Latest / CRYPTO 101 / Ep. 703 The Future of Stablecoins with Insights from Reeve Collins

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Ep. 703 The Future of Stablecoins with Insights from Reeve Collins · CRYPTO 101

0:00
[SPEAKER_00]: Welcome to the Crypto101 podcast, presented by Gemini.
0:04
[SPEAKER_00]: Your bridge to the future of money.
0:14
[SPEAKER_00]: All right, everyone, welcome back to the Crypto 101 podcast.
0:20
[SPEAKER_00]: We have another exciting episode in store for all of you.
0:23
[SPEAKER_00]: And this one is probably going to be a familiar face.
0:26
[SPEAKER_00]: Some of you have heard about him.
0:27
[SPEAKER_00]: You've definitely heard of some of his products that he's been building over the years.
0:31
[SPEAKER_00]: As well as some of his companies.
0:32
[SPEAKER_00]: Because we're joined by Reeve Collins.
0:34
[SPEAKER_00]: He is the co-founder and chairman of WeFi, STBL, and reserve one.
0:38
[SPEAKER_00]: And prior to all this,
0:40
[SPEAKER_00]: He's one of the co-founders of Tether, who we all know as the largest stable coin and the crypto markets right now.
0:47
[SPEAKER_00]: So, Reeve, welcome, and it's good to have you.
0:50
[SPEAKER_01]: Yes, thank you for having me here.
0:51
[SPEAKER_01]: I'm happy to dive in.
0:53
[SPEAKER_00]: Well, I'll tell you out.
0:54
[SPEAKER_00]: There's a lot to talk about.
0:55
[SPEAKER_00]: I know people are always kind of, but I don't want to say bug them, but people are always asking you, stablecoins, this stablecoins that you've got a lot more going on now than just working with stablecoins.
1:06
[SPEAKER_00]: And we want to make sure that we dive into all of that.
1:08
[SPEAKER_00]: But man, what an interesting time in the market over the last year or so, regulations have been changing.
1:14
[SPEAKER_00]: How cryptos have been looking at has been changing.
1:17
[SPEAKER_00]: Obviously, the area that you have so much history with stable coins is exploding into this massive industry where you have banks that are looking at it, you know, asset managers, countries, you know, individual companies as well.
1:31
[SPEAKER_00]: You got everyone that's kind of turning their minds towards this stuff and saying, what are all the different ways that we can use this, especially in different ways?
1:39
[SPEAKER_00]: Because stable coins are not the new.
1:41
[SPEAKER_00]: You know, they've been around
1:46
[SPEAKER_00]: the underlying technology can be used in so many different ways.
1:50
[SPEAKER_00]: Then what we're so used to so far.
1:52
[SPEAKER_00]: So man, there's a lot to talk about.
1:55
[SPEAKER_00]: Before we even begin to get too deep into the weeds on all this stuff, for the audience out there, let us know a little bit about yourself and how you got started working with all of this in the first place.
2:06
[SPEAKER_01]: Yeah.
2:06
[SPEAKER_01]: It has been a really great journey.
2:09
[SPEAKER_01]: I've looking back on my career.
2:11
[SPEAKER_01]: I'm always kind of on the cutting edge of these technological revolutions way back in the late 90s with the internet.
2:17
[SPEAKER_01]: I was at one of the very first ever online advertising companies, the first ever online advertising agency putting the first ads on the internet.
2:24
[SPEAKER_01]: And so really being able to see how this technology revolution, this global shift in how people back then consumed information
2:34
[SPEAKER_01]: And now for the first time, the whole world was connected via the internet, at least in the free flow of information.
2:42
[SPEAKER_01]: So it was very deep in that world for a decade plus.
2:46
[SPEAKER_01]: And then the blockchain came out.
2:48
[SPEAKER_01]: And I first got introduced to that in 2013.
2:50
[SPEAKER_01]: And the light bulb that went on was, well, the internet, the movement of information, and the blockchain, especially back then, it was so new and no one understood it.
2:59
[SPEAKER_01]: But it's like the movement of money, just the global free movement of money.
3:04
[SPEAKER_01]: And so seeing that, there's a significant amount of potential there.
3:09
[SPEAKER_01]: And to me, what was really amazing about it is,
3:11
[SPEAKER_01]: the internet educated the world and connected the world and allowed everyone kind of a much more equal plane field however they still couldn't transact globally and fluidly and so that's kind of
3:23
[SPEAKER_01]: where I saw a lot of promise with blockchain and that's how kind of the stable coin came about because when you think about what the blockchain did was allows you to move money, but the value that you moved was Bitcoin, especially back in the beginning, and that was the only currency.
3:37
[SPEAKER_01]: And Bitcoin was this really strange type of foreign currency based in code that people just didn't understand that alone want to move globally around the world.
3:46
[SPEAKER_01]: And so that's where the
3:50
[SPEAKER_01]: dollars, euros, yen, real-world currencies, put them on the blockchain and allow them to move globally instantly and for free.
3:57
[SPEAKER_01]: And so that was the advent of Tether.
4:00
[SPEAKER_01]: And doing that, still that's over 10 years ago, it's just taken a really long time for the rest of the world and for the ease of use and for the acceptance and trust to build where stable coins are, where they're at today, which is a completely different story than it was 10 years ago.
4:18
[SPEAKER_00]: Yeah, I mean, you hit the nail on the head there, completely different story and place than where we were 10 years ago.
4:24
[SPEAKER_00]: And around the time that Tether was being created, there was, by that point in time, there was definitely some volatility entering into the crypto space.
4:34
[SPEAKER_00]: I mean, people saw this asset that emerged called Bitcoin and it blew up from where it was, you know, under $1,000, $1,000 to all of a sudden, by 2014, being so much more,
4:45
[SPEAKER_00]: uh, then dollar, you know, increasing, you know, dozens of times fold and I think it made sense and people said, hey, you know, this is, this is cool that we can transact in it, but the valuation of it has been fluctuating quite a bit since its inception and man, it's, it was so cool because around that time you kind of had the birth of a lot of altcoins and stablecoins and everything,
5:09
[SPEAKER_00]: And what that really did was it spurred a whole new era, a whole new new industry of how blockchain and crypto could have been used.
5:20
[SPEAKER_00]: And now you look back at it all over a decade later.
5:23
[SPEAKER_00]: And it's crazy to see how far we've come.
5:26
[SPEAKER_00]: I mean, did you ever imagine that the stablecoin market could reach $300 billion and projected to reach into the Chileans by the end of this decade?
5:37
[SPEAKER_01]: Yes, in the reason being, it's not about stable coins.
5:41
[SPEAKER_01]: It's about upgrading an infrastructure, right?
5:45
[SPEAKER_01]: So we have our traditional financial infrastructure.
5:48
[SPEAKER_01]: And especially when you go back 10 years ago, it was even slower than it is today right now.
5:53
[SPEAKER_01]: Wires have become faster and lots of companies like PayPal are out there that you can move money, but it's still slow that antiquated infrastructure where you have to pay 20 to $60 for a wire and wait 1 to 7 days for a decleare and all of that stuff.
6:07
[SPEAKER_01]: You know, let alone.
6:08
[SPEAKER_01]: That's a wire.
6:09
[SPEAKER_01]: That means the person on the other end also has high quality financial services.
6:14
[SPEAKER_01]: But the example you always use is if you want to send $5 to someone in Mongolia, it's literally impossible until blockchain.
6:23
[SPEAKER_01]: And so that leap ahead of how much better and infrastructure blockchain provides for financial transactions.
6:30
[SPEAKER_01]: It becomes a no-brainer of course all transactions will convert to some sort of blockchain meaning the ability to move globally and live for free to transact in that manner.
6:41
[SPEAKER_01]: And so the stable coin is just the bridge.
6:47
[SPEAKER_01]: The stable coin still is a dollar, a euro, it's still fiat currency, it's just represented on chain.
6:53
[SPEAKER_01]: So it's not a different kind of currency, it's still fiat, it just moves differently.
6:59
[SPEAKER_01]: When we get over the nuances of how that fiat is put on chain, meaning how reliable it is it, how liquid is it, is it gonna hold its peg?
7:11
[SPEAKER_01]: Because over this last 10 years, I'll get into in a minute, that's become much more reliable and much more regulated.
7:18
[SPEAKER_01]: Then it really just becomes a better way to move money.
7:23
[SPEAKER_01]: And that's why right now, and the reason why it's finally shifted,
7:29
[SPEAKER_01]: It's the regulations have opened up.
7:32
[SPEAKER_01]: The U.S. has leaned in and said stable coins are okay.
7:36
[SPEAKER_01]: The countries around the world aren't trying to debank and imprison anyone who wants to lean forward into this new technology.
7:44
[SPEAKER_01]: And so the moment that happened, the big banks, the big institutions, the people with the trillions of dollars that run on this old antiquated system, they're the first ones that line up and say, yes, let's put it in the new system.
7:59
[SPEAKER_01]: But to do that, the bridge is a stable coin.
8:02
[SPEAKER_01]: That's why today you hear so much hype and it's about so much money is going to transfer and to stablecoins is because they want access to this new better system.
8:11
[SPEAKER_00]: So when you talk about all these big banks and all these big smart money players as people like the calm, the whales of the traditional finance space, you know, we hear a lot that other interested and they could use the stuff, you're saying that they genuinely are interested and that they, I mean, it sounds like it's not a matter of they want to use this stuff, it's a matter of like they're going to use this stuff that that's what it sounds like.
8:36
[SPEAKER_01]: Absolutely.
8:37
[SPEAKER_01]: To me it's a it's a it's a foregone conclusion and it's definitely inevitable.
8:41
[SPEAKER_01]: Like that genius out of the bottle.
8:43
[SPEAKER_01]: There's a slow expensive system.
8:44
[SPEAKER_01]: There's a new fast system that's cheap and global and it connects everybody.
8:49
[SPEAKER_01]: And.
8:51
[SPEAKER_01]: you can create derivative products that were never possible before in the traditional financial system.
8:57
[SPEAKER_01]: Not only that, the traditional financial system wants distribution, they want more people to interact, right?
9:02
[SPEAKER_01]: But typically, you had to interact within your country, you had to interact with people that had access.
9:07
[SPEAKER_01]: Now you can have distribution of your products on a global scale.
9:11
[SPEAKER_01]: So all of those re-end this new system,
9:15
[SPEAKER_01]: is easier to manage.
9:16
[SPEAKER_01]: It's cheaper to manage.
9:17
[SPEAKER_01]: It takes less overhead.
9:19
[SPEAKER_01]: And so yes, they all want to upgrade into this new type of into plug into the blockchain ecosystem.
9:27
[SPEAKER_00]: Where's the benefit here?
9:28
[SPEAKER_00]: Because when you look at the system that they have in place, we've seen a little bit of, I don't know if drama is the right word, but in recent weeks with the Clarity Act last year, we had the Genius Act to get past this year, all eyes are on the Clarity Act, and there's been a bit of a disagreement between maybe more crypto natives like Coinbase and then the banks, especially when it comes to stable coins,
9:51
[SPEAKER_00]: Is there a world where there's like a win-win for both the users and the companies and maybe what does that look like?
9:59
[SPEAKER_01]: So, I would advocate and say that what the crypto community is pushing for in the Clarity Act is better for the users.
10:09
[SPEAKER_01]: The main point of contention is giving the users yield when they hold the stablecoins.
10:17
[SPEAKER_01]: And it's because it's so natural and easy for all of these crypto companies to offer that it could be natural and easy for the traditional companies to as well, but they're trying to protect their embedded traditional antiquated business models and so there's a lot of regulation going into stop this progress to stop innovation because of the entrenched incumbents right they're super powerful to the most powerful companies in the world that these global banks.
10:43
[SPEAKER_01]: and so they're throttling it, and so they're really trying to stop the yield sharing.
10:50
[SPEAKER_01]: However, and they might win, but they might win this year, but then next year or the year after, it's slowly going to be chipped away because it's very difficult to stop significant progress indefinitely.
11:03
[SPEAKER_01]: They can slow it down, but it's coming, and so it'll come.
11:06
[SPEAKER_01]: When those traditional banks figure out how to evolve their model, where they're the ones offering it as well.
11:11
[SPEAKER_01]: Because if they did it right now, they would lose all their business.
11:14
[SPEAKER_01]: But over time, they'll probably be able to offer to the consumer also, and will eventually get this type of yield sharing more beneficial products for the end user.
11:24
[SPEAKER_00]: Yeah, I think that this is, it's fascinating for, because for listeners out there who don't know, you essentially get to see both sides of the argument.
11:36
[SPEAKER_00]: Obviously you have this long history with stable coins with what you're working on at STBL, which we're about to get into for everyone listening and obviously tether.
11:45
[SPEAKER_00]: And then on the other side with Wi-Fi, I mean, you guys are,
11:48
[SPEAKER_00]: like the first decentralized on chain bank.
11:51
[SPEAKER_00]: And so you kind of get both sides here and you're saying, okay, well, I see it both ways, but it sounds like you kind of have your mind made up of like, there is like a best answer for this, right?
12:02
[SPEAKER_01]: Well, the side for, so we find, yes, being and providing the next generation of banking services and what that typically, what that really means is it's banking services, it's just done fully on chain meaning much more efficiently.
12:17
[SPEAKER_01]: Yeah.
12:17
[SPEAKER_01]: We're offering a full suite of banking services so much where soon you'll be able to log in and just you'll just see USD and you'll be moving USD around you're moving dollars.
12:26
[SPEAKER_01]: There's no there won't be a need to label it as a stable coin even though on the back end it's tokenized and moving on a blockchain it's still a dollar.
12:35
[SPEAKER_01]: So that's the future of banking is that.
12:37
[SPEAKER_01]: For the end consumer, and I've been saying this for 10 plus years.
12:40
[SPEAKER_01]: People say, I don't get blockchain.
12:42
[SPEAKER_01]: I don't get crypto.
12:43
[SPEAKER_01]: Like what you don't need to, what's going to happen is, if you're a Wells Fargo customer, your Wells Fargo services are going to get better faster and cheaper.
12:51
[SPEAKER_01]: It's just the back end that's changed.
12:53
[SPEAKER_01]: And a lot of new banks are emerging, like Wi-Fi that's just fully on-chain.
12:57
[SPEAKER_01]: But anyways, Wi-Fi or these fully on-chain banks are happy to offer stable coins with yield.
13:03
[SPEAKER_01]: It's really the entrenched
13:05
[SPEAKER_01]: incumbents that aren't ready because their business models can't handle that they've other products that offer the yield and they don't want to have their so-called like checking account having three four percent right so that's that's that's that's a big issue for the traditional financial services but I believe these fully on chain financial services like we find are also the future it is the evolution of banking.
13:29
[SPEAKER_00]: So you think that a lot of these big banks that are out there right now are going to slowly move more towards the Wi-Fi model, maybe that's like tech integration, or do you think that that sounds easier said than done, right?
13:43
[SPEAKER_00]: Because they're kind of said in their ways, we know that they historically move kind of slow when it comes to this stuff.
13:49
[SPEAKER_00]: And for years, it felt like they fought it and they fought it and they fought it.
13:52
[SPEAKER_00]: until they reached the point where they're like oh well we can't and like you know notoriously back in the day you had Larry Feng which isn't a bank really with black rock but a big asset manager and they fought it and now he's a huge crypto advocate you have Jamie Diamond of JP Morgan again someone who's historically really bearish on crypto now turning around and he's making these positive comments on TV but it feels like they they fought it for so long until maybe they realized that they couldn't so
14:20
[SPEAKER_00]: Do you see them just like integrating more and more and kind of maybe taking pages out of your book over it?
14:26
[SPEAKER_00]: We fight?
14:27
[SPEAKER_01]: Well, it won't necessarily be the Wi-Fi model, and that's okay.
14:30
[SPEAKER_01]: It did involve modeling.
14:33
[SPEAKER_01]: Since we can create a bespoke financial services company, also utilizing Web3, meaning Walton tokens and rewards where traditional companies will never be able to do that.
14:43
[SPEAKER_01]: Nor will they be able to build from the ground up on top of a blockchain.
14:48
[SPEAKER_01]: So Wi-Fi has the ability to put the line and share of the profits and all the fees that are generated within all the transactions.
14:55
[SPEAKER_01]: back through the token and that token through the user's of the platform.
15:00
[SPEAKER_01]: So I also believe that's the futures these web three bespoke companies where the community, all of the users of your services, are the ones that reap the majority of the rewards.
15:10
[SPEAKER_01]: Not just the utilization or entertainment, if it's an entertainment or if it's banking service, not just utilization.
15:16
[SPEAKER_01]: but the fees a lot of them can be transferred back via a token.
15:21
[SPEAKER_01]: So that's kind of the Wi-Fi model, but more to your question, which is, are the traditional banks going to embrace blockchain technology and move more and more in that direction?
15:31
[SPEAKER_01]: 100%.
15:32
[SPEAKER_01]: They are all doing it as fast and as quickly as they can.
15:37
[SPEAKER_01]: What they're being throttled by is regulation.
15:41
[SPEAKER_01]: Because the big banks have to like obviously follow it to the T and the regulations when there's a little bit of a gray area.
15:48
[SPEAKER_01]: if the administration is open and they feel like, okay, I can step into the gray area and not get in trouble because I know the direction it's going, then they will, and that's the shift with Trump.
15:59
[SPEAKER_01]: Because it's still a gray area, but they know within the U.S. anyways, with Donald Trump in charge, they're okay being experimental and leaning in.
16:08
[SPEAKER_01]: Previous administrations, they wouldn't even come close to the line of the gray area because they would be slapped immediately.
16:16
[SPEAKER_01]: And that shift is why you're hearing this massive momentum towards stablecoins.
16:22
[SPEAKER_01]: Because everyone knows they can now do it and be OK.
16:27
[SPEAKER_00]: So for the listeners out, I mean, you're right.
16:29
[SPEAKER_00]: Thinking about all the different legal lawsuits and battles, I mean, there's more than we can name Coinbase, Kraken, Robinhood, Uniswap, the list goes on, right?
16:39
[SPEAKER_00]: One of them that comes to my mind is the big XRP one, which is something I think a lot of people are familiar with.
16:45
[SPEAKER_00]: what I think people underestimate is the importance of the genius act, the importance of the clarity act, the importance of a lot of the regulation revisions that we're seeing right now because immediately people think of regulation and it's either a, regulations always a bad thing or b, regulation is always a boring thing.
17:04
[SPEAKER_00]: And sometimes it might not be the most exciting, and I think there may be a little bit of truth in that one.
17:09
[SPEAKER_00]: But can you help people understand the magnitude of these?
17:14
[SPEAKER_00]: Because again, they hear the headlines, they see it.
17:16
[SPEAKER_00]: Maybe they go, oh, it's big, and then they kind of brush it off of just, I don't know, like that.
17:22
[SPEAKER_00]: But can you help people understand the magnitude that comes out of these?
17:25
[SPEAKER_00]: Other than just hearing, oh, there's these new acts that could be good for crypto.
17:28
[SPEAKER_00]: It's like no seriously.
17:34
[SPEAKER_01]: looking to operate right well you nailed it earlier you said could you ever imagine a future where you know there's 300 billion of stable coins let alone it's estimated out to be billions right the key driver so that trigger to that tipping point of getting over this okay we made it to a couple you know 100 billion which is incredible but to trillions is regulation
17:59
[SPEAKER_01]: full stop it's regulation.
18:01
[SPEAKER_01]: It is the trillions of dollars that are sitting on the sidelines and for us the sidelines is the traditional financial space that want to get into this world.
18:10
[SPEAKER_01]: That's the trigger's regulation.
18:12
[SPEAKER_00]: Do you think that the clarity act will be that tipping point that can tip us over?
18:17
[SPEAKER_01]: That's right.
18:18
[SPEAKER_01]: It's going to depend on what it says.
18:20
[SPEAKER_01]: Like if it provides the clarity that these large financial institutions are looking for, so they really can start utilizing blockchains.
18:28
[SPEAKER_01]: Yes, but I do believe it's a huge step in the right direction.
18:32
[SPEAKER_01]: And when we do get that clarity, and that's why it's called the Clarity Act, that money will flow into these types of ecosystems.
18:40
[SPEAKER_00]: Yeah, a hundred percent, man, and you know, I want to keep the theme of stable coins talk and keep us on that path before we move on, but I want to get into STVL as well because you founded this in 2024, you've been working on it, walk us through the mission of that and what you've been working on.
19:01
[SPEAKER_01]: Yeah, so since I've been thinking about stablecoins longer than pretty much any human out there, you know, it's this amazing new technology that enables us to move money on chain.
19:12
[SPEAKER_01]: But over the last decade, the things that have really stood out that have slowed the growth is the most amount of bud that you hear around stablecoins, especially around tethers, is it backed?
19:24
[SPEAKER_01]: Where are the reserves?
19:25
[SPEAKER_01]: How do I know it's there?
19:26
[SPEAKER_01]: Where is the audits?
19:28
[SPEAKER_01]: And that kind of holds true for any stablecoin company, because it's hard to audit.
19:32
[SPEAKER_01]: It's all off chain.
19:33
[SPEAKER_01]: You have to trust 10 intermediaries and then auditing companies, etc.
19:38
[SPEAKER_01]: So stable, STBO.
19:40
[SPEAKER_01]: What we have.
19:41
[SPEAKER_01]: invented or created or brought to market is what I call stablecoin 2.0, the evolution of this stablecoin, and there's two real fundamental shifts that we're delivering.
19:53
[SPEAKER_01]: One is all that one solves that problem of where the collateral is, now all of the collateral is on chain.
20:00
[SPEAKER_01]: So instead of all those treasuries that tether holds and the other various collateral that these different companies hold that are off chain and in some other bankers vault that you have to trust and auditor It's all on chain now and so that's part of the RWA narrative all these other companies like black rock has rolled out its tokenized treasuries and there's a bunch of companies that have tokenized treasuries and money market funds and credit offers like all sorts of RWA's traditional assets are being tokenized
20:27
[SPEAKER_01]: Now that they're tokenized, they can be used as collateral for stablecoins.
20:31
[SPEAKER_01]: So what stable does, what STBL does is we allow the mentor to acquire that tokenized treasury, post it as collateral and mint a stablecoin.
20:43
[SPEAKER_01]: But more importantly, it's the fact that we enable and mentor to do this and that we give them the yield.
20:49
[SPEAKER_01]: So the second big issue with traditional stablecoins in these centralized
20:55
[SPEAKER_01]: They go by a treasury, they get 100% at interest of that treasury, and then they issue a token that works on a blockchain.
21:04
[SPEAKER_01]: So that's the second piece.
21:06
[SPEAKER_01]: We're enabling the user, the community, the person who puts the dollar into the system, we give them the yield.
21:15
[SPEAKER_01]: And so what that means is, instead of let's say you have $10,000.
21:19
[SPEAKER_01]: and you want a stable coin instead of buying USDT or USDC and just then using it because you get peer utility.
21:27
[SPEAKER_01]: Now you'll buy USST, which is our stable coin.
21:31
[SPEAKER_01]: But what you'll do is you'll mint it.
21:33
[SPEAKER_01]: You will actually buy a treasury yourself if you want to be the mentor.
21:36
[SPEAKER_01]: You can still use USST just like any other stable coin.
21:41
[SPEAKER_01]: But if you want to mint it and get the yield, you put $10,000
21:46
[SPEAKER_01]: One is the yield.
21:47
[SPEAKER_01]: It's a tokenized income stream from that treasury that you get to keep.
21:52
[SPEAKER_01]: And then you get USST.
21:54
[SPEAKER_01]: So now since you put the $10,000 in, you get the yield and you spend USST just like you spend any other stablecoin.
22:01
[SPEAKER_01]: That's the real key to stablecoin 2.0.
22:04
[SPEAKER_01]: Is the people that put those dollars into the system reap all the rewards?
22:08
[SPEAKER_00]: And that makes sense, right?
22:10
[SPEAKER_00]: It feels like that's kind of the natural way that crypto should gravitate
22:14
[SPEAKER_00]: a world where they user that's doing the creating gets a piece of the pie and that feels like that's the whole story of crypto and with stablecoin let's call it you know stablecoin 1.0
22:28
[SPEAKER_00]: you do this with a group and then the group kind of gets all the reward and like yeah you get your stable coin and that's what you went there to get in the first place but you don't really capitalize any more than that and all the reward really goes to the the parent group that's organizing it all and so this seems I think a bit more enticing to the everyday user right it's much more enticing
22:49
[SPEAKER_01]: And also, it's not a yield-bearing stable coin.
22:52
[SPEAKER_01]: I just want to make that very clear.
22:53
[SPEAKER_01]: Because a yield-bearing stable coin is a security, so that alone creates a lot of friction.
22:58
[SPEAKER_01]: It's not freely traded.
23:00
[SPEAKER_01]: And also, then it's just an investment.
23:02
[SPEAKER_01]: It's a treasure.
23:03
[SPEAKER_01]: You're get 3%, the moment you spend it, you lose the 3%, we bifurcate it, we split the yield.
23:10
[SPEAKER_01]: We allow you to keep the yield after you spend it.
23:14
[SPEAKER_01]: Some people don't grasp that.
23:15
[SPEAKER_01]: They're like, well, how does that work?
23:16
[SPEAKER_01]: Well, think about tether.
23:18
[SPEAKER_01]: They keep the yield while you're spending it.
23:21
[SPEAKER_01]: We allow you to be put in the position of one of these centralized issuers where you keep the yield while you spend it.
23:28
[SPEAKER_01]: So we've created this decentralized platform that empowers everybody.
23:34
[SPEAKER_00]: What are some of the lower risk in higher risk options when it comes to stable coin yields?
23:40
[SPEAKER_01]: Treasuries is the lowest risk, right?
23:44
[SPEAKER_01]: When you say stable coin yield, here's the unique differentiator.
23:48
[SPEAKER_01]: You can buy stable coins, and yield bearing stable coins, and you can buy non-eal bearing stable coins and stake them.
23:55
[SPEAKER_01]: Use them as investment and generate yield, and it depends on where you stake them and how that yield is being generated.
24:00
[SPEAKER_01]: You can get yield bearing stable coins, which is simply treasury return.
24:06
[SPEAKER_01]: But again,
24:07
[SPEAKER_01]: you have to stake it or hold it in order to get the return.
24:10
[SPEAKER_01]: So STBL solves for that.
24:13
[SPEAKER_01]: It gives you the yield and the utility.
24:17
[SPEAKER_00]: You know, one of the things that you mentioned earlier and I want to wrap back around to it was this topic of tokenization and real world assets.
24:24
[SPEAKER_00]: And it's been one of the hottest talking points that we've seen not only just in terms of the crypto space as a whole, but specifically on the podcast.
24:35
[SPEAKER_00]: I mean, it feels like every other guess that we bring on.
24:39
[SPEAKER_00]: is asking us or talking to us about tokenization in real world assets and it doesn't matter if they have a stable coin background, if they're doing smart contracts, if they're doing lending, if they're doing, you know, defy, deep in you name it, like everyone is talking about how they believe tokenization is going to have a role in everything.
25:00
[SPEAKER_00]: And I think it makes sense, like when you truly understand it, it's like, oh, wow, you know, this could seriously unlock trillions of dollars in different assets that were probably previously, even I would say previously illiquid, but it can even unlock a lot of liquid assets to have even more liquidity.
25:16
[SPEAKER_00]: What role do you think that stable coins play in like the lending or the tokenization space?
25:23
[SPEAKER_01]: Well, it's twofold.
25:25
[SPEAKER_01]: One, a lot of these RWA's will be utilized as backing.
25:29
[SPEAKER_01]: And what that means is it just makes the more valuable because in the past, if you wanted to buy some treasuries, okay, you can buy treasuries and get 3% in the future in the world of stablecoin 2.0.
25:41
[SPEAKER_01]: Because I also believe that while we invented this concept and where the first to bring it to market, I think that now, once people really grasp the market, that the person puts the money gets the yield and the collateral's on chain, that is the way stablecoins will evolve too.
25:59
[SPEAKER_01]: In the past, you could hold the treasury.
26:01
[SPEAKER_01]: Now in this new world, now the treasuries are, and other tokens are RWA's or other real world assets are tokenized.
26:09
[SPEAKER_01]: And they're used as backing for stablecoins.
26:12
[SPEAKER_01]: That means you get incremental utility.
26:14
[SPEAKER_01]: And when you get more use cases for an asset, it means the yield goes up.
26:18
[SPEAKER_01]: So in the past you'd hold a treasury and the future you hold a treasury and you get a stable coin that you get to spend.
26:25
[SPEAKER_01]: The moment you spend that, that means you got your principal back.
26:29
[SPEAKER_01]: Back to our $10,000 example, you get the yield, you spend the 10 grand or you sell, you get $10,000 back, and you have the yield for free.
26:38
[SPEAKER_01]: Right?
26:38
[SPEAKER_01]: And so more and more people will be pushing out these stable coins because they want more and more yield.
26:43
[SPEAKER_00]: Do you think that the regulation for the tokenization side will take longer than maybe the stablecoin stuff that we're seeing right now?
26:52
[SPEAKER_00]: Or do you think that they can be packaged together?
26:54
[SPEAKER_01]: They're packaged together, and in some instances, the totalization of traditional assets is much less barriers, a less of a hurdle, and will be easier to regulate.
27:05
[SPEAKER_01]: Because really what they're doing, like stablecoins, while it is beyond on chain, it is a new asset class, and it's taking a lot of value away from banks.
27:15
[SPEAKER_01]: So everyone's trying to stop it and slow it down, because they don't want that value to be removed.
27:20
[SPEAKER_01]: when you're tokenizing our WAs, so other traditional assets, that is you're increasing the pool for distribution.
27:31
[SPEAKER_01]: You're making the usage of those, like you're putting those traditional assets on chain.
27:35
[SPEAKER_01]: Therefore, more people can access them.
27:37
[SPEAKER_01]: Now you have a global audience, instead of a ring fence audience in your country.
27:41
[SPEAKER_01]: You can fractionalize them, so you can do much smaller amounts of, you know, there's no more minimums because the administrative burden is all done programmatically now, it's all done on chain.
27:55
[SPEAKER_01]: And so that's why there won't be as much resistance to the tokenization of those assets as there was to stablecoins.
28:04
[SPEAKER_00]: I think that makes sense.
28:05
[SPEAKER_00]: And we've seen a lot of different groups try to get into this topic of tokenization, right?
28:11
[SPEAKER_00]: It's become a buzzword.
28:12
[SPEAKER_00]: You see the banks talking about it.
28:14
[SPEAKER_00]: You see the asset managers talking about it.
28:16
[SPEAKER_00]: You see groups even like specific crypto projects who previously had no interest in tokenization or stablecoins.
28:23
[SPEAKER_00]: Now come out and say, hey, we're also interested in these things.
28:26
[SPEAKER_00]: I would say part of that is because it's hot and it's flashy in its buzzwords.
28:30
[SPEAKER_00]: I'd say the other half of that.
28:31
[SPEAKER_00]: is probably, it probably has a lot to do with regulation rapidly becoming so much more friendly.
28:39
[SPEAKER_00]: And so, you know, one of the things that I've seen over here is that we have essentially two groups of people.
28:45
[SPEAKER_00]: You have some groups, or I guess one group of people, that think that crypto projects are like,
28:52
[SPEAKER_00]: they can do the tokenization stuff.
28:54
[SPEAKER_00]: They can do these money transfers that we were talking about earlier.
28:57
[SPEAKER_00]: You know, I think the notable side of that is maybe like something like XRP or stellar lumens or something like, oh well this, they should be the ones doing all the transfers in this and that.
29:08
[SPEAKER_00]: And then I think there's another group that thinks,
29:11
[SPEAKER_00]: Oh, all these big people that they would interact with anyway, like all these big banks or companies they're going to do with themselves.
29:18
[SPEAKER_00]: And then I would say that maybe there's a third group, and this is where I want to get your opinion on where people are like, no, like this should be stable coins.
29:24
[SPEAKER_00]: Like the people who understand this stuff should be the ones doing it.
29:27
[SPEAKER_00]: Do you think that it's, and maybe it's not as black as black and white as that?
29:31
[SPEAKER_00]: But do you think that it can be broken down like that?
29:33
[SPEAKER_00]: And how do you kind of view the victor or how this stuff plays out in the end?
29:39
[SPEAKER_00]: because we're not quite, I would say we're not quite in the end game yet, where it's like, oh, there's not like an obvious victor, maybe it's all three, maybe it's a mix, maybe it's not.
29:48
[SPEAKER_01]: Oh, yeah, we're not nearly, we're not even close to the end game.
29:52
[SPEAKER_01]: But here's the thing, we're talking about global finance.
29:55
[SPEAKER_01]: I don't even know what hundreds of trillions of dollars, I don't even know how big global finance is, right?
30:02
[SPEAKER_01]: So there's a lot of capitals, it's a very big big ocean out there.
30:07
[SPEAKER_01]: It's also a free market.
30:10
[SPEAKER_01]: And so you're talking about three distinct groups there like the traditional companies and then kind of blockchain infrastructure companies and stablecoin companies.
30:18
[SPEAKER_01]: They'll all have their own audiences.
30:20
[SPEAKER_01]: They'll all have their own ecosystems.
30:22
[SPEAKER_01]: And every company within those buckets is going to specialize and focus or kind of do something slightly better than the next.
30:30
[SPEAKER_01]: The good news is there's enough audience out there that everyone will attract a decent amount
30:36
[SPEAKER_01]: of market share.
30:38
[SPEAKER_01]: And over time, we'll see who ultimately wins in the end.
30:42
[SPEAKER_01]: But hopefully, it's the consumer that wins in the end.
30:46
[SPEAKER_01]: Hopefully, consumers will be able to say, hey, I want to transact, I want to send $5 to that guy in Mongolia.
30:52
[SPEAKER_01]: And it'll be able to do it like that.
30:54
[SPEAKER_01]: And the beauty is, and the reason why I so firmly believe in this, is we're also on the
31:02
[SPEAKER_01]: Right?
31:02
[SPEAKER_01]: Think about what AI has done today.
31:04
[SPEAKER_01]: Well, what AI is about to do?
31:06
[SPEAKER_01]: It's about to make all this crazy, complex stuff, like blockchain transactions, that everyone's trying to learn and figure out how to do, but the average user, like, this is complicated.
31:18
[SPEAKER_01]: Right?
31:18
[SPEAKER_01]: There's no real solid, easy user interface.
31:20
[SPEAKER_01]: That's where AI comes in.
31:22
[SPEAKER_01]: And then AI isn't going to care which one of those buckets that you laid out wins, they're going to want it.
31:28
[SPEAKER_01]: They're going to care about the quickest, most efficient, most profitable transaction for whoever made the request.
31:35
[SPEAKER_01]: You're going to have your AI agent.
31:36
[SPEAKER_01]: You're going to tell it to do something.
31:38
[SPEAKER_01]: It's going to route that transaction in the most optimized way.
31:44
[SPEAKER_01]: And so they're not going to care what the brand is or what X, Y, and Z is.
31:49
[SPEAKER_01]: As long as it's plugged into an optimized route,
31:53
[SPEAKER_00]: And it makes sense.
31:54
[SPEAKER_00]: I mean, when you look at the free markets, that's the way they work.
31:57
[SPEAKER_00]: Is it saying, hey, let everyone compete.
32:00
[SPEAKER_00]: You can all have different ideas about how you're going to accomplish this end goal and may the best player or players oftentimes, may the best players win?
32:09
[SPEAKER_00]: And you kind of see it a little bit like a seesaw, you know, that can lean one direction at one point in time and as time goes on, it can lean in a different direction and new group can come in and you make a good point, you know, people don't realize quite how large the markets are, I mean, you're talking about the potential of, you're right, I mean, $100 trillion or whatever it is that can be an existence worth of assets and all these things and I think,
32:36
[SPEAKER_00]: Dare I say, that's big enough for a bunch of different groups.
32:39
[SPEAKER_00]: So I'll get a big piece of the pie and I'll still be happy.
32:43
[SPEAKER_00]: And we're all, you know, one of the things that we were just talking about is we're not near the end game yet.
32:48
[SPEAKER_00]: There's so much that can still happen.
32:49
[SPEAKER_00]: There's so much that can still go on.
32:51
[SPEAKER_00]: And the cool thing is that we get to watch all of this innovation happen right in front of our eyes.
32:56
[SPEAKER_00]: And we can make bets accordingly.
32:58
[SPEAKER_00]: So you know, obviously you never financial advice over here, but you can look.
33:02
[SPEAKER_00]: at what's happening.
33:03
[SPEAKER_00]: You can look at some of those different groups.
33:04
[SPEAKER_00]: Maybe there's a fourth group that I just didn't even mention or maybe it's not a group that I hear about, but you can kind of place your bets and say, okay, well, maybe I want to bet on this or that and it can always wax and wane and change.
33:16
[SPEAKER_00]: But the one thing I think that everyone's in agreement if you're not taking anything away from this podcast, take away this, it's that it's clear
33:28
[SPEAKER_00]: One of the most common things that we got on the podcast was people from banks and asset managers and then from the crypto side it was project founders exchanges like Coinbase and Gemini and Robinhood and all these different places saying guys.
33:43
[SPEAKER_00]: We are okay if regulation gets tighter.
33:46
[SPEAKER_00]: We're happy if it gets looser.
33:48
[SPEAKER_00]: We just want it to be clear so that we can do all these different things.
33:52
[SPEAKER_00]: We have a great team.
33:54
[SPEAKER_00]: We can adjust to tighter or looser.
33:56
[SPEAKER_00]: We just need it to be clear so that we can actually act on it.
34:00
[SPEAKER_00]: And that's really what we're seeing here today, Reeve, is that this stuff is becoming more clear.
34:05
[SPEAKER_00]: And...
34:06
[SPEAKER_00]: I would say that with it becoming more clear, that allows for so much more to be done, and it allows for innovation, and that's where it feels like we're just barely scratching the surface, right?
34:17
[SPEAKER_00]: And I would say that's what you're working on.
34:18
[SPEAKER_00]: Like that's the barrier that you're trying to kind of tear down is saying, hey, now that there is clear stuff with what you're doing it at Wi-Fi, with what you're doing with STBL, with what you're doing it, reserve one in all these different groups that you're working so hard
34:37
[SPEAKER_00]: insert some of this innovation and like make it more popular.
34:40
[SPEAKER_01]: 100%.
34:42
[SPEAKER_01]: That's the vision.
34:44
[SPEAKER_00]: So when it comes to I guess all these as we begin to wrap up a little bit here.
34:49
[SPEAKER_00]: What do you view is the the perfect future for what you're doing at both STBL and.
34:56
[SPEAKER_00]: We find what is your perfect future.
34:59
[SPEAKER_01]: It's more.
35:02
[SPEAKER_01]: The regulation coming.
35:05
[SPEAKER_01]: in a manner that doesn't stifle the innovation.
35:09
[SPEAKER_01]: It's more clarity around that, and not just in the United States, but in other countries as well.
35:13
[SPEAKER_01]: So for stablecoins, I'm a firm believer that where the future is going is all ecosystems.
35:19
[SPEAKER_01]: And these are large companies, the organizations, institutions.
35:23
[SPEAKER_01]: They're going to even states and just all these, they're going to issue their and cities.
35:29
[SPEAKER_01]: All these different kind of ecosystems, are going to issue their own currency.
35:35
[SPEAKER_01]: And the reason I say that, it's because it gives them a lot more flexibility, more profit and ability to share, more like incentivize users in that ecosystem.
35:46
[SPEAKER_01]: So there's a lot of incremental benefits that these ecosystems can get when they issue their own currency.
35:52
[SPEAKER_01]: And that's part of our platform is to really provide the technology that makes that turn key.
35:58
[SPEAKER_01]: And so once all these ecosystems have their own currencies, then it's just again better for the participants in the industry because they'll have better transactions speed and clarity and reporting and incentives.
36:13
[SPEAKER_01]: And when they do that, then they'll be thousands of stable coins coming.
36:18
[SPEAKER_01]: But again, those stable coins will be super fungible.
36:20
[SPEAKER_01]: It'll be easier for people to just transact within that ecosystem, take that stable coin and send it somewhere else and instantly swap on the back end.
36:28
[SPEAKER_01]: So when you ask like, what's the perfect conditions for the future?
36:31
[SPEAKER_01]: It's that people aren't afraid of crypto anymore, and that doesn't become crypto.
36:35
[SPEAKER_01]: because all sorts of banking apps are now going to you'll just have you'll see your USD account along your crypto accounts and it's going to start really being seamless and so easy to move whatever type of value that you want to move all within one app and all the complexity will be done on the backend.
36:55
[SPEAKER_00]: So let's spice it up.
36:57
[SPEAKER_00]: Let's say instead of the perfect world scenario, do you have any bold predictions for the future?
37:03
[SPEAKER_00]: You don't know, let's say that we look a couple years out.
37:06
[SPEAKER_00]: Do you have any hot takes or bold predictions?
37:10
[SPEAKER_01]: I mean, people ask, how big is this stable coin market going to be?
37:13
[SPEAKER_01]: And I'm like, it's all money is going to be a stable coin at some point in time.
37:18
[SPEAKER_01]: Because it's just, because what that technically means to me is that money just moves on a blockchain, right?
37:24
[SPEAKER_01]: It's just a new way to move that same type of dollar.
37:27
[SPEAKER_01]: Like you're going to be able to move your dollars really quickly.
37:30
[SPEAKER_00]: Do you fear of a CBDC, which stands for, for the listeners out there, a central bank digital currency, which is, um,
37:38
[SPEAKER_00]: You know, I guess it's it's it's own topic that we probably need to have its own podcast on, but do you fear with that being known that maybe that's a real threat?
37:49
[SPEAKER_01]: So,
37:50
[SPEAKER_01]: There's no technology's technology.
37:53
[SPEAKER_01]: The users are good or bad, right?
37:55
[SPEAKER_01]: So a CBDC, if you're a government, a CBDC is great, right?
38:00
[SPEAKER_01]: You have complete control.
38:02
[SPEAKER_01]: You know exactly where the money's going, you know, who's doing what with it, you have like my new control.
38:06
[SPEAKER_01]: You can freeze an individual's bank account if he walks too close to,
38:10
[SPEAKER_01]: an area you don't want them to go to.
38:12
[SPEAKER_01]: Like, that's the level of control CBDCs can give.
38:15
[SPEAKER_01]: Is that a good thing you're a bad thing?
38:17
[SPEAKER_01]: It's great for a government.
38:18
[SPEAKER_01]: It's horrible for the citizens.
38:20
[SPEAKER_01]: I'm not here to judge what's right or wrong.
38:22
[SPEAKER_01]: I'm just sharing my perspective is that obviously it makes a lot of sense.
38:25
[SPEAKER_01]: The more control a government can have.
38:27
[SPEAKER_01]: But for the citizens, they don't like it for all the obvious reasons.
38:30
[SPEAKER_01]: So in China,
38:32
[SPEAKER_01]: They're probably going to have a CBDC because the government can get away with it.
38:35
[SPEAKER_01]: In the United States, we're not going to have one.
38:37
[SPEAKER_01]: There's already been laws passed saying we won't do it because the government can't get away from it.
38:41
[SPEAKER_01]: And I'll tell you what the government's doing behind the scenes, everything they possibly can do to get that level of control just without calling it a CBDC because they still want that level of control.
38:51
[SPEAKER_01]: This is just the fundamental nature of governments and citizens, right?
38:56
[SPEAKER_01]: They're at odds.
39:02
[SPEAKER_01]: debate you're on.
39:04
[SPEAKER_01]: So I also believe CBDCs are coming in the countries that can issue them.
39:10
[SPEAKER_01]: And and minus the control it will like think about countries like third world countries like countries have terrible infrastructure.
39:21
[SPEAKER_01]: You know everyone used to use this example of Africa before you never had telephone connectivity.
39:27
[SPEAKER_01]: And then the cell phone came out instantly they all have telephone
39:30
[SPEAKER_01]: This is the same.
39:31
[SPEAKER_01]: Most of Africa has very little financial services, and even if they have financial services, the currencies they're dealing with are too much inflation.
39:40
[SPEAKER_01]: There's a part of their not quality.
39:42
[SPEAKER_01]: The blockchain, CBDCs in a box, like a whole blockchain in a box with digital identity, a wallet, currencies, it can upgrade an entire country's infrastructure in 12 months.
39:54
[SPEAKER_01]: Right?
39:54
[SPEAKER_01]: Put it all on chain.
39:55
[SPEAKER_01]: And so those countries, CBDCs are a good thing.
39:58
[SPEAKER_01]: Even if there's extra surveillance, look how much better it's going to be for the quality of life for the citizens.
40:05
[SPEAKER_01]: And so there's just a lot of ways to argue that.
40:09
[SPEAKER_01]: And I think that's one of the biggest promises of blockchain.
40:12
[SPEAKER_01]: is in these emerging markets.
40:14
[SPEAKER_01]: All of us in the United States or in these developed countries, we don't feel the pain as much as the rest of the world who aren't as fortunate.
40:23
[SPEAKER_01]: That's where this technology is super important and impactful.
40:29
[SPEAKER_00]: Yeah, I think you're right and it's easy for people to forget and not even forget but kind of just brush off a lot of the current applications and projects of crypto and say oh well that doesn't apply to me here in America so like what does it matter to anyone else and it's like now we're like
40:44
[SPEAKER_00]: You know, you are at like you are the 1% when it comes to financial access and applications and what you can't even do and all these things and it's a lot of the world works differently and so even though and we always like to remind people that even though you know it might not be something that is applicable to you doesn't mean that it's not applicable or it can't be a use case to potentially millions of other people who just aren't in the same boat because every country has their own regulations, their own laws, their own infrastructure, their
41:12
[SPEAKER_01]: And, you know, you're right, there are countries out there who are perfectly okay doing this stuff, and maybe even the citizens are okay with it as well, and that's a great point that you bring up there, like in the past, you know, most businesses and opportunities are typically ring fence within a country.
41:30
[SPEAKER_01]: And so, it's isn't that country really think about their country, but this technology truly is global in scale, and it's enabling to connect the entire world,
41:39
[SPEAKER_01]: instantly and almost for free with these transactions and so people just think about their country but they have to really think when they're commenting on a technology that absolutely impacts anyone in the world with an internet connection.
41:54
[SPEAKER_00]: Yeah.
41:54
[SPEAKER_00]: Yeah, I think you're spot on, but, you know, myself and my bias approach to this, I hope we don't see one of these, I hope we don't see a CVDC in the States.
42:05
[SPEAKER_00]: I don't know.
42:06
[SPEAKER_00]: Yeah, we won't.
42:07
[SPEAKER_00]: You're right.
42:07
[SPEAKER_00]: There's already rules and stuff that have said we cannot do this, which I think for the United States is a good thing that we do not see that.
42:15
[SPEAKER_00]: I think it would be.
42:17
[SPEAKER_00]: Pretty bad scenario, so, you know, but nonetheless, I mean, listen to everyone.
42:21
[SPEAKER_00]: There's all sorts of cool stuff that is happening.
42:24
[SPEAKER_00]: The crypto space is advancing, uh, reef.
42:27
[SPEAKER_00]: Thank you so much for coming on.
42:28
[SPEAKER_00]: I mean, we got the cover so many different topics and talk about everything.
42:31
[SPEAKER_00]: Where can people find you at?
42:33
[SPEAKER_00]: If they want to follow you specifically, or we fry, or, or, or everything else, S.T.B.L., where can they find you at?
42:42
[SPEAKER_01]: Yep, X is probably the best spot, and we've got Wi-Fi.co, STBL.com, and then the Reeve Cahons on X, so.
42:54
[SPEAKER_00]: Awesome.
42:54
[SPEAKER_00]: Well, Reeve, once again, thank you so much for joining us.
42:57
[SPEAKER_00]: We appreciate your time.
42:59
[SPEAKER_01]: Awesome.
42:59
[SPEAKER_01]: Thank you.