On Ep. 8 of Stablecoin Stats, Anthony Yim, Co-Founder @ Artemis and Andrew Van Aken, Data Scientist @ Artemis are joined by Matt Higginson, Partner & Global Head of Digital Assets @ McKinsey & Company to discuss how traditional finance institutions view the term 'TradFi', the 2025 inflection point for stablecoin adoption and more!
On Ep. 8 of Stablecoin Stats, Anthony Yim, Co-Founder @ Artemis and Andrew Van Aken, Data Scientist @ Artemis are joined by Matt Higginson, Partner & Global Head of Digital Assets @ McKinsey & Company to discuss how traditional finance institutions view the term 'TradFi', the 2025 inflection point for stablecoin adoption and more!
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Music by Henry McLean
Andrew Van Anken 00:10
Welcome to tokenize. These show focus on stable coins and institutional adoption of tokenized real world assets. My name is Andrew Van Akin, data scientist at Artemis, a crypto analytics startup, and I would like to welcome you to a special episode of tokenize, where we are diving deep into how stable coins are reshaping the payments landscape. Joining me as always today, my colleague, friend, CTO, Anthony Yim, co founder at Artemis, sir. How are you on this very cold morning?
Anthony Yim 00:36
I'm good. There's never a dull day in crypto. There was never a dull day in crypto. There's not adulting in crypto and equity. So I feel like having been dragged through, I don't know, hell post FTX, it's like what is a 20% drawdown in equities. Seems pretty it's not a day in crypto, just another
Andrew Van Anken 00:53
dull day. And today we have a truly special guest. Matt hangensen is a partner at McKinsey and Company in their financial services practice, and also serves as McKinsey's Global Head of digital assets. Matt, welcome to tokenized. How are you, and possibly even in a colder place? So I'm sorry to hear that, sir.
Speaker 1 01:08
Yeah, no worries. Good to see you, Andrew, good to see you and see thank you for inviting me. I'm good. I'm good. I think you're right. Never a dull day. I feel like these days we're getting somewhat numbed and immune to the wild swings or cycles of the markets, but always interesting. And yes, I'm up in New Hampshire, where we are, and still under several feet of snow, and so trying to keep warm, but good and very happy to be on this with you and looking forward to the discussion.
Andrew Van Anken 01:33
Well, the next round, we'll have off site in Miami to record this to keep everyone happy. It'll be awesome. A quick disclaimer before we get into things, I need to remind you that the views or opinions of your contributors today are their own and do not necessarily reflect those of the companies they are representing. Nothing we say should be taken as tax financial investment or legal advice. Do your own research. And lastly, before we get into things, I am thrilled to remind you that this podcast is made possible by Visa and powered by Artemis So Matt, stepping onto that current situation of all things crypto, I feel like the start of 26 has sort of been a whirlwind, and we've actually gotten a lot of news out of the stable coin ecosystem, with new stable coins being launched, daily updates on bills being passed through Congress. I'm curious, Matt, if we take a step back and you've been covering digital assets for a while now, how does 2026 compare to other years in the industry? As we start off the year,
Speaker 1 02:21
it does feel like it's a hectic pace. Almost every day, there's some pretty substantial announcements coming out, but we're also like, I've been in the space for a very long time. I started way back in 2012 I was the nerdy guy at McKinsey. I was mining old coins in my basement, in trade 12, trade 13, keeping my my old house warm. So I've seen many cycles. I was even reflecting this morning that, gosh, you know, if this is another crash today, this is my fourth right? And it's probably the first time I've been on a podcast recording when it's happened. But it happens. This is a very cyclical industry. What I will tell you that during the course of that time, we have been periodically very busy, and the busyness does seem to follow the highs and lows the market. But I would tell you that particularly the last 1518, months, we've been really busy. I would say back to Labor Day 2024. Was when things started to shift in anticipation of the new Trump administration in the US and the world following. And so we've seen this uptick in engagement with our clients, particularly 2026 feels a little bit different, I guess two or three reasons. One is that it feels like we're building we're actually building stuff. We're not planning, we're not strategizing, we're actually doing stuff. And a lot of our clients, probably half the clients I serve on what we call tradfi, they're actually engaging with the technology providers. They're figuring out how to do wallets and custody and actually offer and build services. So that's different. I think, just the whole momentum around stable coins and now tokenized money, more generally, tokenized deposits and yield coins and the like, that is also feels even more intense. Even the last few weeks and a number of consortia announcements and other strategic moves. And then I think the other part, I mean, McKinsey is a global firm. I serve clients around the world. It feels like an awakening outside of the US as well, where we're seeing, perhaps less mature economies, if you can call them that, realizing that their fast track, path into the world economy is if I can launch a national stable coin, if I can announce tokenized assets unique to my geography on the world stage, I can now attract this global audience that is getting access via stable coins and via blockchain. And so those three things, I think, actually building stuff the momentum around tokenized money, and then this, like global awakening is causing us to be mad busy right now? Yeah, no, that
Andrew Van Anken 04:44
totally makes sense. I'm actually going to come back to a couple of points that you talked about, especially emerging markets. Are, do the tradfi people like being called Trad fi, or do they want another name?
Speaker 1 04:54
You know, I was at a conference over this week where I think the room generally concluded we should just say phi. Take the distinction away, like we're all trying to contribute to the future of finance. So maybe we should just stop using I should stop using that distinction.
Andrew Van Anken 05:08
Yeah, I like that. Getting back to your point, about the last 12 to 15 months, you actually almost yourself predicted it, because in July 20, 2015 you wrote a great article the stable door opens, talking about how you were seeing a material shift in the payments industry. What do you think in 2025 was the inflection point for stable coins?
Speaker 1 05:26
Yeah, I will just say caution. Before you give me too much credit, I think in the 14 years of AIM, doing it pretty much at some point every year, I've said this is the year, so at some point you're gonna be right, but I need to keep trying right. I think a few things, and a lot of it really does come back to geographically me, working, being based in the US, and being influenced by politics and what's going on. And I recognize that this is a global phenomenon. But frankly, 2025 felt different, mainly because of the imminent arrival and then the passing of regulation. I think until that point, you'd say most of the folks we serve, particularly in this more grown up financial ecosystem, they were operating in a gray zone, right? There was no real clarity on whether or not these assets were properly compliant. And some people try to push the boundaries, but most, most banks are being very conservative and said, like, we can't engage yet. We see the future, but we don't have the right licensing regime to do that. I think you then say, July 2025, genius act finally passes, and all of a sudden the phone is ringing, and it's really this sense of, although it's a while before this gets implemented, it is the first formal green light, if you like, for banks and payments companies to say, Yeah, you know what? There's a real opportunity ahead, and we need to get in the flow of building for this on that I remember that night, or was it July 17, I think literally sitting at my computer, watching the live feed as the votes were coming in, and then the votes went up and went down and went up again. But, you know, finally got passed. And considering I saw this in 2012 astonishing, truly astonishing, that we actually now had a piece of like US federal regulation around these digital assets that were dismissed for so long. So I think that second, like the formalization, and then right on the heels of that, this, like first product market fit of having stable coins live in market potentially now regulated with common sense rules around reserving and utility are now actually able to deliver value. And it's like, okay, we've moved from the historical crypto speculative narrative into something where digital assets deliver real value that we can all believe in. So I think that was the sequencing, and I think it's that momentum has carried into this year as well.
Andrew Van Anken 07:52
Yeah, Anthony, I'll actually turn the question to you too, because in 2025 for the first half, we were just, you know, folding paper airplanes, moving into our new office, setting up couches, but now I don't sleep anymore. I just just respond to messages. So what do you seen from our
Anthony Yim 08:07
side at Artemis? I'll give you the perspective from a founder. It's like, remarkably clear that, like when we started Artemis, all of crypto was does not have part of market fit. So as a founder, you're dealing with both like, Hey, your company doesn't have product market fit, and also, actually, the industry you're operating in does not have product market fit. And so you're actually fighting a double whammy. And so it's like this extra, like, sort of crazy, chaotic environment. And fast forward to today, to this year. As Marc andreesson says, As a startup founder, as a startup, you're just peeling away levels of existential risk. And so like, the fact that we were able to survive to this point and are thriving and like, and are able to peel away the Hey, will crypto exist at all risk, and we can focus and hold on one thing that we're really good at, such as stable coin data. I don't step back often enough to, like, appreciate that, because, like, it's we started a company right after FTX imploded. Like that is like, the beginning of of Artemis. All right, actually, we actually started before and so, and we were invited to go to Bahamas. We didn't go because we were like, Yeah, we need to, like, focus on building, not not networking, and good to be busy sometimes, yeah. And so I haven't been in crypto as nearly as long as Matt, but I think I share the same sentiment where it's like, in awe that we are here today.
Andrew Van Anken 09:20
Frankly, yeah, yeah. It's certainly evolved from the well, there's still a lot of trading going on, but yeah, you can clearly see like clients now asking like, very intelligent questions and very like questions that you would get from like a FinTech company or what region story focused on. It's just become extremely global in that nature. Since this is a data podcast, I thought, let's show some data, because, Matt, we've been working with your team over the last few months to come out with essentially a new estimate of stable coin payments. And so for the people listening at home, we have a slide here showing four different categories of payment types, B to B, consumer to business, consumer to. A business consumer. So first, just taking a step back, Matt, what was the impetus for launching this study? And curious like, why now try and launch this study?
Speaker 1 10:09
Yeah, no, it's a great question, and it sort of goes back to the roots of who I am and the role that McKinsey has, which is as a trusted advisor. Our job is not actually to convince clients to go have an engagement with those, or go do stuff. But it's actually to give them facts, the real reality of what's going on. And I will tell you that I was hearing all too often these sort of astronomical numbers about the volume of transactions of stable coins. I mean 10s of trillions per year, the classic bigger than visa claim. And if I put that in stark contrast to what I was hearing from our banking and payments clients. So like, I don't know where this is coming from. Like, we don't see the volumes. There's no evidence for this. And actually, they said, Just look, can you, can you figure out the evidence? Like, where is the evidence? That shows me that we're moving, frankly, similar volumes to what the major payment networks are. And so I think that was that need for the sort of sobering reality was the big trigger, and ultimately, making this distinction between adjusted volume that others are reporting versus actual real world payments. And so this is why, in some ways, you know that this slide is important in that those categories are categories of payments that banks and payment providers actually recognize. This is not MeV on the crypto exchanges or settlement of bitcoin trading. This is actual business to business and customer, consumer to consumer payments. And so that was the trigger. And I will admit, and we can get into the numbers, but even I was surprised at actually how low these numbers were when the order of a few 100 billion versus 10s of trillion. That just gives you some idea of the difference in scale of actually what's going on in payments. Yeah.
Andrew Van Anken 11:53
Well, I think the interesting thing that stands out to me is that it's obviously a low base, but the two areas that are growing the fastest are kind of completely different. So you have the B to B payments, but then you have also card link spending, which is a lot of small transactions via debit cards. So starting with B to B, Matt, yeah, I'd love to hear your sense of what are you hearing out in the field of you know, why is B to B going so quickly, and what's kind of been the perception of B to B payments within stable coins. Yeah.
Speaker 1 12:23
And also just, I want to clarify so we don't give the wrong impression. So this is not a slide that says there is no future for stable coins. This is actually the opposite. And it just says, Look, we are starting in reality from a low base. But your point, Andrew of hundreds of percent year on year growth says it is these areas that are growing fastest. It's a little bit like in the broader real world assets. I mean, it's not crypto that's growing fastest. It's like tokenized equity. So the stuff that's starting from a small base but accelerating, that's the stuff to watch for. And I think it just says we were perhaps earlier in this hockey stick of adoption that people were thinking, right? That was kind of the sobering part. I think the excitement around B to B in particular is it says there has been an unmet need in the commercial B to B payment space, whereby historical rails, the classic correspondent banking rails that carry these high value cross border payments, or even high value domestic are just not delivering what those customers need. The end of the day. I mean, we'll keep going back to this. But this industry, and in particular the payment side, grows because we have products and services that customers need, not because we found this clever widget that does something clever, but because we're actually solving a problem, right? And so I think that's the root of this B to B piece, which is, historically, payments have been slow. There's been friction, and maybe this begins to solve that. And so early on, that's, I think, where we've seen the growth. I might come back to whether or not there really is a problem, but I think that's why we're excited about B to B, because it seems to be addressing one of these perennial challenges and pain points.
Andrew Van Anken 13:59
Yeah, Anthony, yeah, I'm going back to Venmo days. Why do you think P to P payments is not growing as fast? Do you think this audience is better served than B to B? Or love to get your thoughts there.
Anthony Yim 14:11
I think that P to P is actually one of the most original use cases of crypto, and also of like centralized exchanges, they've been serving these use cases for many, many more years, and I think B to B. And so each individual these categories has an S curve. It's just you're like a different part of the S curve. And so, for example, like card spending Venmo was acquired by Braintree. Braintree is one small part of the extremely complicated end to end process of like, actually making credit cards work, and cards work right? There's like the four party payment model. There are many intermediaries between and Braintree, just like one little sliver. And like I saw firsthand as a developer, like how many things I have to integrate with, it also takes use cases like that for a while to unravel and start using stable coins and a better rail, but to. Matt's point, there's a real use case there in that, like, hey, stable coins is lowering the friction, increasing the time and lowering the cost of moving money, but it's eating of these, like legacy systems now, and it took a while to see us go up that
Speaker 1 15:15
S curve. Yeah, I think maybe Anthony did, I agree with you. But I think there's also, again, curve out, to my point, around what's the delta between what is today versus what's the best practice, or what's the dreams the future state, the Nirvana of payments? And I would say the P to P space in many countries, at least domestically, has largely been solved. Right? We can pay each other instantly on this call, not even using Blockchain rails, but just using existing real time payment rails. And so again, the need to adopt something different to achieve the same goal is kind of less strong that is going to differentiate these adoption curves going forward, which is, how big is the delta? How big is the improvement?
Anthony Yim 15:53
Yeah, that's a great answer. It's the most obvious one too. It's like, obviously you can use Venmo to just do p duty payments you, and that doesn't use any any blockchains.
Speaker 1 16:01
And the only reason that you wouldn't use that is you, maybe you try and do in a different way, or maybe you're trying to obfuscate the payment, or some of the reason, right? But it just the obvious one is usually the best debt. Yeah.
Andrew Van Anken 16:13
Are you surprised, Matt, like, how much the card networks themselves have been leading into I mean, card spending is up. It's still obviously a small base. I think these companies have been saying they're doing annual they're doing annualized volumes around four to $5 billion but I feel like every conference I see that pops up every earnings call, you know, card networks are talking about this. Are you surprised how much they're leaning into this space?
Speaker 1 16:33
Not surprised at all. And it's funny when I think about the clients we serve and what their posture has been towards, particularly to stable coins or tokenized value. If you have a business that potentially is at risk, you're all over this, right? I mean, whether you're a big GCA with an existing payments business or either card networks, or even some of the payment fintechs themselves that have been solving cross border, they are all over this because you need to embrace this if there's a potential existential threat coming out of it, which, so it's almost like a hedge, which is, yeah, I will enable point of sale acceptance of any digital asset. I will enable instant settlement or provide custody. Of course, of course, that's the safest place. So I'm not surprised. And I think we will continue to see by the way, we will continue to see these leaning in opportunities as this whole space evolves, and probably a separation, then between those folks that are leaning in versus those who are saying, you know, it doesn't actually affect me very much day to day, and I'll be less excited for the time being.
Andrew Van Anken 17:36
Anyway, yeah, makes sense, Matt, since we have you, I want to cover three very random topics. We don't often get someone like this on a podcast, so AI, apparently people are using it. Apparently, it's very exciting out there. I hadn't heard that this is all new, but I think you've been spending a lot of time in this space and agentic, AI and blockchain. So it seems like there's a natural fit for the two to come together. But curious like, what's the conversation out there? And are we just still so early to this topic, yet,
Speaker 1 18:08
it's a great question. I think actually, there's a role on both sides. In other words, agentic, needing to use blockchain, instant payments and stable coins. There's also somewhere blockchain benefits from AI, and perhaps we start there, which is two very pertinent, relevant topics, important technologies, very much on the agenda of CEOs of our clients. I'm not sure they've fully collided yet, but now more and more conversations are looking at that collision. I think on the finance side, really, the conversation I've heard this repeated many times is, does the role of cash in a wallet disappear in its traditional sense, and instead, is my total net worth, essentially what is being carried in my wallet in some form or other? So you find a way of integrating not just my deposit, my salary, my income, but also all my investments, both liquid and illiquid. Everything getting tokenized. Essentially, we have a wallet or portfolio of tokenized assets. At that point, it needs some rather intelligent decisioning to say, when I go and make a purchase, what should I liquidate to make that purchase? If I'm buying a coffee, it's gonna be different than if I'm buying an automobile or a house. And so this idea that actually an agent can be sitting over that portfolio making wise decisions for me in real time is something that when I first heard this a few months ago, I was like, No, sounds kind of wacky, and sci fi. Now I recognize that all parts of that already exist, and experimentation is moving towards, I mean, there's pilots to this already. So I think there's a piece where agentic AI essentially becomes the gatekeeper over my holistic view of all my assets, which are all on chain. And then it's almost like strategies for investing. I set my strategies and my threat. Shoulders and just let it do its business. I woke up by my coffee, and I just tap my phone, and my phone does the business rather than needing any sort of cash. So I think that's one half that we are seeing and hearing, and we can go deep on that. I think the other side is the agents themselves benefit from this technology, maybe two or three examples. One is any transactions need native money, and it is likely that those transactions are micro transactions, high velocity, low value. You know, this classic, how do you solve the micro transactions? Well, I think we just solved it right through tokens. I think there's also a piece where, because blockchain is permanent and auditable, it sort of creates this trust layer. So there's an awful lot of transactional behavior going on. And so at some point you need proof of execution between two agents doing stuff. And then if you even kind of take this even further, you say, Well, can we use the auditable history on change, or actually look at like the performance of an agent? And does that also give us? I mean, it is indelible. You can see everything that's going on. So I think there's a backbone here of how agents operate that essentially could be recorded on blockchain, maybe not the same blockchain that carries our everyday financial transactions, but essentially this kind of universal ledger, universal source of truth that will be essential for these agents to operate effectively.
Andrew Van Anken 21:22
So at first point it's interesting. So it's like, if everything becomes tokenized, you can have this super manager, if you will. And then if I wanted to buy the eighth Coffee of the day, because so many questions on stable coins, I can just like, sell my USDC, and that instantly clears, versus me buying my I don't have anything nice in your refrigerator, like it would sell, like, s, p5, 100 stock, but since it's all tokenized, you can just do that instantly, anytime, exactly,
Speaker 1 21:53
and like, we're all making decisions every day around how we pay for stuff. I mean, you know, if you carry more than one credit card in your wallet, you're making a decision about which 1am I using, what benefits, what rewards, you know, why? Oh, I like that. Yeah. I like that. So it's sort of that, can you take that sometimes uneducated gut feeling decision and turn it into something scientific, and I think you just expand that into all of your net worth?
Andrew Van Anken 22:17
Yeah, I like that. Anthony Yim, you've been, I don't actually, don't know if it's you. It could be a Claude code bot that you've created because you've been using it so much recently, since you've been pretty bearish on agentic payments recently, on our last episode. So have you? Have you come around after single handedly fueling anthropic capex expenditures?
Anthony Yim 22:36
I mean, I think, to be clear, I wasn't bearish on agentic payments in general, I think there are a lot of things to be solved before, and I think that is always going to be the case of how like problem gets solved in like, capitalistic America, where just like, shoot first and then figure out later. It's like, I think agent payments, there are, like, six different protocols. It's just gonna be like a battle different l ones, like, it's gonna be a battle of different protocols. There's gonna be probably, like, compliance issues, all this stuff. And then I think as these issues come up, the markets will solve them over time. But it's like, too early to be like, Oh, look, X 402, is definitely the thing. It's just way too early. The markets still have to do their thing. But I do, in general, believe in agents being able to spend it's like, I saw, I think, something today about buy, now, pay, maybe, like thing, right? It's like mixing bmpl and prediction markets and, ah, interesting. And like lotteries. And so it's like, maybe you can program an agentic bot that calculates the EV of the maybe part, and you can actually, like, get away with getting a discount. That's like, a very mathematical way to offer discounts. Like, maybe that's the future of commerce. It's like, answer.
Speaker 1 23:48
This reminds me of, maybe before you talk about alchemyx, remember this. So alchemics would grant you a loan and then the native token rewards would pay it back automatically. I'm like, this is brilliant. So, yeah, maybe there's a mathematical, real version of that.
Andrew Van Anken 24:04
Nat, you're a true defi hero for quoting alchemics. This is how we know I'm
Speaker 1 24:08
sufficiently Degen that I once was on a call and we opened it up with a CEO of one of our clients. I'm not sure if he spoke to us again afterwards, but it was fun where it lasted.
Andrew Van Anken 24:17
Yeah, it certainly was, yeah, the phrase of token is like, obviously getting in. Ai, we have everything as a token, and now blockchain, we have everything as a token. Do you think the two worlds collide somehow in this token, or does one try to fight the other one for the trademark? I'm curious. Like, how have you thought about
Speaker 1 24:36
that at all? I'll complicate it further. We also get, I also get inquiries from credit card issuers and network providers on like, tokenize, you know, account numbers and stuff. So even further, I don't know, I it's a little bit like the discussion around tradfi and defi earlier. I think this concept of tokenizing stuff at some point becomes such the default that we stopped talking about. We'll just go back to talking about equity. And bonds and funds and stuff. So I don't know. I think there's probably an interim period where we have to make the distinction. But over time, I think it's a form factor, right, for something rather than the asset itself.
Andrew Van Anken 25:12
Yeah, yeah, that makes sense. I'm
Anthony Yim 25:13
curious actually, like, if the term Cloud has gone down in usage, it's like, right? It's like, everything's obviously in the cloud. Now there's no, like, non cloud. I think there's like, a similar analogy. Yeah, I still remember
Andrew Van Anken 25:24
that Microsoft commercial where they're sitting in an airport and it's like, I think it's like a mom and a kid and they're like, to the cloud. And that was like, I feel like that commercial aired before half of the people at Artemis were born. I swear
Speaker 1 25:37
I might have to buy my aircraft ticket online.
Andrew Van Anken 25:43
We stopped doing that. Yes, online, yes. Are you online? That is also true. Shifting gear, slightly non USD, stable coins, this is something actually at Artemis. We've gotten a bunch of questions about this here, but still, obviously less than 1% of the market. We starting to see some traction in euros, yen or other emerging market countries. Matt, I'm curious like, is there anything on the infrastructure side that needs to change for non USD stable coins, or how does this market steal share from the traditional dollar?
Speaker 1 26:15
Yeah, and that's great question, and it's tough, right? Because we've already had this, like first mover advantage of an already global in USD denominated which in certain countries, is attractive, certain countries not attractive. But our sense right now, and it reflects a little bit of our work, is that I think it needs some sort of national coordination or national momentum for some of these kind of non USD stable coins to launch successfully. So not to go into real client work, but we're working with central banks, with banking federations, even even just kind of consortia of large numbers of banks or financial institutions, to figure out how they collectively can launch something so avoid fragmentation, really go with a single solution per currency and trying to Find a way to make it scale, I think structurally that then automatically requires some kind of regulation to be in place. Obviously, I've watched with some amusement how some regulators are now tackling this. Should we pay interest or not, and is that good for the inflation or not? And so I think we will see some varieties of the kind of underlying rules around stable coins, I will just say, the piece we rarely talk about that's always overlooked is and yet, there still needs to be a unique selling point for that particular stable coin. And to me, a lot of that is around, what does it give me access to I couldn't otherwise. What's the exclusive assets I get access to. Why is that in demand? And I might just give you an example, and I'll pause, but there are certain countries I'm speaking the regulators pushing for tokenization of some fairly unusual and illiquid assets that could be commercial real estate, it could be precious metals, it could be something very specific to a geography. I think you need that unique selling point of demand for something that's not otherwise available, through which the national stable coin becomes the gatekeeper, right? I could only get access to an asset if I have a digital Dirham or a digital one right in Korea, and creating marketplaces where that becomes the currency for exchange, the exclusive currency for exchange. I think that helps some of these non USD stable coins to grow. I'm not sure without that, that we get over the problem that some of these currency are just not reserve currencies, there's no demand. So why would you have it anyway? So I think there needs to be this demand created, and those work backwards from now to say, does it make sense to have a non USD stable coin?
Andrew Van Anken 28:46
That's a super interesting use case. I actually never thought of that, where you're accessing very unique investment and opportunities through a stable coin, if you will. And that way it like onboards people to that own stable coin.
Speaker 1 29:00
That is the conversation we're having. And I think these countries are saying, this is our moment. This is our opportunity to do that. Like to create some demand for let's use the Korean one as an example. And I think you sort of go down this path of going, okay, where in the world are these scarce in demand assets? Where does this make sense when they can play a bigger role in the world stage.
Andrew Van Anken 29:22
Yeah, what countries have you seen, or have you read that? Do you think are furthest along in regulating stable coins?
Speaker 1 29:29
Yeah, there's a few. I mean, by the way, furthest along doesn't necessarily mean having success, right? So we have to recognize, like Nico is the first to the table here, and didn't play out that way. I think some of the traditional places that have been on the front foot with Blockchain for a long time, likes of Singapore, have obviously already kind of moved in this space. They have their payments institution license. I think we're seeing quite a lot of movement, particularly in the Middle East. So UAE, with vara as their regulator, being on the front foot with their payment Token Service. License Hong Kong, simply because of its strategic position, obviously, between China and the rest of the world. I think it's these economy these locations where they've already been pushing innovation for a long time. They've established some form of regulation, and now they're actually really trying to accelerate the licensing and the proliferation of the use of stable coins. And then I think you see some of the other emerging economies. I mentioned a few like Vietnam or Korea or Malaysia, and others that are starting to say, yeah, if we can take the best learnings from genius or Mika and turn it into a set of common sense rules, we could fast track that through, and we could probably spark innovation in the country, yeah.
Andrew Van Anken 30:41
What about the global consortium model? I know you've written about that in the past, where, instead of these countries, like having five different one stable coins, does it make sense for 10 banks to join together to issue like one euro? Or how do you see that playing out?
Speaker 1 30:58
I might be the contrary in this, but I've been saying consistently for a long time that I'm not a big fan of this idea that everybody issues their own stable coin, and there's lots of stable coins per currency. I'm just maybe because I'm British, I'm very pragmatic. I'm like, tell me the case for more than one or two versions of a stable coin per currency. I just, I feel like fragmentation leads to bad things generally in this industry, whereas actually consolidation will lead to the efficiency we see. So where I'm going with the consortium model is, if that gets us to scale, and now if that becomes then a single fungible stable coin per currency, great, right? And even better, if the banks can figure out how to do this in a way where it's not actually harming their balance sheet by some kind of clever special purpose vehicle for issuance, but the deposit stay on my balance sheet. Great. I think if we end up having lots of competing consortia doing their own version of their own currency, at some point someone's going to lose in that game. It's a scale game. So very supportive of consortia, if constructed the right way, I would also say based on what's going right now, if you're gonna have a consortium to issue a stable coin, you better know why, and you better know how, right just having a stable coin doesn't solve anything. You actually need to understand use cases, tech integration, compliance reporting, everything else that goes around it otherwise, honestly, it'll just be a flop.
Andrew Van Anken 32:23
Yeah. So really having, like, a clear use case of why are launching a stable coin, what it does, and how partners play nice with each other, essentially, Okay, last question, Matt and I'm gonna ask you the same question to you Anthony, as the head of digital assets at McKinsey, what's the one piece of advice you would give to payments executives? Listening to this episode today,
Speaker 1 32:41
you probably find out I find it hard to give one piece of advice, but historically, I kind of went with the classic, hope is not a strategy, and they're all the cliches with it. But I'd also say like FOMO is not a strategy either. And so when we think back to the report that we published together the analytics, why do we do it? Because you need facts, right? If you're actually building a business here, you need check your damn facts and make sure you know what's going on, I think, make sure that any assumptions you're building into business models are grounded in facts and grounded in reality, so you're actually starting from the right baseline assumptions, and then ultimately, make sure the strategy then you're building is customer backed with a real use case that delivers real value that will drive adoption. Again, it's very pragmatic advice, but it's like ground yourself in facts. Find out what's going on the real world, not what someone at a conference told you, and make sure you're building something that delivers differentiated value to your customer, then you have a strategy, then you have a reason to move forwards.
Andrew Van Anken 33:44
Anthony, what is the one piece of data driven advice? What data points should be looking at? What give people advice about data and stable coins? Please. We all need it.
Anthony Yim 33:54
I wanted to answer the exact question, did you okay?
Andrew Van Anken 33:57
Yeah, sure, you can do that, and now you're the CO head of global digital assets at McKinsey.
Anthony Yim 34:02
Well, my answer was, like, it's simple that you should hire Matt and his team to work with us.
Unknown Speaker 34:07
I think we paid you to say that. No, I'm kidding. Yeah. I
Anthony Yim 34:11
think the advice actually, I would give for payment executives is we're in this, like, unprecedented time of creative destruction, both from finance and AI, even as an operator. I'm like, I don't know what the future looks like. Two years ago, you'd be like, it's insane for me to think that software gets crushed, but that's happening right now. And the lesson I have for myself and also for other company operators is that what Matt said, Don't FOMO into it, get a clear baseline picture, and then do your very best to get around innovators dilemma. So what this means is that you carve off a Skunk Works team, and you experiment with AI and stable coins and payments. You keep this team separate outside of the regular the core business lines, and you have that team just run at something that's really innovative. I think every company executive should be thinking that way right now, because there's. So much disruptive force going on right now across every dimension, truly, if they don't do that, they're toast in five years.
Andrew Van Anken 35:06
Yeah, the only advice that I have is warm offsites in the wintertime, cold offsites in the summer. That's the only advice I have for you, Matt, it was a pleasure. Thank you so much for coming on today. Where can people find more about you and your work at McKinsey?
Speaker 1 35:19
Yeah, thanks for inviting me and bringing me in. This was fun. So probably the simplest answer is, McKinsey, as you know, has an extensive online presence, cloud hosted. Maybe, yeah, cloud hosted. Go the website. We have a very large, now global team serving clients on this topic. You'll find information about our data sources, our platforms, our solutions, and and then just contact me directly and more than happy to explore opportunities with
Andrew Van Anken 35:44
you, Anthony. Where can people find
Anthony Yim 35:46
more about you? Yeah, folks can find me on X only Twitter at my full name. So my handle is
Andrew Van Anken 35:51
Anthony Yim. That's www.x.com, for the old people at home. Well, thanks so much everyone. If you haven't already, please subscribe to tokenize on Apple, Spotify or Whatever podcast app you use and stay stable everyone.