet, and so there are consumers all over the world that are holding USDC on Coinbase wallet and earning kind of a high yield account, I think, for new bank as one of the most innovative banks, if not the most innovative bank in the world, to be the first to roll this out at scale is a really big deal. And I think the question is, Will other banks look to follow it? And what does it mean? Like there's a value proposition of getting access to dollars outside the United States. How much does it add to say dollars with yield outside the United States. I don't know. I'm curious. Your perspective is, like, if you tell someone in one of these markets here, just save money in dollars, if their local currency is very volatile, are they just happy to, like, get dollars? And so saying you get a little bit yield on top of it doesn't make a difference. Or is it actually that is a killer value proposition and product, and they're earning more yield than many consumers do out of their US bank accounts, which is also kind of ironic and a little strange, and it's a different product. But yeah, Simon, how do you see this playing out long term? Is this going to be the product of 2025 every Neo bank outside the US has a stable coin, high yield savings account on the consumer and the business side, outside of the
Sy Taylor 33:41
US, entirely possible. One of the core bits of feedback I got when I wrote this up was like, I can get 4% yields somewhere else or with money market funds. And I was like, yes, because you're a domestic US customer. And somebody else said to me, well, Brazil's central bank and your yields are generally higher on the Brazilian rail. And a lot of Brazilians reached out to me and went, Yeah, you take that volatility, like high yield on something that could be falling, and even more so in countries like Argentina the Mexican Pesos done okay, but volatility is still an issue for a lot of these markets. So 4% yield on something that's maintaining its value on a relative basis is still much more than 10% on something that's going backwards. So you've got to understand the denominator, and that's a really crucial point. And I think what's so important about new bank is they're signaling value to other bank CEOs. Every bank CEO wakes up and reads the headlines, and in the headlines quite often is something about new bank and something about they're doing in crypto. So when it comes to the triggers, there's also, well, one of my biggest competitors is doing this thing. So now I should really think about, I have to do it too. I like to joke that banks can't be told what the future is. They have to see a competitor do it first. First. And that's not because they're silly or incapable, far, far from it. It's that. It's like, well, there's a precedent now, and that's made it a little bit more okay. I want to get you guys thoughts on the other story really first on circle acquiring hash note, who are the issuer of the largest tokenized money market fund, us, YC, and then secondly, of course, their partnership to bring us DC to the institutional focused Canton network, Kai, maybe, maybe I'll start with you on this, if you wouldn't mind, because you're seeing a lot, I suppose, in the banking space. Do you think this is going to be an important piece for them? It's
Cuy Sheffield 35:42
interesting one that the first thing I thought of is just this relationship in question of how tokenized money market funds interact with stable coins. And we've talked about this before, that there are stable coins that are directly yield bearing to the end customer. And so we've seen USDM, which I think is out of Bermuda, you've got Paxos with usdl, I think circle and tether have explicitly not really looked to go in that direction. I think that from a regulatory perspective, I think there are questions, particularly in the United States, of if you pass yield directly back to any end holder. Does that make it? Does that make it a security now, I think we have to kind of unpack it with what we just talked about with new bank. I think where it's a little different, there is that you've got an entity in new bank or Coinbase who is receiving yield, who is then choosing to then share that yield back to consumers, which is a minor nuance, but like my understanding is that's important that it's not the stable coin itself is just yield bearing by default. It's the stable coin itself generates interest income. They use that interest income to pay distribution partners. The distribution partners then take that and reward consumers for holding it. And so that's kind of been the mechanism for doing yield on stable coins. When it is intermediated by a new bank or a coin base or somebody like that, you have this other model of, okay, well, what if the asset itself just was yield bearing itself? You didn't have to intermediate with anybody. It was just, if you held the stable coin, you get interest. I think those products, there's just a question of, how will that be regulated? It's very clear that there's now a tokenized money market ecosystem of regulated securities in the US, like Biddle, like Franklin, Templeton and others. And so I could kind of see a world where you could have stable coins that are used as a medium of exchange, as a form of cash. And then you could have tokenized money market funds that are kind of the savings account, particularly for corporates. And how those move together, if you could convert between them, 24/7 like that could be pretty interesting. And so I was fascinated that circle had done the work with Bittle, and they have had this facility where you could move between USCC and blackrocks product, 24/7, and so now it seems like, in a way, they're kind of doubling down on owning or having a product in their portfolio that is a tokenized money market fund. And then how they have that interact with USCC, and how they kind of bring that to market with USCC, will be really interesting. But Sinclair would love your your take out. Yeah,
Sinclair Toffa 38:22
I think this, this move from circle, is an interesting one. If I were in circle shoes, it sounds like one of the big considerations here is, how do you further diversify your revenue streams as you continue growing. And so I think this is a very clear move to further diversifying their revenue streams. And the other interesting thing here is the concept of, how do you keep further distributing rewards and passing on rewards to the entire network? And so I think that's something that we're seeing here with this type of acquisition, is how are rewards passed on to the network? And I think we're going to keep seeing more of that. You
Sy Taylor 38:57
know, it's interesting to me that ramp.com just announced their treasury product. So ramp, the expenses card for fast growing businesses. Mercury offers a treasury product. Brex offers a treasury product. It's now a default feature that if I'm a growing business in the United States anyway, and I'm a customer of one of those banks where Neo banks, sorry, then I can have access to higher yield checking, or I can have even higher yield money market funds. And that's sort of my dashboard that's not available to businesses around the rest of the world. But with USDC and now us YC, potentially, is my savings account and my money market fund for treasury management are 24/7 and instantly swappable from the same supplier circle. So I think that's fascinating, but if that increases demand, then you have a supply problem. And so where do you go get money market funds from? Well, hash note could could grow, and Ondo could grow, and others could grow. But what I think's really. Really, a lot of people are missing about the Canton partnership. Here is, of course, Canton is already working with, I think, more than 3.6 trillion of assets across their network among institutions. It's massive, and it's the story not told in crypto. And then they're starting to list the Canton token on some exchanges. This is also the story not told. So that could potentially become an off ramp for a lot of liquidity into tokenized markets. So this is going to be fascinating to watch player. So clearly, I'm interested in your views on that business side. Could we see global Neo banks in the B to B space start to emerge, just as we've seen them, sort of in the consumer space, but built on sort of the stable coin Braille. One
Sinclair Toffa 40:44
of the trends that we're seeing is a lot of Neo banks thinking through how to de risk their business from being tethered to just one underlying banking partner that they might be working with. And so a lot of the conversations we've had with some Neo banks is, hey, we are currently built on this banking partner, and we're now looking to de risk that and use digital blockchain infrastructure to provide different types of accounts so that we can easily move funds in between our underlying infrastructure. And so I think long term, what we'll see is just more businesses thinking through, how can we de risk our underlying infrastructure by using this newer, more programmatic systems and networks to move money programmatically. I
Cuy Sheffield 41:31
think it's also just interesting to see circle continue to integrate with more blockchains. And I think as as far as I understand, they have the most blockchains of the major stable coins. I think they're 16 or 17 now, where USDC is is issued on and and I think it kind of comes back to like one of the things that makes stable coins interesting is that they're a very developer friendly platform, and they kind of meet developers where they are. And different blockchains have different properties and different programming languages and are optimized for different use cases. And so to be able to have a single product like USDC that is available everywhere from Ethereum to Solana to base to Canton like it just gives maximum flexibility for developers and builders to decide what application Do you want to build, and whatever it is on whatever chain like USDC will be there. And so I think that that's a really smart strategy and and generally, I tend to think most stable coins that are successful in the future will need to be multi chain. It's very hard to issue a stable coin and say, I'm only going to issue it on Solana, or I'm only going to issue it on Ethereum, but it's a lot of work. You got to have a different smart contract on every chain. You've got to make sure that it's audited. You got to make sure it's secure. You got to be able to monitor the chain. You got to deal with any issues that happen to that chain. And so I think that that's something that's probably under discussed, of the value of stable coins being multi chain, and a lot of credit to circle, really leading the way in terms of how quick they're able to add new chains and how many of them they have now,
Sy Taylor 43:02
well, this story will run and run. I'm sure we'll pick it up on future episodes. Kai, but I want to thank everybody for listening, and I want to thank Sinclair for joining us. Remind everybody what you guys do and where they can find out more.
Sinclair Toffa 43:14
So at muralpay, we have cross border payment software for businesses, businesses who are looking to level up the way they are paying other vendors, suppliers, other businesses around the world. We primarily focus on us, Latin America, US African markets, and we support a lot of operations such as Bill Pay, for instance, invoicing, being able to manage different accounts and connecting your bank accounts, and we are selectively rolling out our APIs as well to specific partners. And so to Kai's point on developers, you know, enjoying building with USDC. That's something that we've directly seen as well. It's a pleasure to build with, and even easier to integrate. I'm mainly active on LinkedIn, and that's primarily where you can find me. Awesome.
Sy Taylor 44:06
I will look out for you on LinkedIn. My friend Kai. How about you
Cuy Sheffield 44:10
on Twitter? Exit Kai Sheffield and visa.com/crypto
Sy Taylor 44:14
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