Latest / The Paul Barron Crypto Show / Tether Mass Delistings? + Stablecoin Catalysts Coming!🚨WalletConnect🔥CEO INTERVIEW Jess Houlgrave

Transcript

Tether Mass Delistings? + Stablecoin Catalysts Coming!🚨WalletConnect🔥CEO INTERVIEW Jess Houlgrave · The Paul Barron Crypto Show

• 0:00
  Speaker 1: Today, let's dive into a massive stable coin catalyst and
• 0:03
  Speaker 1: of course get into some of the news that broke
• 0:05
  Speaker 1: over the weekend. We've got a special guest also joining us.
• 0:08
  Speaker 1: Let's just jump right in. Before we get started, though,
• 0:11
  Speaker 1: I do want to thank our sponsor, and that is Tangum,
• 0:13
  Speaker 1: and we're going to be talking to wallet connect today.
• 0:15
  Speaker 1: And when you think about wallet Connect, I want you
• 0:18
  Speaker 1: to think also about self custody and the way you
• 0:21
  Speaker 1: can get into self custody is jump over to Tangum's
• 0:23
  Speaker 1: website and get started. If you're a brand new to crypto,
• 0:26
  Speaker 1: this should be on your checklist to get going.
• 0:28
  Speaker 2: A very easy to set up.
• 0:30
  Speaker 1: One of the most secure ways to really store digital
• 0:33
  Speaker 1: assets out there. No bank or exchange stands between you
• 0:36
  Speaker 1: and your funds, very easy to activate. I can attest
• 0:40
  Speaker 1: to that. In terms of setup. It is seedless by design,
• 0:43
  Speaker 1: so that is another feature that really benefits tangentm users.
• 0:48
  Speaker 1: So make sure and use our link down below. They've
• 0:50
  Speaker 1: got a lot happening in terms of discounts and some
• 0:53
  Speaker 1: cool stuff around the big football event, so check out
• 0:57
  Speaker 1: the code down below.
• 0:58
  Speaker 2: It does help you, guys get started.
• 1:00
  Speaker 1: I want to bring in Jess Holgrave, who is the
• 1:02
  Speaker 1: CEO of wallet Connect and dive in a little bit.
• 1:05
  Speaker 2: How are you, Jess, Hi Paul, I'm very good.
• 1:07
  Speaker 3: Thank you for having me today.
• 1:09
  Speaker 1: We got a chance to report on the MasterCard news
• 1:12
  Speaker 1: last week. Obviously, wallet Connect has been in the news
• 1:16
  Speaker 1: around integration within Jennico and so on. And for those
• 1:20
  Speaker 1: of you who may not know, and Jennico is a
• 1:22
  Speaker 1: big POS company that works with retailers around the world.
• 1:26
  Speaker 1: First of all, give us kind of an un understanding
• 1:29
  Speaker 1: of what that rollout process would look like. When could
• 1:32
  Speaker 1: we use wallet Connect at a retail POS near you.
• 1:37
  Speaker 3: So, wallet Connect has been around since twenty eighteen and
• 1:40
  Speaker 3: we provide this very core infrastructure for the crypto and
• 1:44
  Speaker 3: stable coin industry. One of those applications is on chain payments,
• 1:49
  Speaker 3: and that means that the payment end to end stays
• 1:51
  Speaker 3: on chain. We can off ramp at the back end
• 1:54
  Speaker 3: if a partner wants that. But unlike most of the
• 1:57
  Speaker 3: crypto's solutions, the crypto cards that are there, this is
• 2:00
  Speaker 3: a pure unchain payment in Jeniico for people who don't know,
• 2:03
  Speaker 3: have about forty million merchants globally. They range from petrol
• 2:08
  Speaker 3: stations to luxury goods to hospitality environments and kind of
• 2:12
  Speaker 3: everything in between. And we've been working with them really
• 2:16
  Speaker 3: to refine the user experience around paying with crypto. So
• 2:21
  Speaker 3: we have our first stores going live in Europe this
• 2:25
  Speaker 3: summer really has to test those experiences and make sure
• 2:29
  Speaker 3: that they are working well, and then we'll be rolling
• 2:32
  Speaker 3: that out globally with in Jenico and their acquiring partners
• 2:35
  Speaker 3: after that.
• 2:36
  Speaker 1: All right, I'm looking at a tweet you guys put
• 2:38
  Speaker 1: out stable coins. Part of the day, you guys are
• 2:40
  Speaker 1: using wallet connect right there with your safe poal wallet.
• 2:45
  Speaker 1: And then of course in Jennico as the pos which
• 2:47
  Speaker 1: is the little handheld devices that a lot of times
• 2:50
  Speaker 1: come out to the tables when people are ordering food
• 2:53
  Speaker 1: or maybe you're doing it all sorts of retail environments
• 2:56
  Speaker 1: in general. What about the expansion beyond in Jennico. You've
• 3:01
  Speaker 1: got veriphone obviously, and then packs also in this game,
• 3:05
  Speaker 1: which would pretty much give you guys maximum coverage in
• 3:09
  Speaker 1: terms of retail. Any plans for expanding with those guys?
• 3:13
  Speaker 3: Yeah, Look, I think the point of sale payments landscape
• 3:17
  Speaker 3: is really rapidly evolving, especially in Europe but also around
• 3:22
  Speaker 3: the world to accommodate other payment methods that aren't just cards,
• 3:25
  Speaker 3: and that's historically been what's really dominated that space. So
• 3:30
  Speaker 3: in Europe there's many many manufacturers. Now you're highlighting a
• 3:34
  Speaker 3: couple here. There are some up. There's a lot of them,
• 3:37
  Speaker 3: and often they sort of target different spaces in the
• 3:41
  Speaker 3: market to Some are really brilliant for you know, when
• 3:44
  Speaker 3: you don't have a checkout person there, you know when
• 3:47
  Speaker 3: you're doing that remotely at a gas station for example.
• 3:50
  Speaker 3: Some are designed specifically for restaurants. They've got all this
• 3:53
  Speaker 3: other software built on them. Our goal with wallet connect
• 3:57
  Speaker 3: pay as a product that we build is that this
• 4:00
  Speaker 3: should be really easy for anyone, whether they're the software
• 4:03
  Speaker 3: producer the hardware manufacturer, to incorporate this as a payment method.
• 4:08
  Speaker 3: The great thing about it is it doesn't require somebody
• 4:11
  Speaker 3: to understand very much about crypto. There's nothing in terms
• 4:15
  Speaker 3: of like knowing the chain, knowing the asset, needing to
• 4:20
  Speaker 3: train people in store on what a crypto payment is.
• 4:24
  Speaker 3: You don't have any of that because this works with
• 4:27
  Speaker 3: every wallet on the wallet connect network it's about seven
• 4:29
  Speaker 3: hundred wallets globally. It means that regardless of what wallet
• 4:34
  Speaker 3: that person uses, what asset they have and what chain
• 4:37
  Speaker 3: they're operating on. They'll be able to make that payment
• 4:41
  Speaker 3: without the people in store needing to learn about crypto.
• 4:44
  Speaker 1: All right, So the way I understand it, it's a
• 4:46
  Speaker 1: QR code that gets integrated into the point of sales
• 4:49
  Speaker 1: at right, So just like anybody's QR code that you
• 4:52
  Speaker 1: use with almost anything out there. So let me ask
• 4:55
  Speaker 1: you this because we cover the point of sales sector
• 4:58
  Speaker 1: pretty heavily because we think payment's going to be so
• 5:00
  Speaker 1: huge in crypto. One of the areas that we've been
• 5:03
  Speaker 1: tracking here in the US is around a company by the.
• 5:05
  Speaker 2: Name of Toast.
• 5:06
  Speaker 1: Most companies who go through POS companies like that, they
• 5:11
  Speaker 1: have to integrate through these things that are APIs, and
• 5:16
  Speaker 1: with Toast, what we have found is it's almost impossible
• 5:19
  Speaker 1: to get in and correlate Toast being one of the
• 5:21
  Speaker 1: big companies out there that have kind of spearheaded the
• 5:24
  Speaker 1: iPad version of point of sales being used at most
• 5:28
  Speaker 1: of the US retailers. Are you telling me that API
• 5:32
  Speaker 1: requirements aren't necessary for you to be able to integrate
• 5:35
  Speaker 1: into payments?
• 5:37
  Speaker 3: So we basically offer a holistic back end system and
• 5:42
  Speaker 3: the way that that can be integrated is in multiple
• 5:45
  Speaker 3: different ways. So we have SDKs that can plug into
• 5:49
  Speaker 3: existing software, APKs that can be put on Android devices,
• 5:54
  Speaker 3: people can integrate in a headless way or with APIs.
• 5:58
  Speaker 3: We're working increasingly on on softposts, i e. These methods
• 6:02
  Speaker 3: of accepting payments in store that sit on a mobile
• 6:06
  Speaker 3: phone or an iPad, so you can do that today.
• 6:10
  Speaker 3: We're really agnostic because we see that this space is
• 6:13
  Speaker 3: going to continue to change very dramatically, and I think
• 6:16
  Speaker 3: our core focus and you mentioned the QR code a
• 6:20
  Speaker 3: moment ago, that is a very familiar form factor for
• 6:24
  Speaker 3: payments in some parts of the world, but not in
• 6:26
  Speaker 3: all So if you go to Southeast Asia, you're going
• 6:29
  Speaker 3: to see a QR code almost everywhere with every local
• 6:32
  Speaker 3: payment method to be making a payment. But in Europe,
• 6:35
  Speaker 3: certainly in the US, you know, we've become incredibly comfortable
• 6:40
  Speaker 3: and confident with tapping our phone or with tapping a
• 6:43
  Speaker 3: card at the point of sale, and so one of
• 6:46
  Speaker 3: the things that we're working on in a major way
• 6:49
  Speaker 3: is around tap to pay to make sure that that
• 6:52
  Speaker 3: user experience is familiar for the end user. All of
• 6:56
  Speaker 3: these things also come up with in these very regulated
• 7:00
  Speaker 3: vironments as well. And so everything that we do is
• 7:03
  Speaker 3: with thought to regulation to compliance, both on the in
• 7:07
  Speaker 3: terms of like the hardware and making sure that that's
• 7:09
  Speaker 3: compliant and that we're working with the right partners there,
• 7:12
  Speaker 3: but also just the end to end payment flow. The
• 7:16
  Speaker 3: payments company doesn't need to worry about that in terms
• 7:18
  Speaker 3: of the risk and compliance burden I see.
• 7:21
  Speaker 1: So big news over the weekend Tether is getting delisted
• 7:25
  Speaker 1: in the EU. This of course is all in reference
• 7:27
  Speaker 1: to what's been going on with the MECA regulations that
• 7:30
  Speaker 1: are implementing almost as we speak. So, jess, how would
• 7:34
  Speaker 1: that affect what you guys are dealing with with regulatory
• 7:38
  Speaker 1: compliance around stable coin usage of something like tether in
• 7:43
  Speaker 1: the EU specifically you mentioned a little bit about that.
• 7:46
  Speaker 2: Can you explain.
• 7:48
  Speaker 3: Yeah, So, as a platform, we're chain agnostic and asset agnostic,
• 7:53
  Speaker 3: so that means that the payments partners that we work
• 7:55
  Speaker 3: with can select the array of assets and chains that
• 8:00
  Speaker 3: want to accept payments on. In this case, we haven't
• 8:04
  Speaker 3: quite seen the effects of this yet, but we've had
• 8:06
  Speaker 3: a couple of conversations with partners today. My expectation is
• 8:10
  Speaker 3: that our payments partners in Europe may elect to not
• 8:14
  Speaker 3: accept USDT as a payment method. Now, of course, there
• 8:18
  Speaker 3: are things that we can do from a consumer perspective
• 8:21
  Speaker 3: in terms of unchained swaps and things like that that
• 8:25
  Speaker 3: abstract some of that and may still enable it enable
• 8:30
  Speaker 3: users to use USDT even if the recipient i e.
• 8:34
  Speaker 3: The payments company which is the regulated entity, never touches USDT.
• 8:39
  Speaker 3: All of that is stuff that we're going to have
• 8:41
  Speaker 3: to work through. And I think that what we are
• 8:44
  Speaker 3: seeing though, in is massive change in Europe around euro
• 8:49
  Speaker 3: denominated stable coins. And so although we are at this
• 8:53
  Speaker 3: moment where USDT specifically is not going to be sort
• 8:58
  Speaker 3: of able to be used in Europe, we are seeing
• 9:01
  Speaker 3: this huge growth in euro denominates at stable coins, and
• 9:04
  Speaker 3: I think that's actually going to be the biggest catalyst
• 9:07
  Speaker 3: for a change in terms of the assets that people
• 9:09
  Speaker 3: pay with here, because if you live in Europe, you're
• 9:11
  Speaker 3: getting paid in euros, you think in euros, you're buying
• 9:15
  Speaker 3: goods and services that are denominated in euros. Actually, I
• 9:19
  Speaker 3: think that those euro denominated coins or maybe more specific
• 9:23
  Speaker 3: local currencies Swiss Franks, Swedish Krona, things like this, are
• 9:28
  Speaker 3: actually going to be the biggest driver for change in
• 9:30
  Speaker 3: terms of assets this year.
• 9:32
  Speaker 1: Obviously, this is all happening right now on July first,
• 9:35
  Speaker 1: so we're literally going into this at the same time
• 9:39
  Speaker 1: Circle has secured full com appliance.
• 9:42
  Speaker 2: Which is USDC.
• 9:43
  Speaker 1: So when you think about that, just in your opinion,
• 9:47
  Speaker 1: do you think this will be basically a landslide circle
• 9:51
  Speaker 1: for USDC usage and we'll start to see more implementation
• 9:55
  Speaker 1: of that, or back to your point you're saying that
• 9:58
  Speaker 1: maybe it's the Europeans table coins that could win this battle,
• 10:02
  Speaker 1: how do you think that plays out.
• 10:04
  Speaker 3: Teather is still the predominant stable coin that's in use,
• 10:07
  Speaker 3: particularly across the Middle East, across Asia, and so you know,
• 10:13
  Speaker 3: whilst that's going to have an effect locally in Europe,
• 10:16
  Speaker 3: I don't think that it's going to be a massive
• 10:19
  Speaker 3: driver globally for the downfall of USDT. I think we're
• 10:24
  Speaker 3: certainly going to see uptick in terms of Euro denominated
• 10:28
  Speaker 3: stable coins and other local stable coins. But Tether USDT
• 10:32
  Speaker 3: still is that predominant coin that we see as an
• 10:35
  Speaker 3: asset being used in Asia, in Middle East, and I
• 10:39
  Speaker 3: think Tether is probably, knowing how innovative, they are going
• 10:44
  Speaker 3: to start thinking about other things to do as well.
• 10:47
  Speaker 1: Okay, I was not aware of this, that only one
• 10:50
  Speaker 1: hundred and ninety six projects out there crypto companies that
• 10:53
  Speaker 1: were basically got licensed out of the three thousand companies
• 10:57
  Speaker 1: that were registered in the EU.
• 11:00
  Speaker 2: This is pretty aggressive.
• 11:02
  Speaker 1: Do you think this is going to enable more innovation
• 11:06
  Speaker 1: for the EU or do you think this really gets
• 11:08
  Speaker 1: into a much more regulatory almost defense mechanisms of allowing
• 11:13
  Speaker 1: innovation to make it into the EU because of these
• 11:16
  Speaker 1: compliant requirements.
• 11:18
  Speaker 3: You know, I think when I look at Mika, I
• 11:21
  Speaker 3: think it's certainly not perfect. Rarely does everybody agree that
• 11:24
  Speaker 3: a piece of regulation is perfect. What it has done though,
• 11:28
  Speaker 3: over the last few years is give some clarity to companies,
• 11:31
  Speaker 3: and you know, ultimately most companies want to be compliant
• 11:35
  Speaker 3: if they need to be. They want to have very
• 11:37
  Speaker 3: clear guidelines about what they do and don't need to do.
• 11:40
  Speaker 3: That's I think been one of the reasons that Europe
• 11:43
  Speaker 3: has been actually quite attractive for crypto companies over the
• 11:46
  Speaker 3: last little while. Ultimately, there was a huge long tail
• 11:50
  Speaker 3: of companies that's been established over the last ten years
• 11:53
  Speaker 3: and jurisdictions all around the world which don't meet compliance requirements,
• 11:58
  Speaker 3: and we will see those companies, you know, this purge
• 12:02
  Speaker 3: that that that text or that tweet just mentioned. But
• 12:06
  Speaker 3: actually I think that Europe continues to be very attractive. Specifically,
• 12:11
  Speaker 3: there are some countries in Europe that are doing a
• 12:13
  Speaker 3: lot to attract new business, new crypto companies to come there.
• 12:19
  Speaker 3: And we see the expansion of big US companies into
• 12:21
  Speaker 3: the US into the into Europe like circle, you know,
• 12:26
  Speaker 3: really pushing pushing over here. So I think the Europe
• 12:30
  Speaker 3: is going to continue to be very attractive for crypto companies.
• 12:33
  Speaker 1: So you mentioned that you're working right now toward providing
• 12:39
  Speaker 1: maybe a solution where teather could still be used in
• 12:42
  Speaker 1: a in a scenario where it's not compliant, but maybe
• 12:45
  Speaker 1: the retailer doesn't even know that tether is being used,
• 12:48
  Speaker 1: it's being settled over in a europe European stable coin.
• 12:51
  Speaker 2: Or a USDC.
• 12:53
  Speaker 1: How close are you for that to actually become reality?
• 12:56
  Speaker 2: Are you there now?
• 12:57
  Speaker 3: In terms of wallet can I I think we're have
• 13:00
  Speaker 3: to see. So with wallet connect, we're not regulated. We
• 13:03
  Speaker 3: just provide technology to our partners to facilitate these types
• 13:07
  Speaker 3: of transactions. Today, in most self custodial wallets, there is
• 13:13
  Speaker 3: swap functionality that runs through DeFi i e. It isn't
• 13:18
  Speaker 3: going through a regulated exchange. It's happening purely on chain.
• 13:22
  Speaker 3: So the ability to combine that type of technology as
• 13:26
  Speaker 3: part of a payment's flow is something that we're able
• 13:29
  Speaker 3: to facilitate. So we can enable a DeFi based swap
• 13:33
  Speaker 3: and then a regular payment settlement as part of one transaction. Obviously,
• 13:39
  Speaker 3: that's going to be up to our partners to decide
• 13:43
  Speaker 3: whether or not they can get themselves and their regulators
• 13:46
  Speaker 3: comfortable with that. We spend a lot of time with
• 13:49
  Speaker 3: partners and with regulators around the world trying to help
• 13:52
  Speaker 3: them to understand this, especially when it comes to self
• 13:54
  Speaker 3: custody wallets, which obviously behave slightly differently than many others,
• 13:59
  Speaker 3: but still form the predominant part of our network. So
• 14:03
  Speaker 3: I think we'll have to see the technology is there,
• 14:06
  Speaker 3: it's just whether we can use it in this use
• 14:09
  Speaker 3: case that still needs to be determined.
• 14:12
  Speaker 1: So what is the business model for wallet connect? How
• 14:15
  Speaker 1: do you guys make money? Are their fees attached to
• 14:17
  Speaker 1: these what's the process for you guys to take a
• 14:21
  Speaker 1: cut here?
• 14:22
  Speaker 3: So at the core of wallet connect, we have this
• 14:26
  Speaker 3: open source network that is free for people to join,
• 14:29
  Speaker 3: and that's what hosts our seven hundred plus different wallets
• 14:33
  Speaker 3: and our eighty thousand plus applications that sit on that network.
• 14:39
  Speaker 3: That's really important because it means that that network is
• 14:43
  Speaker 3: somewhere everyone can be. Whether you're a small application or
• 14:46
  Speaker 3: a large application, you can get the benefit of that
• 14:49
  Speaker 3: very wide wallet ecosystem. And that's a service that we're
• 14:52
  Speaker 3: providing really to our wallets and to the ecosystem more broadly.
• 14:57
  Speaker 3: On top of that network, we build specif products for
• 15:01
  Speaker 3: specific use cases. And so while it connect pay is
• 15:04
  Speaker 3: one of those very specific products, it's an acceptance products
• 15:08
  Speaker 3: aimed at payments companies to help them accept crypto payments.
• 15:11
  Speaker 3: That's a product that we charge for. Similarly to some
• 15:15
  Speaker 3: of our other products, we have toolkits that developers can use.
• 15:20
  Speaker 3: We have a series and a suite of products that
• 15:22
  Speaker 3: are commercial that we build on top of that network.
• 15:26
  Speaker 1: Okay, so can you share where the fees start in,
• 15:30
  Speaker 1: how those are integrate or is it a wide array?
• 15:32
  Speaker 2: Depending on the application.
• 15:34
  Speaker 3: Can be can be very very wide. So some of
• 15:37
  Speaker 3: our products look like a SaaS model. They just have
• 15:40
  Speaker 3: a monthly subscription. The one tier starts at seventy nine
• 15:45
  Speaker 3: dollars a month. For example, if you're just building that.
• 15:49
  Speaker 3: If you're at the other end of the spectrum and
• 15:51
  Speaker 3: we're building end to end compliant stable coin payment flows
• 15:56
  Speaker 3: with you, these are highly customized solutions. They're taking in
• 16:00
  Speaker 3: a lot of different components that's priced very differently, sometimes
• 16:04
  Speaker 3: with transaction fees and things like that included in them.
• 16:07
  Speaker 3: So really varies depending on the products that we're talking about.
• 16:11
  Speaker 3: But our goal with payments specifically is to make sure
• 16:15
  Speaker 3: that this can be cheaper than most of the payment
• 16:17
  Speaker 3: methods that are out there today. I think it's really
• 16:21
  Speaker 3: really important. There are stillans hundreds of millions of merchants
• 16:25
  Speaker 3: around there who are operating on very thin margins and
• 16:29
  Speaker 3: they're paying two, three, sometimes five or eight percent for
• 16:32
  Speaker 3: a cross border payment, which really really impacts their bottom line.
• 16:36
  Speaker 3: So as we came into this space to actually build
• 16:40
  Speaker 3: more specific payments products, a big part of our goal
• 16:43
  Speaker 3: there was to lower the cost of payments for merchants
• 16:47
  Speaker 3: and take that two or three percent for a payment
• 16:50
  Speaker 3: down somewhere to twenty thirty, forty fifty basis points depending
• 16:55
  Speaker 3: on the flows and everything that's needed, but to make
• 16:58
  Speaker 3: it very meaningfully cheaper for the merchants that want to
• 17:02
  Speaker 3: use this as an option.
• 17:04
  Speaker 1: Just how does this affect the merchant fees themselves. You're
• 17:08
  Speaker 1: talking about cross border fees right here, but here in
• 17:10
  Speaker 1: the US, well really around the world, you have merchant
• 17:13
  Speaker 1: fees that mostly the major credit card companies extract from
• 17:17
  Speaker 1: any transactions.
• 17:18
  Speaker 2: That go through their network.
• 17:20
  Speaker 1: If you're circumventing that through a wallet connect payment via
• 17:24
  Speaker 1: a QR code and it's integrated into point of sale
• 17:26
  Speaker 1: like in Jennico, or we see more advancements coming, would
• 17:30
  Speaker 1: that give a retailer the ability to maybe reduce their
• 17:34
  Speaker 1: fees overall or do you think there's going to be
• 17:37
  Speaker 1: a scenario where some fees are going to be extracted still.
• 17:40
  Speaker 3: No, That's the goal with wallet connect pay is that
• 17:44
  Speaker 3: because it's fully on chain, we can really compress that
• 17:47
  Speaker 3: pricing and we don't need a visa or a MasterCard
• 17:50
  Speaker 3: to be part of that flow. The transaction effectively will
• 17:53
  Speaker 3: work with any wallet on our network, depending on things
• 17:58
  Speaker 3: like off ramp some of the complet alliance processes, there's
• 18:01
  Speaker 3: variable costs that sit in that, but that's really that
• 18:05
  Speaker 3: like fifty sixty basis points that we can get for
• 18:08
  Speaker 3: a single transaction to accommodate all of the partners in
• 18:12
  Speaker 3: the flow, including for example, the wallets. It's going to
• 18:16
  Speaker 3: bring that cost for the merchant drastically down from where
• 18:19
  Speaker 3: it is today.
• 18:20
  Speaker 1: Yeah, I think for some of our viewers and listeners.
• 18:22
  Speaker 1: I mean, in some cases you've got deals that are
• 18:26
  Speaker 1: sweetheart deals of major retailers like a Walmart or maybe
• 18:29
  Speaker 1: a Starbucks, where they get under one hundred base under
• 18:32
  Speaker 1: one point. But most retailers are in the two to
• 18:37
  Speaker 1: three range in terms of what they pay for merchant services,
• 18:40
  Speaker 1: So this would be significantly cheaper when you consider almost
• 18:44
  Speaker 1: one hundred percent of their sales are now going through
• 18:47
  Speaker 1: some sort of electronic payment right now, whether it's a
• 18:50
  Speaker 1: debit or credit. Very little cash is being used, which
• 18:53
  Speaker 1: reminds me, what about tap to pay? That's very, very
• 18:57
  Speaker 1: highly used here in the United States. I even find
• 19:00
  Speaker 1: myself now trying to find places that use tap to
• 19:03
  Speaker 1: pay more often because there are still a hamp places
• 19:07
  Speaker 1: that don't have tap to pay.
• 19:08
  Speaker 2: But what about tap to pay for you guys?
• 19:11
  Speaker 3: Yeah, it's funny. You know, most of the time I
• 19:14
  Speaker 3: leave my home in Europe now I only ever take
• 19:17
  Speaker 3: my mobile phone with me. I don't even take a
• 19:20
  Speaker 3: card because tap is so predominant here, and I think
• 19:25
  Speaker 3: for us, this is about meeting the consumer where they are.
• 19:29
  Speaker 3: And what I mean by that is consumers around the
• 19:32
  Speaker 3: world are used to different payment forms. Some are used
• 19:35
  Speaker 3: to a QR code, Others like me and now very
• 19:39
  Speaker 3: used to just tapping my phone in order to make
• 19:41
  Speaker 3: that payment. And I think it's really important when we
• 19:44
  Speaker 3: talk about change for consumers, there's a really low barrier
• 19:49
  Speaker 3: for them to get started. This isn't about having to
• 19:52
  Speaker 3: for them learning to go through a new process or
• 19:55
  Speaker 3: do something that's unfamiliar. This has to be really, really
• 19:59
  Speaker 3: easy for them, because otherwise we're going to start to
• 20:02
  Speaker 3: see drop off. People are going to try and do
• 20:04
  Speaker 3: something it's not going to work for them. They're not
• 20:06
  Speaker 3: going to like that. That's even worse for the retailer
• 20:09
  Speaker 3: because that transaction may never go through at all. So
• 20:13
  Speaker 3: closing that gap and I talk often about this chasm
• 20:17
  Speaker 3: between the web two payments experience, which we've all come
• 20:21
  Speaker 3: to find very delightful and easy, and the crypto payments experience,
• 20:26
  Speaker 3: which today is still not there. There are still problems.
• 20:29
  Speaker 3: We're much better as an industry than we were two
• 20:32
  Speaker 3: or three years ago, but there's still a lot of
• 20:35
  Speaker 3: solutions out there in the market where you know, the
• 20:38
  Speaker 3: person behind the counter needs to ask what chain the
• 20:41
  Speaker 3: other person wants to pay with all of these scenarios
• 20:45
  Speaker 3: that add a lot of friction. So our efforts to
• 20:48
  Speaker 3: build things like tap to Pay better QR, making sure
• 20:53
  Speaker 3: that all of the selection points happen in the wallet
• 20:57
  Speaker 3: rather than on the device, making sure things are complay,
• 21:00
  Speaker 3: and every single thing we're doing there is about creating
• 21:03
  Speaker 3: better user experiences, which leads to higher conversion, better attention.
• 21:08
  Speaker 1: What about privacy anybody that's using cash, that's the ultimate
• 21:12
  Speaker 1: privacy token out there, if you want to call it that.
• 21:16
  Speaker 1: But if I look over on how it works with
• 21:18
  Speaker 1: you guys, there is a bit of data that is collected,
• 21:22
  Speaker 1: I guess, but it's mainly for mainly for the transaction.
• 21:25
  Speaker 2: Is that right where it's going to the next person?
• 21:28
  Speaker 3: Yeah, So this example here is a payments that set
• 21:31
  Speaker 3: up under European Travel Rule regulation and everywhere in the
• 21:36
  Speaker 3: world has some variation of what type of information needs
• 21:41
  Speaker 3: to be collected as part of a transaction. That might
• 21:45
  Speaker 3: vary if the transaction is lower than a certain amount.
• 21:48
  Speaker 3: In some countries, you need to collect any information if
• 21:51
  Speaker 3: the transaction is over one thousand dollars in a jurisdiction,
• 21:57
  Speaker 3: maybe they want these three or four pieces of information
• 22:00
  Speaker 3: to be collected in order to make that payment compliant.
• 22:04
  Speaker 3: So our solution enables the regulated party, i e. The
• 22:09
  Speaker 3: payments company that is processing this transaction to collect that
• 22:14
  Speaker 3: information from the end user, again in a very secure way.
• 22:17
  Speaker 3: It's going through encrypted channels, etc. And that is purely
• 22:21
  Speaker 3: being used for compliance purposes to make sure that that
• 22:24
  Speaker 3: payment is legitimate and compliance. Privacy more broadly on blockchains,
• 22:30
  Speaker 3: we know is very challenging because blockchains themselves or most
• 22:34
  Speaker 3: of the blockchains out there, don't support native privacy. You
• 22:38
  Speaker 3: can look up a transaction on chain. There are design
• 22:43
  Speaker 3: elements in our system that help to keep the user's
• 22:48
  Speaker 3: information and the merchants on chain information private. But we're
• 22:53
  Speaker 3: also seeing a lot of developments in the industry in
• 22:55
  Speaker 3: this space. Increasingly, there are privacy chains, privacy solutions that
• 23:00
  Speaker 3: are out there that will be an important part of
• 23:04
  Speaker 3: how crypto payments scale.
• 23:06
  Speaker 1: I think that's going to be one of the critical
• 23:08
  Speaker 1: things that crypto is going to have to get right
• 23:09
  Speaker 1: for scale, is getting into the layer of privacy. Speaking
• 23:14
  Speaker 1: of regulation, that could correlate to this. At least here
• 23:17
  Speaker 1: in the United States, the Clarity Act is now on
• 23:20
  Speaker 1: the verge of either getting through or getting stalled. We
• 23:23
  Speaker 1: don't know just yet, but there are some things that
• 23:25
  Speaker 1: are critical right now. Eleanor is reporting here that it
• 23:29
  Speaker 1: looks like it's logistically impossible.
• 23:31
  Speaker 2: Remember, guys, this has to.
• 23:32
  Speaker 1: Only go through the Senate, And if you look at
• 23:35
  Speaker 1: the dates on this right now, we've got a little
• 23:38
  Speaker 1: bit of time still left before we go into that
• 23:41
  Speaker 1: July fourth target zone, which is what is being looked
• 23:45
  Speaker 1: at the color coding there, just so you know, both
• 23:47
  Speaker 1: chambers in session on yellow Scentate only in session in blue,
• 23:52
  Speaker 1: and then the House only, So you've got a few
• 23:53
  Speaker 1: days here end of June that still would give us
• 23:56
  Speaker 1: a window. Reason I say that, Jess, would this affect you, guys?
• 24:01
  Speaker 1: How would this effect wallet connect if Clarity goes through
• 24:04
  Speaker 1: or doesn't go through?
• 24:05
  Speaker 3: So I think the biggest thing that we're seeing here
• 24:07
  Speaker 3: is clarity literally for our partners, whether that's a payments company,
• 24:13
  Speaker 3: a tokenized equity company, the banks that we work with,
• 24:18
  Speaker 3: all of them are really looking for clarity. They're looking
• 24:23
  Speaker 3: to understand the stable coins, the assets, chains, everything that
• 24:28
  Speaker 3: they can use in order to build these solutions, and
• 24:30
  Speaker 3: many of these institutions have been looking at this space
• 24:34
  Speaker 3: for a very long time. Genius Act obviously provided a
• 24:37
  Speaker 3: huge catalyst for people to take some of those plans
• 24:40
  Speaker 3: off of the shelves and put them into practice, and
• 24:43
  Speaker 3: Clarity will ultimately do the same. I think there's an
• 24:47
  Speaker 3: enormous hope across the industry that this is going to
• 24:50
  Speaker 3: get there in the next couple of weeks, because ultimately
• 24:53
  Speaker 3: that's going to allow everybody to keep innovating with great
• 24:57
  Speaker 3: confidence and ultimately deliver the benefit of this technology like
• 25:02
  Speaker 3: lower cost payments, fastest settlement, or anything else to the
• 25:06
  Speaker 3: people that need it.
• 25:07
  Speaker 1: Do you have an odds bet on this one? Are
• 25:10
  Speaker 1: you leaning more positively on the side of its going
• 25:14
  Speaker 1: through or are you more skeptical.
• 25:15
  Speaker 3: I'm not a batting woman, but I'm going to say
• 25:19
  Speaker 3: I certainly have the optimist in me things it's likely
• 25:23
  Speaker 3: that we get there.
• 25:24
  Speaker 1: All right, there you go, all right, well, Jess, we're
• 25:26
  Speaker 1: going to go to our lightning round with you. Just
• 25:29
  Speaker 1: get some insights on where you think some of this
• 25:31
  Speaker 1: could be going. My first one is kind of a
• 25:34
  Speaker 1: dystopian idea and that is, what if wallet connect failed
• 25:38
  Speaker 1: for a full week? What would that look like for
• 25:40
  Speaker 1: the entire crypto market?
• 25:41
  Speaker 2: Would it collapse? Do you think? Or do you think?
• 25:44
  Speaker 1: I mean, you guys are in everything I know of
• 25:47
  Speaker 1: that I'm out there on crypto with.
• 25:49
  Speaker 3: We certainly touched an awful lot of the market last year.
• 25:52
  Speaker 3: We moved about four hundred billion dollars across institutional and
• 25:57
  Speaker 3: retail use cases. So I think it would be pretty bad.
• 26:02
  Speaker 3: Would it entirely collapse? Hopefully not, but certainly something we
• 26:09
  Speaker 3: work to make sure it isn't going to be the case.
• 26:11
  Speaker 1: Yeah, I think it would be pretty bad too, So
• 26:13
  Speaker 1: I'm with you on that one. While it connect login
• 26:15
  Speaker 1: is more user friendly than the login with Google or
• 26:18
  Speaker 1: even with PayPal.
• 26:19
  Speaker 3: Buttons, I'm going to agree there. And I'm going to
• 26:22
  Speaker 3: agree because we work with the wallet that you already use.
• 26:25
  Speaker 3: You don't need to go setting up new things. We
• 26:28
  Speaker 3: are native in the applications that you already choose.
• 26:31
  Speaker 1: It's lightning fast too, and I like the fact that
• 26:34
  Speaker 1: it doesn't go through a lot of requirements to factor
• 26:37
  Speaker 1: authentication because you've already done that with obviously with the blockchain,
• 26:41
  Speaker 1: so that's much more efficient less than a half a
• 26:44
  Speaker 1: percent fee transactions between merchants, customers, and DApps will never happen.
• 26:49
  Speaker 2: You mentioned though, that you said.
• 26:53
  Speaker 1: It would be around fifty basis points, So you're saying
• 26:57
  Speaker 1: that that's where the fees would jelly land or.
• 26:58
  Speaker 3: No, definitely false. We're going to get it lower than
• 27:01
  Speaker 3: that for sure over time.
• 27:03
  Speaker 2: That okay, very nice, good to hear.
• 27:05
  Speaker 1: Stable coins ultimately a threat to credit cards and debit
• 27:08
  Speaker 1: cards just cards in general.
• 27:10
  Speaker 2: What do you think you know?
• 27:11
  Speaker 3: I sit on the fence there. I think certainly the
• 27:13
  Speaker 3: card companies are having to evolve a lot and change
• 27:16
  Speaker 3: their own business models and the technologies that they are using.
• 27:20
  Speaker 3: But these are very smart organizations, and ultimately I think
• 27:23
  Speaker 3: it's a great sign that they're leaning so heavily into
• 27:26
  Speaker 3: this space.
• 27:27
  Speaker 1: Have you seen the growth on crypto cards over the
• 27:30
  Speaker 1: past six months. It seems like it is literally a
• 27:33
  Speaker 1: bell curve straight up. And these are not credit cards
• 27:36
  Speaker 1: in most cases, they're like a debit card, but they
• 27:37
  Speaker 1: give you access to your full wallet funds. And now
• 27:40
  Speaker 1: they're coming up with all sorts of very innovative ways
• 27:43
  Speaker 1: for you to actually almost have a pseudo credit element
• 27:47
  Speaker 1: tied to this. Do you think that will force the
• 27:49
  Speaker 1: banks to kind of come up with more creative ways
• 27:53
  Speaker 1: to use cards like this.
• 27:54
  Speaker 3: The numbers on staple coin cards are the ultimate indicator
• 27:59
  Speaker 3: that end users want to hold and spend crypto, and
• 28:03
  Speaker 3: that is fantastic. What they don't deliver today is any
• 28:07
  Speaker 3: benefits for those merchants in terms of settlement times and fees.
• 28:12
  Speaker 3: So that's where I think ultimately this is an intermediary
• 28:16
  Speaker 3: measure where over the longer run, as more of the
• 28:19
  Speaker 3: value chain, as more of the stack moves on chain,
• 28:22
  Speaker 3: we can keep the entire payment on chain, get those
• 28:25
  Speaker 3: fees down, get that settlement faster. But the numbers that
• 28:29
  Speaker 3: we see against those cards are great confidence for anybody
• 28:32
  Speaker 3: building in this space.
• 28:34
  Speaker 1: Yeah, I'm surprised we haven't seen major advancements from both
• 28:38
  Speaker 1: Circle tether Packsos, PayPal, you name it, all the stable
• 28:42
  Speaker 1: corn companies out there to really incentivize the retailers to
• 28:46
  Speaker 1: try to do something with these, you know, more efficiently,
• 28:50
  Speaker 1: and this would be one of the gateways.
• 28:51
  Speaker 2: Obviously, with what you guys are doing so.
• 28:53
  Speaker 1: Interesting, merchants will never be able to out incentivize. Speaking
• 28:57
  Speaker 1: of that out incentivized credit card reward words for users
• 29:01
  Speaker 1: they'd rather pocket the extra too.
• 29:03
  Speaker 3: I think false there, and I say that because actually,
• 29:07
  Speaker 3: user incentives are really really important and something that we're
• 29:10
  Speaker 3: working closely on with a bunch of partners. You can
• 29:13
  Speaker 3: imagine a whirlpool where you go to buy your coffee
• 29:16
  Speaker 3: and you get an offer in your wallet that says
• 29:18
  Speaker 3: pay with coin x on chain, Y get an extra
• 29:23
  Speaker 3: three percent cash back. These are really meaningful when it
• 29:26
  Speaker 3: comes to consumer behavior, and they're definitely top of mind
• 29:29
  Speaker 3: for people working in this space at the moment.
• 29:31
  Speaker 2: Hey listen, I would do it. I would.
• 29:33
  Speaker 1: I'd go that route if I could see those kind
• 29:35
  Speaker 1: of cash back rewards, if especially if it gets competitive
• 29:37
  Speaker 1: with something like Amazon, who's been kind of the king
• 29:39
  Speaker 1: of cash back and rewards when it comes to.
• 29:42
  Speaker 2: A credit card.
• 29:43
  Speaker 1: Wallet connect growth is more tied to self custody growth
• 29:46
  Speaker 1: than it is to stable coin growth.
• 29:48
  Speaker 2: Do you agree?
• 29:49
  Speaker 3: I disagree there. The main reason because the wallet connect
• 29:52
  Speaker 3: network is pretty agnostic to what type of custody you use.
• 29:57
  Speaker 3: We have a lot of custodians on the network, a
• 30:00
  Speaker 3: lot more banks and neo banks joining the network. These
• 30:03
  Speaker 3: are entities that are issuing stable coin wallets to their
• 30:06
  Speaker 3: end users. They want to provide that same functionality letting
• 30:09
  Speaker 3: them pay. So really not about the key management, but
• 30:12
  Speaker 3: about the fact that they're holding stable coins.
• 30:14
  Speaker 1: Interesting, Okay, walle connect should launch their own point of sale.
• 30:19
  Speaker 3: We will not be moving into the hardware space anytime soon.
• 30:23
  Speaker 1: I don't blame you. That is a mess. I would say,
• 30:25
  Speaker 1: absolutely not. It is an absolute mess. I totally agree
• 30:29
  Speaker 1: with that one. Wallet Connect became an industry standard before
• 30:32
  Speaker 1: a clear monetization model was established for WCT. Can you
• 30:37
  Speaker 1: explain a little bit more about WCT.
• 30:39
  Speaker 3: Yeah. WCT is our native token for the wallet Connect network.
• 30:44
  Speaker 3: This is used for governance, it's used for incentives. We
• 30:47
  Speaker 3: just talked about cash back actually, and if people are
• 30:49
  Speaker 3: paying with wallet connect pay, they can earn WCT as
• 30:53
  Speaker 3: cash back. We were an industry standard from twenty eighteen
• 30:57
  Speaker 3: when we first started, and the token gives us a
• 31:01
  Speaker 3: lot of a lot of value. It gives us a
• 31:03
  Speaker 3: lot of the ability to try new things, to create
• 31:07
  Speaker 3: new incentive models. But the core of the wallet Connect
• 31:10
  Speaker 3: network is, as it always has been, free for people
• 31:14
  Speaker 3: to use, and that's really where the value sits. So
• 31:17
  Speaker 3: for me, WCT is great. The fact that the industry
• 31:21
  Speaker 3: standard was there before the full monetization model was There
• 31:24
  Speaker 3: is definitely not a problem, and we continue to see
• 31:27
  Speaker 3: a lot of opportunity to use the token to help
• 31:30
  Speaker 3: drive incentives.
• 31:31
  Speaker 2: Let's go into this one right here.
• 31:33
  Speaker 1: Walletconnects addressable market is capped at humans.
• 31:36
  Speaker 2: But what about.
• 31:37
  Speaker 3: Agentic We certainly do. We actually have a wallet connect
• 31:41
  Speaker 3: agentic SDK that allows an agent to use your own
• 31:45
  Speaker 3: crypto wallet. One of the big issues today for agentic
• 31:49
  Speaker 3: payments using stable coins is you've either got to give
• 31:52
  Speaker 3: your private key to an agent, which is pretty risky,
• 31:56
  Speaker 3: or you have to set them up with their own wallets.
• 31:58
  Speaker 3: So then you're going to have twenty five different agent's
• 32:00
  Speaker 3: with twenty five different pockets of stable coins. With the
• 32:03
  Speaker 3: wallet connect Agentic SDK, which is compatible with things like
• 32:07
  Speaker 3: UCP and four oh two, they can use your existing wallet.
• 32:11
  Speaker 3: You can delegate some of those permissions, but you don't
• 32:13
  Speaker 3: need to stop moving funds around or sharing private keys.
• 32:15
  Speaker 1: That'll be nice. How long before that's going to be avail?
• 32:18
  Speaker 1: You say it's available now or coming.
• 32:20
  Speaker 3: Soon, it's available now, you can build with that awesome?
• 32:23
  Speaker 1: Okay, last one right here, How long until you think
• 32:26
  Speaker 1: log into Netflix or Walmart, xbox using wallet connect.
• 32:29
  Speaker 2: What do you think not my lot of time.
• 32:34
  Speaker 3: I hope these two things he usually exclusive because he's
• 32:37
  Speaker 3: going to limit.
• 32:38
  Speaker 2: That is what my crew is telling me.
• 32:40
  Speaker 1: There Paul's He's like, yeah.
• 32:44
  Speaker 3: I guess, I guess for this, I'm going to be optimistic.
• 32:47
  Speaker 3: I'm going to say maybe less than three years.
• 32:49
  Speaker 2: Geez.
• 32:50
  Speaker 1: I'm hoping that it's less than three years now, that's
• 32:54
  Speaker 1: for sure. Listen, Jess, this has been fun. Thank you
• 32:57
  Speaker 1: so much for coming in today. We've learned a lot
• 32:59
  Speaker 1: more about what's happening in the wallet space and really
• 33:02
  Speaker 1: kind of the connection. I think that starts to bridge
• 33:05
  Speaker 1: the gap of crypto and regular people, because this is
• 33:08
  Speaker 1: something that a lot of people are going to be using,
• 33:10
  Speaker 1: whether they know it or not, in the next few years.
• 33:13
  Speaker 2: So thanks for coming in today. We appreciate it.
• 33:15
  Speaker 3: Thank you for having me.
• 33:23
  Speaker 2: If you like this video, like.
• 33:25
  Speaker 1: And subscribe, drop a comment down below, and also join
• 33:28
  Speaker 1: our free private member group.
• 33:29
  Speaker 2: The link is in the description.