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The Missing Link Between Stablecoins and Banks w/ Tony McLaughlin · The Stable Pulse

0:00
Dante Reminick: Passage of the stablecoin legislation drafted by the Senate, dubbed the Genius Act, because analysts say a wave of competition can complicate things.
0:08
Dante Reminick: Everyone, welcome back to Stable Pulse.
0:15
Dante Reminick: We have a special guest here from a company that I think gets thrown around a lot, but in my opinion, very few people understand.
0:23
Dante Reminick: And I want to spend a lot of time today diving into a Tony, your background, also, you know, what sort of led you to found Ubix, but also more importantly, what Ubix is doing today.
0:35
Dante Reminick: Because what you guys are doing is incredibly structurally important, not just for the people who work in stablecoins, but for the general world for the general world who might use stablecoins.
0:47
Dante Reminick: So we're going to dive into everything.
0:49
Dante Reminick: For those who have listened episode after episode, you know that I like to start every single episode with a segment that I call Braggadocious.
0:57
Dante Reminick: Tony, this is an opportunity for you to introduce yourself, for you to tell everyone a little bit about what you are building.
1:04
Dante Reminick: The reason that we call it Braggadocious is because I always find that in intros, people tend to be a little bit too humble.
1:10
Dante Reminick: And I want to throw that out the window.
1:12
Dante Reminick: You have a lot to brag about in your background, and you have a lot to brag about with what you've done with Ubix currently.
1:18
Dante Reminick: So with all that being said, Tony, I'll leave it to you.
1:20
Dante Reminick: Tell us all about yourself.
1:21
Dante Reminick: Tell us all about Ubix.
1:22
Dante Reminick: And again, brag, brag, brag.
1:25
Tony McLaughlin: Hey, Dante, you're really asking me to go against my principles here because you know, in in presentations, that they tell you the first thing you've got to do is credentialize yourself, right?
1:36
Tony McLaughlin: You've got to signal to the audience that you're someone worth listening to.
1:41
Tony McLaughlin: And my thing has always been hey, forget who I am, just listen to the message, just process the message.
1:49
Dante Reminick: But since you asked, I wouldn't have let you get away with that, by the way.
1:54
Dante Reminick: Well, that's that's fine.
1:55
Tony McLaughlin: Well, the sooner we get through this part, the better.
1:58
Tony McLaughlin: But since you asked, uh, I'm Tony.
2:00
Tony McLaughlin: I'm the CEO and founder of Ubix Inc., uh, which is an American company.
2:06
Tony McLaughlin: Uh, I happen to be based in London at the moment.
2:09
Tony McLaughlin: I spent over 30 years in traditional finance.
2:13
Tony McLaughlin: Some of the things that I'm kind of proud about that, apart from making a heck of a lot of money for my for the banks that I worked with over my career, that's probably the biggest thing.
2:23
Tony McLaughlin: I won't talk too much about that in detail.
2:26
Tony McLaughlin: But I I originated something called the Regulated Liability Network, um, which was trial a few times in the US uh in association with the New York Fed Innovation Center and a bunch of banks.
2:40
Tony McLaughlin: It was also trialed in the UK and has now become something called GBTD, Great British Tokenized Deposits.
2:48
Tony McLaughlin: It also was picked up by the BIS and became the Unified Ledger.
2:53
Tony McLaughlin: And I also started something called the BIS IIF project Agora, which is not to be confused with Nick Van Eck's Agora stable coin.
3:06
Tony McLaughlin: Uh, but the project Agora brought together seven central banks and over 40 banks in an interoperable tokenized deposit network.
3:16
Tony McLaughlin: So that was my life in banking, in traditional finance.
3:22
Tony McLaughlin: And then after the US election, I thought the world had fundamentally changed, that banks would have to enter this world of private permissionless blockchains.
3:34
Tony McLaughlin: And I could see that stable coins and tokenized money were going to be a very, very important part of the financial system going forward.
3:42
Tony McLaughlin: So I quit my MD position at Citibank.
3:47
Tony McLaughlin: Uh, I quit on Christmas Eve.
3:50
Tony McLaughlin: Uh, if anyone knows things about uh the bonus cycles of uh banks, I quit a month before my sal my bonus was getting paid, which most people would say is a crazy thing.
4:03
Tony McLaughlin: You should wait to get paid your bonus and then quit.
4:07
Tony McLaughlin: Um, but I was compelled, I was compelled, and uh and it was just meant to be that I would enter into the public blockchain space, the stablecoin space, and try to bring my my payments background to the development of this super exciting method of payment.
4:29
Dante Reminick: I love it.
4:30
Dante Reminick: And how are how are you doing that?
4:31
Dante Reminick: How are you bringing all of your experience and your passion, your excitement into payments today?
4:36
Dante Reminick: Tell us more about Ubix.
4:37
Tony McLaughlin: Okay, so I start from start from the top level, which is you know, there are three there are three worlds that that have to come together.
4:45
Tony McLaughlin: One what or three concentric circles, if you like.
4:48
Tony McLaughlin: One of them is this world of traditional finance that I spent 30 years in.
4:54
Tony McLaughlin: The other one is the world of web three, and the other one is the world of regulation.
4:59
Tony McLaughlin: And what I thought I could do is I could help, I could help create a bigger intersection between these three circles.
5:06
Tony McLaughlin: So I see a merger uh is necessary between the worlds of Web3, TradFi, and regulation.
5:14
Tony McLaughlin: And what that will mean is stable coins and tokenized money and public blockchains will become ubiquitous.
5:23
Tony McLaughlin: So I could also see uh a role that I could play in bridging the gap between Web3 and traditional finance because these two groups of people don't speak the same languages.
5:36
Tony McLaughlin: Um and I and having when I worked in in the bank, I was on the receiving end of lots of pitches from Web3 players.
5:45
Tony McLaughlin: And it was amazing how how bad the pitches were.
5:49
Tony McLaughlin: So the go-to-market of Web3 towards uh TradFi is is less than optimal, let's say that.
5:58
Tony McLaughlin: Um also on the TradFi side, the deficiency is not understanding the meaning of the development of these public permissionless blockchains.
6:06
Tony McLaughlin: And also on the regulation side, there's a great deal of comfort that needs to be given to the regulators that these instruments can be incorporated in a way which is which is safe.
6:18
Tony McLaughlin: So what is what is Ubix?
6:22
Tony McLaughlin: Ubix is bringing an age-old solution to this modern problem that we face in stable coins.
6:29
Tony McLaughlin: What is the modern problem that we face in stable coins?
6:33
Tony McLaughlin: There are going to be many issuers of stable coins and many issuers of tokenized deposits and many issuers of tokenized money market funds.
6:44
Tony McLaughlin: And all of those issuers need there to be acceptance.
6:48
Tony McLaughlin: Acceptance means where can you use these instruments?
6:52
Tony McLaughlin: Now the problem is each individual issuer cannot build their own acceptance network.
6:59
Tony McLaughlin: That doesn't make sense.
7:01
Tony McLaughlin: And everywhere in history, always, whether it's uh checks, ACH, SWIFT, debit cards, credit cards, we've solved this many-to-many problem in the same way.
7:16
Tony McLaughlin: And we've solved it by putting in institutional arrangements, which means that you've got interoperability and a pluralistic competitive marketplace.
7:26
Tony McLaughlin: So UBix is just bringing old wisdom to the new field of stable coins.
7:36
Dante Reminick: What does that look like pragmatically, though?
7:38
Dante Reminick: Does that mean that you guys have partnered with all of these different banks to make sure that they can accept these stable coins?
7:44
Dante Reminick: Does it mean that you guys have a netting mechanism that you do stablecoin interoperability with?
7:50
Dante Reminick: Walk us through how you actually accomplish that goal.
7:54
Dante Reminick: Because it's it's a mighty goal, right?
7:56
Dante Reminick: It's it's necessary for anyone who understands the world of either traditional finance and or the world of sort of stablecoin-based modern finance, or you know, both.
8:06
Dante Reminick: It's a it's a really, really hard thing to accomplish.
8:08
Dante Reminick: And we're going to dive into why it's so hard to accomplish, but I want to hear how you guys are doing that today with UBanks.
8:14
Tony McLaughlin: Yeah, well, well, let's think about what it looks like when we get to the point in space-time when the mission is achieved.
8:22
Tony McLaughlin: What does success look like?
8:25
Tony McLaughlin: What success looks like is you uh log into your bank, and today you see a routing number, and that routing number is an address where you receive traditional types of payments.
8:37
Tony McLaughlin: So success looks like you log into your bank and you see your routing number for traditional payments, and you see a wallet address, and that wallet address enables you to receive tokenized money payments.
8:52
Tony McLaughlin: Now, when we're really successful, you'll be able to receive any kind of tokenized payment into your existing bank or fintech.
9:04
Tony McLaughlin: So the the success criteria is this that every bank and fintech on the planet provide their customers with wallets connected to multiple blockchains.
9:17
Tony McLaughlin: And you can easily receive stable coins, tokenized deposits into your bank account in the same way that you can deposit a check into your bank account.
9:28
Tony McLaughlin: Now, in the US, let's just take the take the example and give the parallel.
9:32
Tony McLaughlin: In the US, you've got 5,000 banks.
9:35
Tony McLaughlin: And let's say Dante you banked with Wells Fargo.
9:37
Tony McLaughlin: So you you think nothing, if I come to you with a check, if I'm buying your car and I come to you with a check from fifth third bank, you don't care about fifth third bank.
9:50
Tony McLaughlin: You don't care about the issuer of the check.
9:52
Tony McLaughlin: So the success criteria for stable coins is when, and this is this is very different from where we are today.
9:59
Tony McLaughlin: The success criteria is when you can receive a stable coin and you don't give a damn about the issuer.
10:07
Tony McLaughlin: That's where we're going.
10:11
Dante Reminick: I love it.
10:12
Dante Reminick: I love it.
10:12
Dante Reminick: And so pragmatically, are you actually moving between stable coins?
10:17
Dante Reminick: Like one thing that we see a lot is you know, people in emerging markets wanting to use a specific stablecoin on a specific chain, and maybe you know, a bank across the world wants to accept a different stablecoin on a different chain.
10:30
Dante Reminick: How do you actually accomplish it where those two parties are able to work together?
10:36
Dante Reminick: Are you moving between various different stable coins and chains and allowing that bank to settle in their preferred stable coin, or are you setting it up in a way where they can actually accept a different type of stable coin?
10:47
Dante Reminick: What does that look like?
10:48
Tony McLaughlin: Okay, so to answer that question, I'm going to root that in something which is uh, again, lots of young people uh in America you still use checks, right?
10:58
Tony McLaughlin: But around the world, generally speaking, lots of people, when I s when I give this check analogy, that they haven't seen a checkbook.
11:05
Tony McLaughlin: They have never they've never used a check.
11:07
Tony McLaughlin: This is outside outside of the US.
11:09
Tony McLaughlin: But let's let's go back to the example that I gave before.
11:12
Tony McLaughlin: So you're uh you're a Wells Fargo customer, and I bring you a check.
11:17
Tony McLaughlin: I'm buying your car and I bring you a check.
11:20
Tony McLaughlin: My bank is fifth third bank.
11:22
Tony McLaughlin: And so I'm giving you a I'm giving you a cashier's check, right?
11:26
Tony McLaughlin: I'm not giving you a personal check because the difference between a personal check and a cashier's check is that a cashier's check is drawn on the bank, right?
11:34
Tony McLaughlin: It's not it's not a risk against Tony, it's a get a risk against fifth third bank.
11:38
Tony McLaughlin: So I'm buying your car.
11:39
Tony McLaughlin: I'm I'm buying your Toyota Corolla.
11:42
Tony McLaughlin: I'm sure you've got a a cool kind of like fintech car.
11:46
Dante Reminick: Uh for is a is a Toyota Corolla a really cool fintech car?
11:50
Dante Reminick: I live in New York City, I don't have any car.
11:52
Tony McLaughlin: Okay.
11:52
Tony McLaughlin: So isn't that what people drive?
11:54
Tony McLaughlin: Isn't that isn't that the humble brag you do?
11:56
Tony McLaughlin: You you're like a billionaire, but you drive a Toyota Corolla.
11:59
Tony McLaughlin: Isn't that like the humble brag?
12:01
Dante Reminick: Maybe.
12:01
Dante Reminick: I'd be happy with just a bicycle, but we can get to that later.
12:04
Dante Reminick: I buy a car.
12:07
Tony McLaughlin: I'm buying your car and giving you a check from Fifth Third Bank.
12:10
Tony McLaughlin: You don't give a damn about Fifth Third Bank.
12:13
Tony McLaughlin: You give that check to your bank, which is Wells Fargo.
12:16
Tony McLaughlin: Now, what does Wells Fargo do with that check?
12:19
Tony McLaughlin: They send it for clearing.
12:22
Tony McLaughlin: They send it for clearing.
12:24
Tony McLaughlin: Now, what what does that mean?
12:25
Tony McLaughlin: Clearing just means sending an instrument back to the issuer for payment.
12:32
Tony McLaughlin: That's all it means.
12:34
Tony McLaughlin: So Wells Fargo take the fifth or check, they send it back to take the fifth order check, they send it back to fifth or bank, fifth or bank pay Wells Fargo, and then Wells Fargo pay you.
12:51
Tony McLaughlin: Now that happens to be a a beautiful transaction, but it's a different transaction than we're used to in the world of stable coins, because stable coins have arisen in a trading mode, meaning these things are bought and sold.
13:08
Tony McLaughlin: And so if there's one thing for your audience really to grasp, is there is a very big difference between trading and clearing.
13:18
Tony McLaughlin: Now trading is if I send you a stablecoin today, Dante, and you take that and you sell it on an exchange, the stablecoin goes into an order book and you get the pri you get the spot price on the order book, right?
13:33
Tony McLaughlin: You you don't necessarily get one-to-one, you get the spot price.
13:36
Tony McLaughlin: Um that's uh fine for many different use cases.
13:42
Tony McLaughlin: But additional to that, there's also another route called clearing, which is I give you a stable coin, you give it to your bank, and your bank gets the money from the issuer.
13:55
Tony McLaughlin: Now, when the bank gets the money from the issuer, they get par value, meaning one for one.
14:02
Tony McLaughlin: And this is super important.
14:03
Tony McLaughlin: This is another part of making stable coins uh good.
14:07
Tony McLaughlin: That stable coins need to become cash equivalents.
14:12
Tony McLaughlin: And that's an accounting standard.
14:14
Tony McLaughlin: Cash equivalence is an accounting standard.
14:16
Tony McLaughlin: The reason why cash equivalence is so important is number one, the central banks care about this thing called singleness of money, which means a dollar is a dollar.
14:26
Tony McLaughlin: Right?
14:27
Tony McLaughlin: Dot a dollar is a dollar is not a natural state of affairs.
14:31
Tony McLaughlin: Because even with banks, Wells Fargo and Fifth Third Bank are different, have got different counterparty risk.
14:40
Tony McLaughlin: So if if a Wells Fargo dollar and a th fifth third dollar, if they traded against each other, they wouldn't trade at par value.
14:49
Tony McLaughlin: But when you have a a check processed between those banks or an ACH processed between those banks, or a wire payment between those banks, they are processed at par value, and that that enforces singleness of money.
15:04
Tony McLaughlin: That enforces a dollar is a dollar.
15:06
Tony McLaughlin: So this is a characteristic that we that we must bring to stablecoins if we want them to be accepted by, for example, large corporates.
15:16
Tony McLaughlin: So there's a there's a host of benefits that come from adding a new lane to the highway.
15:24
Tony McLaughlin: That lane to the, we've we've got trading of stable coins.
15:27
Tony McLaughlin: That's fine.
15:28
Tony McLaughlin: Um, I'm not talking about replacing trading of stable coins.
15:32
Tony McLaughlin: I'm talking about adding a new lane to the highway when anyone who wants to can take a stablecoin to their bank and they get par value.
15:42
Dante Reminick: Do you need to work with the issuers themselves on it?
15:46
Dante Reminick: Right?
15:46
Dante Reminick: USDT, USDC, they're some of the most by far and away the most dominant stable coins in the world right now.
15:52
Dante Reminick: Do you need to work with Tether and work with Circle directly in order to make this happen?
15:58
Tony McLaughlin: Ideally, yes, but in practice, no, because we can source that liquidity through liquidity providers.
16:06
Dante Reminick: On a one-to-one basis?
16:08
Tony McLaughlin: Well, it's possible to do it on a one-to-one basis and have the fees separate.
16:12
Tony McLaughlin: So you can still get one-to-one, but the fees come separately to that.
16:16
Tony McLaughlin: That's possible to achieve.
16:17
Tony McLaughlin: But that's not the ideal solution.
16:19
Tony McLaughlin: You can think of that more as a bridge to the ideal solution.
16:23
Tony McLaughlin: The ideal solution is that the all of the issuers are plugged into the UBIX system, and the receivers are plugged into the UBIX system, and everyone follows the same rule book.
16:35
Tony McLaughlin: And this is this is again in every previous generation of payment technology, whether it's with paper checks or ACH or credit cards or debit cards, it's always the same, it's always the same problem.
16:48
Tony McLaughlin: It's always many-to-many.
16:50
Tony McLaughlin: And that many-to-many problem is always solved in the same way.
16:54
Tony McLaughlin: And so that the many-to-many problem also exists in stablecoins and tokenized money, and it will be solved in the same way.
17:02
Tony McLaughlin: The only question, so so my thesis is correct.
17:05
Tony McLaughlin: The Ubix thesis is correct.
17:09
Tony McLaughlin: The only question is whether Ubix is the one to commercialize it, but that's uh you know, that's up to the gods.
17:16
Dante Reminick: Yeah.
17:16
Dante Reminick: I don't think that's up to the gods, Tony.
17:18
Dante Reminick: I think that's up to you.
17:19
Dante Reminick: And I've seen how hard you and your team work, so I've no doubt that it'll it'll uh come to fruition.
17:23
Dante Reminick: So I just want to to recap on the mechanics to make sure that I understand it and to make sure that our audience understands it.
17:30
Dante Reminick: The the synopsis on Ubix is this.
17:35
Dante Reminick: You guys believe in a world in which there are many different stable coins, banks want to interact with multiple different stable coins at a time.
17:43
Dante Reminick: I agree with that, 100%.
17:45
Dante Reminick: I agree with that future, and I think that it used to be a very contrarian view, and now it's starting to become a little bit less contrarian because, to your point, your thesis is being proven correctly.
17:54
Dante Reminick: The way that Ubix sets this up is you guys work with a lot of banks and enterprises, and we'll get to that in a second, but most importantly, you guys will end up working with every single issuer.
18:05
Dante Reminick: And the way that stablecoins operate today is through what we call a mint and burn mechanism, which is if you want a stablecoin, you move dollars into the issuers or fiat currency into the issuer's bank account, and they give you essentially an on-chain version of that dollar that we call a stablecoin.
18:23
Dante Reminick: And so what you are able to do when you work with multiple issuers is you can say, okay, I'm gonna take this stable coin and I'm gonna essentially move it into an account, and you as the issuer are going to send me the redemption for that, the the dollars for that, which can then be used one-to-one to go and mint a stablecoin that the recipient, the bank, the enterprise, whoever it might be, would want.
18:47
Dante Reminick: Because it's burn and mint, you're able to do that relatively seamlessly because you have this network of issuers.
18:54
Dante Reminick: Am I on the same okay, correct me.
18:58
Tony McLaughlin: Not exactly.
18:59
Tony McLaughlin: So so conceptually, you're you're right that we are integrated with the issuers and we do facilitate these transactions.
19:07
Tony McLaughlin: We don't do it exactly as as you say.
19:12
Tony McLaughlin: And the if you forgive me, Dante, I'll probably not completely open the kimono on our on our inner workings or or on our legal structure.
19:22
Tony McLaughlin: That's part of the secret sauce of of how we do it.
19:25
Tony McLaughlin: But you can just think of it as a you can just think of it as a black as as Ubix as a black box, right?
19:30
Tony McLaughlin: So here's the here's the black box.
19:32
Tony McLaughlin: On this side you've got the issuers, on this side you've got banks and fintechs and exchanges.
19:38
Tony McLaughlin: So what operations do we support?
19:40
Tony McLaughlin: We support uh stablecoin in, fiat out.
19:45
Tony McLaughlin: We support fiat in, stable coin out.
19:48
Tony McLaughlin: We support stable coin A in, stablecoin B out.
19:52
Tony McLaughlin: And by the way, we do all of those things for tokenized deposits as well.
19:56
Tony McLaughlin: Because they're they're when it comes to the redemption mechanics, you can treat them exactly in the same way.
20:03
Tony McLaughlin: So what we're what we're really trying to do is to is to bridge these two worlds, not bridge in the web 3 sense, but we're trying to make a connection between these two worlds.
20:13
Tony McLaughlin: And and and the the reason for that, the reason why it's important for the for the blockchain community, the reason why it's important for the stablecoin community is we want stable coins to be used for every use case.
20:27
Tony McLaughlin: Not just uh crypto and adjacent use cases, but every payments use case we want to make available to stablecoins.
20:37
Tony McLaughlin: And bank acceptance and fintech acceptance is is intrinsic to that mission.
20:42
Tony McLaughlin: It's necessary for that mission.
20:44
Tony McLaughlin: That doesn't mean that people can't have self-custody wallets.
20:47
Tony McLaughlin: That doesn't mean that people can't do their DeFi stuff.
20:50
Tony McLaughlin: And this is additive.
20:52
Tony McLaughlin: It's not taking away from anything that is intrinsic from the from the crypto perspective.
20:57
Tony McLaughlin: The second reason why this is an important mission for the community is if we're successful, every bank and fintech in the world will be connected to multiple public blockchains.
21:09
Tony McLaughlin: Public blockchains.
21:11
Tony McLaughlin: Now I I don't know if you if you pick up on this, Dante, but interest in tokenization has never been higher amongst banks.
21:19
Tony McLaughlin: But if we're not very careful, they will they will they will they will go back down the private permission route.
21:26
Tony McLaughlin: You look at a bunch of the projects out there, they're using private permission ledgers.
21:32
Tony McLaughlin: So if if the if the result of if the result of this interest in tokenization is banks adopting private permissioned ledgers, we haven't won.
21:44
Tony McLaughlin: So our mission is to get banks and fintechs connected to private permissionless ledgers.
21:50
Tony McLaughlin: Um and and and and that's a natural consequence of them connecting into the Ubix network.
21:56
Tony McLaughlin: They must connect into Multiple public permissionless networks in order to be a part of Ubix.
22:10
Dante Reminick: Okay.
22:10
Dante Reminick: Okay.
22:11
Dante Reminick: I think I'm starting to understand.
22:13
Dante Reminick: I want to pivot this conversation a little because there's a a word that you mentioned a few times that I want to go down a rabbit hole here, which is tokenization.
22:21
Dante Reminick: And in particular, tokenized deposits.
22:23
Dante Reminick: Can you explain what the hell those are and why they're so important?
22:28
Tony McLaughlin: Okay.
22:28
Tony McLaughlin: They're, well, first of all, tokenized, I mean, tokenization is just something that stands for something else.
22:35
Tony McLaughlin: So I I always use my uh my AirPods case as my prop.
22:39
Tony McLaughlin: That's always my token, right?
22:42
Tony McLaughlin: I love it.
22:42
Tony McLaughlin: So for tokenized deposits, why are they important?
22:46
Tony McLaughlin: I'll give you, I'll give you the honest answer.
22:48
Tony McLaughlin: They're important because banks want tokenized deposits to be competitive with stable coins.
22:55
Tony McLaughlin: That's why they're important.
22:57
Tony McLaughlin: Why do banks want them to be competitive with stable coins?
23:02
Tony McLaughlin: Because let's say you and your bank, uh, and again, I won't pick on a specific, a specific bank, Dante, but let's say that your mainline bank, um, for whatever reason you want to make a stablecoin payment.
23:16
Tony McLaughlin: So if you if if you're making a stablecoin payment and funding that from your bank account, you're debiting your bank account and then let's say paying away in USDC, then the money leaves the balance sheet of the bank.
23:32
Tony McLaughlin: And the bank doesn't like that because your deposit is their raw material.
23:37
Tony McLaughlin: That's how they make money by lending against your deposits.
23:42
Tony McLaughlin: So anything that that leaches deposits away from the from the bank balance sheet is not something that the banks want.
23:50
Tony McLaughlin: A tokenized deposit is different.
23:53
Tony McLaughlin: A tokenized deposit is a token that represents your money at the bank.
23:58
Tony McLaughlin: Now, if if we're both uh customers of the same bank, let's say that we're both JP Morgan customers, and JP Morgan gives you a JP Morgan coin and you send that to me, the money hasn't left JP Morgan's balance sheet.
24:12
Tony McLaughlin: So from a from a bank perspective, that's good.
24:16
Tony McLaughlin: So tokenized deposits are the bank horse in the race.
24:21
Tony McLaughlin: Banks prefer it because it keeps the money on their balance sheet.
24:26
Tony McLaughlin: But but there's a significant difference between the functionality of tokenized deposits and stable coins.
24:31
Tony McLaughlin: And one of the most significant differences in functionality is that stable coins are not whitelisted instruments.
24:38
Tony McLaughlin: So stable coins, uh, let's let's say that you're you're making a payment to your relative who's gone to who's gone to live in Japan.
24:48
Tony McLaughlin: When you send that stablecoin payment, that uh token can travel to your relative in Japan.
24:54
Tony McLaughlin: And the issuer of the stable coin doesn't know your relative.
25:01
Tony McLaughlin: Right?
25:02
Tony McLaughlin: So so the the stablecoin hasn't been whitelisted.
25:05
Tony McLaughlin: The issuer doesn't need to know your relative.
25:08
Tony McLaughlin: But for a tokenized deposit, at the moment they're fundamentally whitelisted instruments.
25:14
Tony McLaughlin: So if you're sending me a JP Morgan coin, Dante, then JP Morgan needs to know who I am.
25:21
Tony McLaughlin: And in in today's world, I would need to be a JP Morgan customer.
25:26
Tony McLaughlin: Now the banks are working super hard on making tokenized deposits interoperable, which means that in the future, they want it to be the case that I can be a Citibank customer and you can send me a JP Morgan tokenized deposit.
25:42
Tony McLaughlin: But that's not the way they work at the moment.
25:44
Tony McLaughlin: So stable coins are much more, let's say, free in terms of where they can be sent to than tokenized deposits today.
25:51
Dante Reminick: I was talking to someone earlier about this, and I think that the mental model that really stuck with me is tokenized deposits are really, really awesome for bank-to-bank value transfer.
26:02
Dante Reminick: And then stable coins sort of act as the best and most efficient first and last mile uh extension of that.
26:11
Dante Reminick: Right?
26:11
Dante Reminick: So an individual might use an individual user might hold stablecoin A, stablecoin B, and then once they deposit it, it becomes, you know, it sort of adds to the tokenized deposit.
26:22
Dante Reminick: An individual user will never hold, you know, to your point, a tokenized deposit of JP Morgan Chase.
26:28
Dante Reminick: Uh an individual user will never hold a Wells Fargo tokenized deposit, but they will hold stable coins.
26:33
Dante Reminick: And so they're they're not competitive against each other.
26:37
Dante Reminick: They're two very, very important parts of the same value flow within the same ecosystem.
26:42
Dante Reminick: Is that is that fair?
26:45
Tony McLaughlin: There are lots of subtleties to add to it.
26:48
Tony McLaughlin: Um, one subtlety is in the main, stable coins live on public networks.
26:54
Tony McLaughlin: In the main, tokenized deposits live on private networks.
26:58
Tony McLaughlin: Um stable coins, again, are not whitelisted.
27:01
Tony McLaughlin: Tokenized deposits are whitelisted.
27:03
Tony McLaughlin: Tokenized deposits are unambiguously cash equivalents.
27:08
Tony McLaughlin: They really are cash because they're bank instruments.
27:11
Tony McLaughlin: Stablecoins are still struggling to reach cash equivalents from an accounting perspective.
27:16
Tony McLaughlin: Um the one one use case which is interesting for tokenized deposits is the use case that I spent 30 years in, which is corporate cash management.
27:26
Tony McLaughlin: So corporate cash management is a big US multinational moving money between its 100 different subsidiaries.
27:33
Tony McLaughlin: Now, the reason why tokenized deposits is interesting there is because they're FDIC and they're FDIC insured, they pay interest, their cash equivalents, but also the this is something very, very important, counterparty risk.
27:46
Tony McLaughlin: Right?
27:47
Tony McLaughlin: So if you are a large multinational, you've probably got $100 million of counterparty risk against the GCB bank.
27:55
Tony McLaughlin: You may not have $100 million of counterparty risk against uh a stablecoin issuer at this at this particular moment in time.
28:02
Tony McLaughlin: So I think your your general analysis is correct, which is it's going to be horses for courses.
28:07
Tony McLaughlin: Um, and and both of them will play a part.
28:11
Tony McLaughlin: Um, but one thing I I would very much like to see is uh a greater um, let's say, courage from the banks to start putting the tokenized deposits onto public chains.
28:24
Tony McLaughlin: Um, the next thing that the banks need to do to make tokenized deposits truly competitive with stable coins is uh trust the KYC of third parties.
28:37
Tony McLaughlin: So in again, in today's world, uh JP Morgan coin can be held by JP Morgan customers.
28:46
Tony McLaughlin: But to make that useful, it will have to become the case that JP Morgan coin can be held by non-JP Morgan customers, maybe by Citibank customers or Wells Fargo customers.
28:59
Tony McLaughlin: Those things have to be made interoperable.
29:01
Tony McLaughlin: Otherwise, uh tokenized deposits won't be competitive with stable coins.
29:08
Dante Reminick: You mentioned that it's very difficult right now for stable coins to maintain cash equivalency.
29:15
Dante Reminick: Can you tell us a little bit more about that?
29:18
Tony McLaughlin: Yeah, sure.
29:18
Tony McLaughlin: Because the the natural the natural market price of any IOU is related to the counterparty risk against the issuer.
29:28
Tony McLaughlin: So let me just let me just talk about that, even in the world of uh not not stable coins, but just uh pieces of paper, right?
29:38
Tony McLaughlin: So imagine um you gave me $10 and I wrote on a piece of paper, I owe the bearer of this piece of paper $10 payable on demand.
29:50
Tony McLaughlin: So I give you that piece of paper and I've got your $10, and the $10 is in my pocket, right?
29:56
Tony McLaughlin: The $10 is in my pocket.
29:58
Tony McLaughlin: So here's what you can do with that IOU.
30:02
Tony McLaughlin: So you've received an IOU, right?
30:04
Tony McLaughlin: You've got this piece of paper in your hand.
30:06
Tony McLaughlin: You can come back to me and you can say, hey Tony, give me back my $10.
30:11
Tony McLaughlin: Now, in that in that transaction, it's quite likely that you get your $10 back, isn't it?
30:17
Tony McLaughlin: So this is a little bit like going back to the stablecoin issuer directly and getting the money directly from the stablecoin issuer.
30:26
Tony McLaughlin: But then think about this.
30:28
Tony McLaughlin: Let's say that you walk out of your room and you walk down the street and you say, Oh my god, I really need money to buy a coffee.
30:35
Tony McLaughlin: And the only thing that you have in your pocket is the IOU from Tony.
30:41
Tony McLaughlin: So you've imagine you walk in, you walk into Starbucks and you say, Hey, random, random girl, I want to buy a coffee, I've got no money, but I've got this IOU from Tony.
30:52
Tony McLaughlin: It's for 10 bucks.
30:54
Tony McLaughlin: And if you give that IOU to Tony, he's going to give you 10 bucks.
30:57
Tony McLaughlin: Now, how much is that girl going to give you for that IOU?
31:01
Dante Reminick: Hopefully $10, but probably not.
31:04
Tony McLaughlin: Well, why should why would she give you $10?
31:06
Tony McLaughlin: She if she's a rational actor, she will evaluate the counterparty risk of the issuer, and she will give you a discount, which is reflective of the counterparty risk.
31:18
Tony McLaughlin: So if she's a rational actor, she will give you less than $10.
31:22
Tony McLaughlin: Right?
31:23
Tony McLaughlin: Now she go on.
31:26
Dante Reminick: What do you think it will take in stablecoin land?
31:29
Dante Reminick: And I this is one of your concentric circles, the regulation.
31:32
Dante Reminick: Right.
31:32
Dante Reminick: To make the barista trust the Tony IOU and actually enable, you know uh stablecoin redemption at $1, which obviously is the first step towards uh singleness of money and dollar ubiquity, which you mentioned before.
31:55
Tony McLaughlin: Exactly.
31:55
Tony McLaughlin: So so if that barista, if that barista knows that she can give the IOU to her existing bank or fintech and get 10 bucks, then you are then she'll take it from you.
32:09
Tony McLaughlin: Right?
32:11
Tony McLaughlin: That's the that's the that's the condition.
32:14
Tony McLaughlin: So the can the condition necessary for cash equivalence from an accounting perspective is that the instrument with a very, very high degree of confidence can be redeemed at par value on demand.
32:27
Tony McLaughlin: Now, here's a here's a here's a very strange way in which checks are superior to stable coins.
32:37
Tony McLaughlin: So you this is a this is it maybe a bizarre claim, but it's it's nonetheless true.
32:43
Tony McLaughlin: So a check is just that piece of paper which says I promise to pay.
32:49
Tony McLaughlin: Right?
32:49
Tony McLaughlin: Again, I'm buying your car, I'm giving you uh a cashier's check from Fifth Third Bank, you're a customer of Wells Fargo Bank.
32:57
Tony McLaughlin: If I if I give you that check, there are actually three ways to redeem.
33:03
Tony McLaughlin: You might say there are three off ramps.
33:06
Tony McLaughlin: In stablecoin parlance, there are three off ramps for the check.
33:09
Tony McLaughlin: What are the three off-ramps?
33:11
Tony McLaughlin: Number one is you can actually take that check back to fifth third and ask for the money.
33:18
Tony McLaughlin: Right?
33:19
Tony McLaughlin: That's like going back, that's like having a circle mint account.
33:22
Tony McLaughlin: You take the instrument back to the issuer and you say, give me my money.
33:26
Tony McLaughlin: So that's that's route number one.
33:28
Tony McLaughlin: The second route with that check is you can sell it.
33:33
Tony McLaughlin: So you know that these uh I think you still have them in America.
33:36
Tony McLaughlin: You know the places where you can take your payroll check during the week.
33:40
Tony McLaughlin: And when you take your payroll check to one of those places, they don't give you full value, right?
33:46
Tony McLaughlin: They give you a discount.
33:47
Dante Reminick: Yeah.
33:48
Tony McLaughlin: So a payday loan.
33:49
Tony McLaughlin: A payday a payday loan.
33:50
Tony McLaughlin: So so essentially what's happening there is you are you are discounting the you're selling the check for a discount.
33:57
Tony McLaughlin: So this is this is like taking your stable coin and selling it on an exchange.
34:02
Tony McLaughlin: You're selling it into an order book.
34:05
Tony McLaughlin: So these two things you can also do with a check.
34:08
Tony McLaughlin: These two things you can do with a stable coin.
34:10
Tony McLaughlin: But the third thing you can do with a check you can't do with a stablecoin, which is you can take that check to your bank and get par value.
34:21
Tony McLaughlin: You cannot take a stable coin to your bank and get par value.
34:25
Tony McLaughlin: So stable coins in that respect, in that off-ramping respect, are inferior to checks.
34:33
Tony McLaughlin: Now I think that's ridiculous.
34:36
Tony McLaughlin: I think that's nonsensical.
34:39
Tony McLaughlin: Now here here's the here's the thing.
34:41
Tony McLaughlin: Do market participants want an oligopoly in stable coins or a pluralistic competitive marketplace?
34:50
Tony McLaughlin: So if you want a if you if like me you want a pluralistic marketplace at stablecoins with many issuers, not just dollar coins, but coins from many currencies, then here's what you do: you enable banks and fintechs to receive stable coins.
35:08
Tony McLaughlin: Because let's think about how that levels the playing field, Dante.
35:14
Tony McLaughlin: It means that your stable coin from whoever the issuer is can be accepted.
35:21
Tony McLaughlin: Why why is there an oligopoly today?
35:25
Tony McLaughlin: Because the acceptance network doesn't exist for the other coins.
35:32
Tony McLaughlin: That's why there's a barrier to it.
35:36
Tony McLaughlin: That's why every other stable coin struggles to gain traction because acceptance doesn't exist.
35:44
Tony McLaughlin: And acceptance should not be proprietary.
35:48
Tony McLaughlin: So if you're a stablecoin issuer and you pay, you have to go around and pay every exchange millions of dollars to get a listing, then you're building it a moat.
35:59
Tony McLaughlin: Can every issuer pay millions of dollars to every exchange to get acceptance?
36:05
Tony McLaughlin: No.
36:06
Tony McLaughlin: So then the conclusion is that the acceptance network has to be common across issuers.
36:12
Tony McLaughlin: Once the acceptance network is common across issuers, anyone can be an issuer.
36:18
Tony McLaughlin: And that's when we get to a competitive market structure.
36:21
Tony McLaughlin: So that's what needs to happen.
36:24
Tony McLaughlin: And the I I you know, because I hope this analogy of the checks stick, I say this in in many markets.
36:33
Tony McLaughlin: There are six words that lead to an efficient market structure for stable coins.
36:37
Tony McLaughlin: And those six words are banks can process stable coins like checks.
36:43
Tony McLaughlin: Those are the six words.
36:46
Tony McLaughlin: And it's gonna happen, Dante.
36:49
Tony McLaughlin: I'm I I don't know.
36:50
Tony McLaughlin: It's a bit like the Elon Musk predictions of self-driving car.
36:54
Tony McLaughlin: It's gonna happen in 18 months.
36:57
Tony McLaughlin: I agree.
36:59
Dante Reminick: I agree.
37:00
Dante Reminick: I think it's funny, and I'm actually very interested to get your take on this.
37:04
Dante Reminick: Is I am sitting in the US, and right now the US is undergoing a lot of very, very intense stablecoin regulation.
37:12
Dante Reminick: And you see sort of the stablecoin industry really, really pushing for just, in my opinion, what's very, very basic clarifications, some might even call it clarity, on regulations around stablecoins.
37:26
Dante Reminick: But you also have this opposing force in the US, which is coming from the banking lobby and you know, regional banks and community banks.
37:34
Dante Reminick: And their fear is, and this is something I believe to be unfounded, is that stable coins will actually uproot their business model and cause a lot of damage to that very delicate ecosystem.
37:46
Dante Reminick: Now, I view stable coins as a tool, as a tool that anyone can realistically use.
37:51
Dante Reminick: And same thing with tokenized deposits.
37:53
Dante Reminick: But you come from a very you come from a lot more banking expertise than I do.
37:58
Dante Reminick: So I'm very curious how you view the relationship between banks, both you know, large multinational banks and smaller, more local regional banks, their relationship with stable coins and tokenized deposits.
38:13
Tony McLaughlin: Yeah, these are these are great questions and and thorny questions, but I think it deserves to go back to first principles, which is uh where's the land of the free?
38:23
Tony McLaughlin: What's the uh what's the home of capitalism?
38:26
Tony McLaughlin: What's the shining beacon of capitalism for the planet?
38:29
Tony McLaughlin: What is capitalism if it's not com if it's not competition?
38:32
Tony McLaughlin: If you've got a choice to make, then you should tend towards uh competition.
38:37
Tony McLaughlin: Now, having said having said that, there has been a long uh, let's say, bias against what you might call nar narrow banking.
38:48
Tony McLaughlin: So is it a good state of affairs if all of the depos if all of your deposits end up in treasuries?
38:58
Tony McLaughlin: Is that a good state of affairs?
39:01
Tony McLaughlin: I mean, is is that cap is that capitalism if all of your deposits end up in government debt?
39:08
Tony McLaughlin: That's probably not capitalism.
39:10
Tony McLaughlin: So banks play a fundamental economic a fundamental economic function in capitalist economies, which is they create risk assets.
39:26
Tony McLaughlin: I mean, look you're uh you're in New York, right?
39:28
Tony McLaughlin: Look out look out the wind go to the highest tower and look out.
39:33
Tony McLaughlin: Everything that you can see that was paid for was bought on credit.
39:39
Tony McLaughlin: There is nothing you can see from the highest tower in New York, which is paid for in cash.
39:46
Tony McLaughlin: Everything is built on credit.
39:49
Tony McLaughlin: So we don't want everyone's deposits to fuck to be to go into government debt.
39:57
Tony McLaughlin: We do want banks to be able to lend to on to entrepreneurs.
40:02
Tony McLaughlin: So a balance does have to be uh does have to be struck.
40:06
Tony McLaughlin: But on the market, I mean the the the conversation in the US is such a uh a polarized conversation.
40:13
Tony McLaughlin: Can you pay interest, yes or no?
40:15
Tony McLaughlin: This is very, very black and white.
40:17
Tony McLaughlin: Um, you know, other instruments are going to come up which will pay interest, there'll be tokenized money market funds.
40:23
Tony McLaughlin: Uh tokenized money market funds, I think, offer great promise to give yield to people who are not getting sufficient yield at the moment.
40:30
Tony McLaughlin: So I would I I would like market forces to take their course, their natural course.
40:38
Tony McLaughlin: I'd like them to be free to take their natural course.
40:41
Tony McLaughlin: But it would be a bizarre outcome if the stablecoin revolution led to all the deposits in America being backed by US treasuries, which again is government debt, which is government debt.
40:54
Tony McLaughlin: So look, the world the world is made up of balance sheets, right?
40:59
Tony McLaughlin: This is the fundamental reality.
41:00
Tony McLaughlin: There's the government balance sheet, then there are bank balance sheets, then there are corporate balance sheets, then there are individual balance sheets.
41:08
Tony McLaughlin: It's a stack of balance sheets.
41:10
Tony McLaughlin: It's a stack of deposits and a stack of it's a it's a stack of of assets and assets and liabilities.
41:16
Tony McLaughlin: Where those assets and liabilities sit is very influential on the economy.
41:23
Tony McLaughlin: But is there is there room to compete again to compete more against the banks for deposits?
41:28
Tony McLaughlin: You're damn right there is.
41:30
Tony McLaughlin: Of course there is.
41:33
Dante Reminick: Yeah, I think you're goddamn right, Tony.
41:35
Dante Reminick: I love it.
41:36
Dante Reminick: And I'm I'm gonna make sure to flip that and and you know throw it on everywhere I can.
41:41
Dante Reminick: I think that you know, to your point, and I recognize I'm a broken record here, is that stable coins and tokenized deposits are a tool.
41:49
Dante Reminick: And that tool serves customers.
41:52
Dante Reminick: And as a financial institution, your job should be to provide the most amount of value to your customers.
41:59
Dante Reminick: And in a capitalist world, everyone is competing to provide the most value, the person who provides the most value wins in a purely capitalistic world, right?
42:06
Dante Reminick: Obviously, there's regulation that needs to be involved, that it's rapidly, rapidly developing as we speak, but to treat stable coins, a fundamental innovation in the way in which money moves and is accumulated, as the enemy, I think is shooting an entire system in the foot and doing a disservice to users, whether these be you know retail consumers or businesses, rather than recognizing what's right in front of you, which is the opportunity to take the the existing system that you've run on for 50 years and radically improve it.
42:40
Dante Reminick: And you know, no small part to folks like you uh for making that happen.
42:45
Tony McLaughlin: Dante, the change is coming anyway, because you can't you can't stop the the revolution which is which is coming.
42:51
Tony McLaughlin: Um because once you look, I'm a lot older than you, and I've seen multiple waves of technology, and it always it always looks like the thing that you've got can't can't change.
43:05
Tony McLaughlin: Like I I remember when I had my Nokia feature phone, and I I I can specifically remember thinking, I cannot believe that I cannot imagine a better phone than this Nok than this Nokia.
43:17
Tony McLaughlin: Was it the brick one?
43:19
Tony McLaughlin: It was, you know, the one in The Matrix uh where you clicked it in the flick down.
43:25
Tony McLaughlin: That was the one after I mean the these phones were um as good as you can imagine that they were possibly going to be.
43:32
Tony McLaughlin: And then in 2004, I got my first BlackBerry.
43:35
Tony McLaughlin: And I couldn't imagine you know, Blackberry used to be called Crackberry because people were so addicted to them.
43:40
Tony McLaughlin: They couldn't believe how good it was.
43:42
Tony McLaughlin: And then iPhone comes along.
43:44
Tony McLaughlin: So it always looks like things can't change, but the I'm afraid the forces of technology are more powerful than vested interests.
43:54
Tony McLaughlin: So um banks and fintechs, here's what here's what's gonna happen.
43:59
Tony McLaughlin: Fintechs, a lot of them at the moment are saying to themselves, what's my digital asset strategy?
44:05
Tony McLaughlin: The foundation of any bank digital asset strategy is to provide wallets to their customers.
44:13
Tony McLaughlin: Now, let's just play this forward, right?
44:15
Tony McLaughlin: You've got a bank account, but what you haven't got is a wallet from your bank.
44:21
Tony McLaughlin: Now, let's think about this then.
44:23
Tony McLaughlin: You've got your Bank of America bank account and your Bank of America wallet.
44:28
Tony McLaughlin: I'm talking like three years from now.
44:31
Tony McLaughlin: So what can you hold in your Bank of America bank account?
44:36
Tony McLaughlin: Just dollars.
44:37
Tony McLaughlin: Just dollars from Bank of America.
44:40
Tony McLaughlin: What can you hold in your Bank of America wallet?
44:43
Tony McLaughlin: Well, you can hold tokenized deposits, you can hold stable coins, you can hold tokenized money market funds, you can have tokenized stocks, you can have tokenized bonds, you can have cryptocurrency, you can have Bitcoin, Ethereum, you can have whatever you like.
44:55
Tony McLaughlin: So when those two things are compared to each other, which which infrastructure is going to be the place that the innovation takes place?
45:05
Tony McLaughlin: The innovation, once the cat is out of the bag, once you give the general purpose technology a chance, it subsumes the special purpose technology.
45:16
Tony McLaughlin: And that is a is a confident prediction that the the the locus of innovation is going to move to the wallet and it's going to move to the chain.
45:29
Tony McLaughlin: Because just like the iPhone, it's a more general purpose technology than what came before it.
45:37
Tony McLaughlin: The general purpose technology subsumes what came before it.
45:41
Tony McLaughlin: So this force cannot be put back in the bank.
45:46
Dante Reminick: Yeah, I love it.
45:48
Dante Reminick: I love it.
45:49
Tony McLaughlin: And now one caveat one caveat to that is if we leave banks to their own devices, then what they will do is they'll come up with bank-centric solutions and they will tend to keep play it safe and stay on and stay on private permission chains.
46:08
Tony McLaughlin: And this is a trap.
46:10
Tony McLaughlin: This is a dead end.
46:11
Tony McLaughlin: So I think one part of advocacy from from uh from our community should be to get banks onto public chains.
46:21
Tony McLaughlin: Um last week we we published an article with the help of 17 chains, and it was called banks should validate public blockchains.
46:30
Tony McLaughlin: So there, you know, the the banks are scared about moving onto public chains.
46:35
Tony McLaughlin: They don't know whether they'll be held responsible for bad things that happen on public chains.
46:42
Tony McLaughlin: Um the the the key example that people always come up with is well, if I'm on Ethereum and then I pass I pay gas fees to the North Koreans, will I be um fined by the by the OCC?
46:55
Tony McLaughlin: But the truth of it is that the banks not being on the public chains is making the public chains less safe than they otherwise would be.
47:04
Tony McLaughlin: So the the the re the revolution is not just tokenization, it's public chain.
47:10
Tony McLaughlin: It's not it's not getting every bank onto private chain.
47:13
Tony McLaughlin: That's not what the game is.
47:14
Tony McLaughlin: That's been tried over and over and over for the past 10 years and it hasn't scaled.
47:20
Tony McLaughlin: The revolution is public chain.
47:22
Tony McLaughlin: And the banks haven't got the message yet.
47:27
Dante Reminick: What is that message, Tony?
47:28
Dante Reminick: You talk to banks all day, every day.
47:30
Dante Reminick: When you try to convince them to work with Ubix, what message do you do you send them?
47:35
Tony McLaughlin: Well, I I don't I don't start by talking to to to uh about Ubix because that's not the first discussion with with a bank.
47:43
Tony McLaughlin: The first discussion with a bank is this.
47:47
Tony McLaughlin: And you have to meet you have this is the part of the problem of the go-to-market from from crypto and from chain into bank, is what which we don't recognize how to meet the bank where they are.
47:58
Tony McLaughlin: So the first thing that I say to a bank is uh is as follows.
48:02
Tony McLaughlin: And if we just role-play this, right?
48:05
Tony McLaughlin: So if you're a bank executive, I say, Dante, do you think that tokenization is a thing?
48:10
Tony McLaughlin: And most bank executives will say, yes, you know, tokenization is definitely a thing.
48:15
Tony McLaughlin: And then I will say, Dante, do you know which chain will win or which token will win?
48:22
Tony McLaughlin: And they say, No, I've got no idea which chain will win or token will win.
48:26
Tony McLaughlin: So then I say, What is the what is the what is the no-regret investment that you can make that equips you for a future of tokenization and hedges your bets against there being lots of different tokens and lots of different chains.
48:42
Tony McLaughlin: And that fundamental investment is in wallet infrastructure.
48:46
Tony McLaughlin: So the first thing the first thing for Web3 to sell to a bank is the notion that the bank is future-proofed once they have wallets.
49:01
Tony McLaughlin: They've got accounts, but they need to be able to provide wallets.
49:06
Tony McLaughlin: Now, are we is the first thing, and this is again another mistake that the chains make when they go to the bank, when the chain goes to the bank, they say, I'm the best chain.
49:16
Tony McLaughlin: You must choose my chain.
49:18
Tony McLaughlin: And so that pres that what that does is it gives a computation to the bank that takes too long to solve because the banks don't want to try to pick a winner.
49:28
Tony McLaughlin: So the the correct thing to say to a bank is forget about you're not picking a chain at the moment, but your wallet infrastructure needs to be able to connect to any chain.
49:38
Tony McLaughlin: Now, the minute a bank has a wallet infrastructure and it can the minute the Bank of America can give Dante a wallet connected to any chain, Bank of America is future-proof.
49:50
Tony McLaughlin: And that's the starting line.
49:53
Tony McLaughlin: Now we can get into discussion about what's the best chain for the best use case.
50:00
Tony McLaughlin: But the first thing for the banks to do is not to start issuing tokens.
50:05
Tony McLaughlin: The best thing for the banks to do is to start receiving tokens.
50:10
Tony McLaughlin: So let's think about that community bank you mentioned, Dante.
50:13
Tony McLaughlin: That community bank is afraid of stable coins leaching balances off their balance sheet.
50:19
Tony McLaughlin: So, what's the best thing for a community bank to do?
50:22
Tony McLaughlin: Get a wallet infrastructure, give wallets to your customers, and enable your customers to receive stable coins.
50:30
Tony McLaughlin: This is money coming into your balance sheet.
50:33
Tony McLaughlin: This is something you like.
50:34
Tony McLaughlin: You'll like money coming into your balance sheet.
50:37
Tony McLaughlin: So the first thing to sell to a bank is get a wallet infrastructure that connects to any chain.
50:43
Tony McLaughlin: The second thing to sell to a bank is receive stable coins, not issue stable coins.
50:49
Tony McLaughlin: And then we're off to the races because I hope you can see once the bank has the wallet infrastructure, every other use case is available to them.
51:00
Tony McLaughlin: Whether that's buy, sell, hold, crypto, or issuing tokens or whatever.
51:06
Tony McLaughlin: But this is what I mean by go to market.
51:09
Tony McLaughlin: This is what I mean by meeting the banks where they are.
51:12
Tony McLaughlin: Um, I'm a big fan of Wolf of Wall Street.
51:15
Tony McLaughlin: I'm I'm sure you've what you've watched that that movie many, many times, right?
51:19
Tony McLaughlin: So when it comes down to sell me on Web3, we have to start in the right place.
51:27
Tony McLaughlin: And we have to close.
51:30
Tony McLaughlin: And there are there are thousands of banks on this planet, thousands of fintechs on this planet, and we have to get them on the on the path to merging with Web3.
51:40
Tony McLaughlin: And the go-to-market of that has to be prosecuted in a specific order.
51:46
Tony McLaughlin: It um it it is it's um because I've been on the other side of it, I've seen the ineffective go-to-market from Web3 to TroudFi.
51:56
Tony McLaughlin: So, yeah.
51:58
Tony McLaughlin: Sell me a Web3 strategy.
52:00
Tony McLaughlin: I've given the uh hopefully I've given an outline to the industry of how to go about doing that.
52:06
Tony McLaughlin: First call it, second, receive.
52:09
Dante Reminick: I love it.
52:10
Dante Reminick: I love it.
52:11
Dante Reminick: I think that this is an excellent message to end on, especially for anyone who is a banker or working in a bank or trying to sell two bankers or someone in a bank.
52:21
Dante Reminick: Um, that is a really, really excellent message.
52:23
Dante Reminick: So, Tony, I very, very much appreciate you coming on.
52:26
Dante Reminick: If you are an enterprise that's looking to get involved in stable coins, if you are a bank or a financial institution looking to get involved in stable coins or tokenized deposits, I highly recommend that you learn more about Tony, learn more about UBIX and what they're doing, because it really is really incredible.
52:44
Dante Reminick: Um keep keep tuning in to the show.
52:47
Dante Reminick: We're gonna keep really amazing guests coming on, and uh as always, stay stable.