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Stablecoins Become Real Money When the Rails Actually Work · The Stable Pulse

• 0:00
  Intro: Passage of the stable coin legislation drafted by the Senate, dubbed the Genie Senate, because analysts say a wave of competition can complicate things.
• 0:13
  Dante Reminick: David, welcome to the podcast.
• 0:15
  Dante Reminick: I'm very, very, very excited to have you on.
• 0:18
  Dante Reminick: We always start off these stable pulse episodes with a section that I like to call braggadocious, which is you know a chance for you to introduce yourself, to brag a little bit.
• 0:29
  Dante Reminick: And you have a a pretty rich history in terms of what you've done.
• 0:34
  Dante Reminick: So I want you to just introduce yourself, talk about what you're building, and do not be humble in any way, shape, or form.
• 0:41
  David Marcus: I mean, it's it's it's pretty hard for me to be braggy.
• 0:44
  David Marcus: Uh that that's not how I'm wired.
• 0:45
  David Marcus: But I can brag before I'm the co-founder and CEO of LightSpark.
• 0:49
  David Marcus: Uh previously I was at Meta, uh, tried and failed to launch this Libra thing, uh, which was like an you know, uh probably too early for its time.
• 0:59
  David Marcus: Stablecoin and blockchain network, uh, maybe also from the wrong place at the wrong time.
• 1:05
  David Marcus: Uh, we can discuss that or not.
• 1:07
  David Marcus: Uh, and uh previously, before that, I ran messaging and a messenger at uh Meta.
• 1:12
  David Marcus: Uh and before that I ran PayPal, and before that, a bunch of payment startups.
• 1:17
  David Marcus: Uh that, you know, my last startup got acquired by PayPal, then ended up running it for a bit.
• 1:22
  David Marcus: So that's uh that's me in a notch up.
• 1:24
  Dante Reminick: Awesome.
• 1:25
  Dante Reminick: And I encourage our audience to just go and research David Marcus.
• 1:28
  Dante Reminick: David is a really, really good operator and a terrible bragger.
• 1:32
  Dante Reminick: So go and go and do your own research.
• 1:35
  Dante Reminick: Uh David, I wanna start with sort of the why here, because we have a lot to dive into in terms of payments and everything, but I I find that it's always helpful to ground these conversations and why the person is doing what they're doing.
• 1:48
  Dante Reminick: So can you tell us a little bit about why you do what you do?
• 1:52
  Dante Reminick: Like just between uh us all, like you could retire today and be perfectly fine, but you're not.
• 1:57
  Dante Reminick: You're out here building a startup, which is one of the hardest things to do.
• 2:00
  Dante Reminick: Tell us a little bit about why you care.
• 2:03
  Dante Reminick: Not why should others care about what you're doing, but why do you yourself care about this particular thing?
• 2:09
  Dante Reminick: Why you, why this, why now?
• 2:12
  David Marcus: Yeah, look, I mean, I've done this a few times in my career, which is like get like really obsessive about how broken something is, and then uh feel like it's my kind of mission to actually go try to fix it.
• 2:23
  David Marcus: Um and like I tried to steer away from payments for a little bit after PayPal, like, you know, and I had a blast doing that, like just running non-regulated businesses when I was at Facebook building Messenger.
• 2:35
  David Marcus: Uh, it was a lot of fun and it was fast-paced and like, you know, not regulated, which was kind of uh a reprieve from the crazy world of money movement and payments.
• 2:44
  David Marcus: Um, but like that I had lots of hopes and and dreams for PayPal when I was there, uh, then got frustrated with you know the bureaucracy, the whole eBay thing, and all of those things, and and that prompted me to go try something else.
• 2:57
  David Marcus: Um But I was hoping that in my time doing non-payment stuff, like the four years I spent on on messaging, uh, that like someone else would have solved how money moves around the world.
• 3:10
  David Marcus: And during that time, no one did.
• 3:12
  David Marcus: So I'm like, okay, like, you know, I'm at Facebook, like we can actually probably do something that actually can carry the whole world uh with us, uh, meaning like we have enough distribution that we can bring all of the largest companies and banks and financial services players and platforms to actually adopt a platform that we're not going to own.
• 3:32
  David Marcus: We're going to share with the world to make money move in real time.
• 3:35
  David Marcus: Um, but unfortunately, you know, we we did that at a time where the regulatory uh clarity wasn't around.
• 3:44
  David Marcus: Uh the fact that Facebook touched three billion people every month like really was uh was a very scary thought.
• 3:51
  David Marcus: Like someone told me one day and it clicked, which is like you became systemic even before launching.
• 3:56
  David Marcus: Um and uh and so every regulator in the world wanted to kill that thing and successfully did.
• 4:02
  David Marcus: Um and and I think you know, I left with kind of this uh sense of unfinished business uh and uh and a little bit of uh, you know, I need to actually go do this thing because like during that period of time, like everyone else that tried also failed.
• 4:19
  David Marcus: And uh and the state of the world when it comes to when it came to global money movement was still in a pretty bad place.
• 4:26
  David Marcus: So it felt like a good opportunity to go assemble a world-class team around Light Spark and and try to do that.
• 4:32
  David Marcus: Uh and uh and it's been great.
• 4:34
  David Marcus: Like, you know, startups is really where I belong.
• 4:36
  David Marcus: I feel really at home uh in this environment.
• 4:39
  David Marcus: Uh and uh and it's great to build zero to one again, you know, outside without like overhead or or anything.
• 4:45
  David Marcus: And it's it's just been a lot of fun in the last four years building Light Spark.
• 4:49
  Dante Reminick: I love it.
• 4:50
  Dante Reminick: Well, let's let's dive into Light Spark then.
• 4:52
  Dante Reminick: We've talked a lot about sort of your career evolution, but LightSpark has also, as a company, gone through an evolution on its own, right?
• 5:02
  Dante Reminick: Like there's been pretty tremendous change in the company of Light Spark in the last five years.
• 5:07
  Dante Reminick: Tell us a little bit more about Light Spark day one, and then you know, sort of walk us through the evolution there, and then tell us a little bit about Light Spark today.
• 5:15
  David Marcus: Yeah, sure.
• 5:16
  David Marcus: I mean, it's been four years, but uh but uh but yeah.
• 5:21
  David Marcus: Uh I mean, look, we started LightSpark and we had a lot of bruises and a lot of buddies car tissue from the Libra journey, and we decided we needed to build on top of the most unassailable thing ever built, which is Bitcoin when it comes to money movement.
• 5:35
  David Marcus: Um and so, you know, at the time, the only thing that could actually work for real-time money settlement using Bitcoin in the background, like, and bear in mind, like our view was never that people wanted to actually use Bitcoin uh to move money that they use for everyday purchases, uh, but rather that we could use Bitcoin as TCPIP packets to net settle between domestic payment systems that themselves are real-time and and virtually free.
• 6:03
  David Marcus: David, can I enter, can I interrupt here?
• 6:05
  David Marcus: Can you tell us a little bit about what a TCIP packet is?
• 6:07
  David Marcus: A TCPIP packet is basically the the backbone of the internet.
• 6:11
  David Marcus: Like TCPIP is the protocol that actually carries like packets of data uh that enables us to have this conversation over video right now uh or enables like uh websites to exist or or apps.
• 6:24
  David Marcus: It's the transport layer for data on top of the internet.
• 6:28
  David Marcus: And um, and so we're like, okay, like the same way that TCPIP moves packets of data on the internet for information, for everything else, we can use Bitcoin as TCPIP packets, the equivalent of TCPIP packets for value, for money.
• 6:44
  David Marcus: And it turns out no one controls it.
• 6:46
  David Marcus: It turns out it's censorship resistant, it's fully decentralized, et cetera.
• 6:49
  David Marcus: And so, you know, we started on uh building on top of that and on top of lightning and basically connecting domestic payment systems to enable them to be interoperable with something else than Swift and correspondent banking, which was kind of it's still kind of the default.
• 7:03
  David Marcus: Um and and so we started the journey there, and the the thought was okay, we're just going to go talk to banks and we're going to give them the capability to actually move money between them in real time on top of a network that no one owns, and we're going to build the network that way, and it's going to be great, and it's going to be a straight line, it's going to be fantastic.
• 7:22
  David Marcus: Uh and of course, as it goes in payments, it's never like that.
• 7:26
  David Marcus: Like, you know, you actually go and talk to banks, they're excited, but they want to see who else is going to get on the network.
• 7:31
  David Marcus: You have a uh two, two uh uh uh two-sided uh cold start network problem, right?
• 7:38
  David Marcus: Um and so we realized, okay, we're going to have to do this the hard way.
• 7:44
  David Marcus: And instead of actually building the best settlement network in the world and having all the banks come on, we're going to have to go build interoperability with the entire payment systems and banking systems of all the countries in the world that has a real-time payment system, uh, which is virtually every country now.
• 8:00
  David Marcus: Um, and so we started that long road of building redundant connectivity into every single payment system that we could.
• 8:07
  David Marcus: Uh, we're now at 62 countries going on 70 by the end of the year, uh, where we can move money in real time 24-7 at a fraction of the cost of any other network.
• 8:17
  David Marcus: Um and then like stable coins became like really a bigger thing.
• 8:23
  David Marcus: Not, you know, that there's a lot of hype in stablecoin that like I really like didn't love like in the early days of stablecoin.
• 8:30
  David Marcus: It's like everyone comparing the volume of stable coins to Visa's volume, where like the stablecoin volume was just DeFi swaps and nothing to do with payments, right?
• 8:39
  David Marcus: It's like, um, and and so like you know, the real volume of payment last year, like of stablecoin is growing really fast.
• 8:48
  David Marcus: Uh, but I think it's about $400 billion according to best estimates, right?
• 8:53
  David Marcus: Which is like good, it's nice, but like, you know, like you know, JP Morgan Global Money Movement does like an order of magnitude of that every single day, right?
• 9:01
  David Marcus: So we're we still have like ways to go.
• 9:03
  David Marcus: But stablecoin regulatory clarity changed a game uh in a way that enabled uh everyone to actually touch and interact with them and use them.
• 9:12
  David Marcus: Um and so we started building compatibility with every stablecoin, with every stablecoin other network, et cetera, because like we want the network and the balances that are on the network to reach as far and wide as possible.
• 9:24
  David Marcus: And so over the years, we basically build uh a number of different capabilities that live under this platform that we call Grid, LightSpark Grid.
• 9:34
  David Marcus: And basically with LightSpark Grid, you can now reach 62 countries in real time.
• 9:38
  David Marcus: You can do payouts, you can create accounts.
• 9:41
  David Marcus: Uh now, as of uh this uh half, like you can uh issue debit cards, like stablecoin back debit cards with a partnership with Visa that we have.
• 9:51
  David Marcus: Uh, and we're also uh principal members now, like in Europe, uh, of Visa.
• 9:57
  David Marcus: Uh and here in the US, we we work, we announced this week a partnership with Lithic and Lead Bank to actually have uh the program run here in the US.
• 10:05
  David Marcus: So like we we have a set of capabilities when it comes to global money movement that I think are unparalleled at this point, and we can serve banks and financial institutions that are regulated in a really good way to replace like correspondent banking and all the non-real-time batch process, like 50 plus years old, like architecture and infrastructure uh with something real-time and internet era like.
• 10:29
  David Marcus: Um and uh and on top of that, we can enable platforms to create global accounts and and and beam dollars in real time and give people ways to spend that dollars in in ways that are better than any other account in the world.
• 10:42
  David Marcus: So, you know, I mean that's a super long-winded answer, but like, you know, that's kind of the arc of what we built over the last four years.
• 10:49
  Dante Reminick: So, in my view, and you correct me if I'm wrong here, David, like LightSpark started with sort of the development of the Lightning Network.
• 10:57
  Dante Reminick: You guys were initially here to build a blockchain.
• 11:00
  Dante Reminick: It has expanded to far, far, far beyond the settlement layer of payments.
• 11:06
  Dante Reminick: It seems like you guys are trying to verticalize the payment stack in in as many ways as possible.
• 11:12
  Dante Reminick: Can you tell me a little bit more about sort of that pursuit towards integrating with bare metal?
• 11:18
  Dante Reminick: I think that right now, a lot of the people who are listening, they might be neo bank founders and a lot of fintechs today.
• 11:23
  Dante Reminick: The way that they build fintechs is by wrapping this and wrapping that and and wrapping the other thing.
• 11:29
  Dante Reminick: Right?
• 11:29
  Dante Reminick: You guys are taking a very, very different approach.
• 11:31
  Dante Reminick: Can you talk a little bit about that philosophy of going sort of as bare metal as possible when it comes to building out this rail?
• 11:39
  David Marcus: I mean, first of all, like, you know, that there's a lot of naivete if you haven't been in payments and like you go and build a product.
• 11:48
  David Marcus: And so, you know, there's lots of people who think they can just like build a nice self-custodial wallet uh with stable coins and then like give it to people and design it well, and that's it, right?
• 11:59
  David Marcus: And unfortunately, you know, people or businesses using these accounts, they need to use those balances uh for their everyday needs and uh and and and to buy things and you know, whether it's goods or services in the markets and economies that they live in.
• 12:15
  David Marcus: And so if you can't move that balance to your local payment system or your local banking system, if you can't have a card that you can use to actually pay at, you know, in this case, 175 million plus merchants around the world, uh, or go to an ATM and get cash for those purchases that still require cash, uh, if you can't do all of these things and you can't do them really, really well, uh, then you're stuck with uh wallets that has digital money you can't use.
• 12:42
  David Marcus: Um, and no one wants that, right?
• 12:45
  David Marcus: So you have to go and do the work of integrating into the domestic payment systems.
• 12:49
  David Marcus: And it turns out that, like, you know, if if you're if you're relying on third parties and aggregators that only do that, like the vast majority of them fail um miserably at delivering a high quality service because they work with a number of different banks that have different risk appetites, that have different types of API stacks and connectivity and availability time.
• 13:09
  David Marcus: And so lots of payment failures and all of these things.
• 13:11
  David Marcus: And if you want to replace the current payment system, it not only has to be real time and faster, but it has to be as reliable or more reliable in terms of payment success rates than uh existing payment systems.
• 13:24
  David Marcus: And like that requires a tremendous amount of work to have redundant routes into every single domestic payment system to ensure that you can meet local and global regulatory requirements, um, that you do that in the system and hide away all of the complexity behind a beautiful, the beautifully designed API, um, which we take a lot of pride in.
• 13:45
  David Marcus: Like I think, you know, everyone, everyone that we work with, our partners, our clients, uh love our documentation, our API, our agent forward development frameworks that enables you to unleash an agent and build really, really quickly on top of our stack.
• 14:02
  David Marcus: Um, and we take a lot of pride in hiding all of that complexity away.
• 14:06
  David Marcus: It's magic money movement, basically.
• 14:08
  David Marcus: And we're just like, like, don't worry about the sausage making.
• 14:11
  David Marcus: We worry about that, and we eat glass and and do all of those things on on behalf of our partners and our clients so that they can build the best possible apps and services for money movement in the world.
• 14:23
  Dante Reminick: I love that.
• 14:23
  Dante Reminick: I I think you know good technology is indistinguishable from magic.
• 14:27
  Dante Reminick: So I think I jumped the gun a little bit, David.
• 14:29
  Dante Reminick: I I said that you guys were building closer to bare metal.
• 14:32
  Dante Reminick: I want to give an example of that.
• 14:35
  Dante Reminick: So you guys recently went out and acquired IneMI in Europe.
• 14:39
  Dante Reminick: Tell me a little bit more about what that means, how that builds into your philosophy of going bare metal, what that can enable for LightSpark as a as a payment network.
• 14:49
  Dante Reminick: Give me more context and information on that.
• 14:52
  David Marcus: Yeah, for sure.
• 14:52
  David Marcus: Uh so we we bought a company called Striga.
• 14:55
  David Marcus: Uh, it was a YC company uh ran by a fabulous team, like that really build a lot with very little, very scrappy.
• 15:05
  David Marcus: Um, the team like you know, figured out like Europe was kind of the highest leverage thing they could do.
• 15:11
  David Marcus: Uh, they moved to Estonia because it was like they thought the best environment from a regulatory standpoint, cost standpoint, etc., and built there uh from people like you know, Prashant, the the founder of the company, uh never never spent any time there before he moved there.
• 15:28
  David Marcus: Uh and you know, he spent his time in India and in the US and never spent time there and just like moved there, spent like the last like five years there or so, uh, built a team and built a fabulous company.
• 15:41
  David Marcus: I'm a big fan of those guys.
• 15:42
  David Marcus: So we bought the company, we acquired the company, and now the team is is Light Spark Payments Europe, Light Spark Europe.
• 15:50
  David Marcus: And and so they had a VASP license in Europe, which they worked uh with us on upgrading to a CASP and EMI license.
• 15:58
  David Marcus: And that enables us to now not only uh do all of the activities that relate to digital assets in Europe, uh, like you know, stablecoin issuance, transmission, like custody, etc., but also have uh direct access to the SEPA real-time payment networks that cover network that covers 32 countries in the EA zone uh straight through central bank connectivity.
• 16:23
  David Marcus: So it doesn't get closer to the metal than that, like unless you become a central bank yourself.
• 16:28
  David Marcus: Um so so you know that's an example of how we like to do things.
• 16:33
  David Marcus: We like to get as close to the metal as possible.
• 16:36
  David Marcus: Um, and in some cases, we do it differently.
• 16:39
  David Marcus: Like in the US, for instance, like we decided not to apply for an OCC charter, and we can discuss why that is and and rely on really solid bank partnerships to do that and to have connectivity to RTP and FedNow and ACH and um and do that really, really well.
• 16:55
  David Marcus: Uh and we think that's the right decision, but like where wherever we can, we try to get as close to the metal as possible.
• 17:02
  Dante Reminick: I'm curious to get your thoughts on the slew of OCC charters that are being handed out recently.
• 17:07
  Dante Reminick: Obviously, you have Erebor and Augustus who just got awarded their OCC charters.
• 17:12
  Dante Reminick: You have people like Wise who did famously did not get awarded their OCC charters as someone who has been building in payments through of many different political regimes.
• 17:23
  Dante Reminick: You've seen your fair share of regulators going in and out.
• 17:26
  Dante Reminick: What are your thoughts on the current appetite for OCC charters?
• 17:30
  Dante Reminick: Is this a good thing?
• 17:31
  Dante Reminick: How will this play out?
• 17:32
  Dante Reminick: Give me your insight on that.
• 17:34
  David Marcus: Well, yeah, I mean, I'm a bit of a contrarian.
• 17:37
  David Marcus: So when everyone is doing something, I try to like question whether this is like actually the right thing to do or uh or whether like there's something that other people don't see.
• 17:48
  David Marcus: And I I I personally like I've been through so many cycles of craziness, right?
• 17:54
  David Marcus: It's like when I took over at PayPal, uh, this was when the CFPB was like actually uh created, uh, and we had lots of issues with them, and and and I had to go like solve that.
• 18:07
  David Marcus: We had like a regulatory nightmare in Australia with Elstrack, like we had like all kinds of different things that you know we had to deal with.
• 18:13
  David Marcus: And then of course with Libra, I lived like the most high-profile uh like scrutiny uh ever, probably uh from global regulators and central bankers.
• 18:26
  David Marcus: So like I've seen this movie play out in a number of different ways.
• 18:30
  David Marcus: And I think when you see who's getting those licenses right now and how many and the volume, et cetera, um, and you see how politically charged this is becoming, my um expectation is that at some point in time a new administration is going to come in, new leadership at the OCC is going to come in, and they're going to look at all of these licenses, these charters that they've actually awarded to companies, and they're going to be like, wait a minute, like do you really have a business running a bank?
• 19:00
  David Marcus: Do you know really what you're doing?
• 19:02
  David Marcus: Um, and then a lot of them are actually going to be in some sort of penalty box, is my prediction, where you have capped deposits, like you can't launch new products, et cetera.
• 19:12
  David Marcus: And I don't want to put ourselves in that position.
• 19:15
  David Marcus: I feel like you know, we're in the business of money movement, which is really hard.
• 19:19
  David Marcus: Uh, we have MTLs almost everywhere we need to have them.
• 19:22
  David Marcus: Um, and so we can do what we need to do from a payment standpoint at the state level.
• 19:28
  David Marcus: Uh, and we rely on phenomenal banking partners that like have built a really good stack.
• 19:34
  David Marcus: And I think, you know, we want to build this company for the next hundred years, right?
• 19:38
  David Marcus: It's like it has to be around in a hundred years, right?
• 19:40
  David Marcus: And so if we do that in a way that actually doesn't enable a single regulator to actually really throw a wrench into our journey, uh, then uh we're we're going to do that.
• 19:51
  David Marcus: Uh, and and if we can't, we can't.
• 19:53
  David Marcus: But like if there are like in this case alternative paths that enables us to do that without giving uh away uh such uh such leverage, uh, then you know, we'll do it.
• 20:05
  Dante Reminick: You know, it's a it's a really interesting time building in payments because you see people in real time taking those variety, those different paths.
• 20:13
  Dante Reminick: And I think it's gonna be interesting to see how this plays out.
• 20:17
  Dante Reminick: I was talking to a few different lawyers.
• 20:19
  Dante Reminick: One is currently in the process of getting MTLs, another one is a former DFNS lawyer, and they were telling me, like, hey, we're actually specifically not taking the OCC route because the second that you become an OCC chartered bank, it means that they have the purview to hamstring you on your product roadmap.
• 20:37
  Dante Reminick: They have the the purview to go in and and meddle in in your business in a way that I don't think most people realize.
• 20:45
  Dante Reminick: And so while some are gunning for this OCC charter, I think there are a lot of people who are like you who don't, who specifically do not want to go out and get that OCC charter, even though it's easier to get now than it ever has been.
• 20:58
  Dante Reminick: Uh and I I think that the my prediction, I could be wrong, but my prediction is the companies that actually optimize for agility here and who remain dynamic in the face of changing regulation are gonna be the ones that that win.
• 21:14
  Dante Reminick: Um so I I'm glad that you and I are thinking alike there.
• 21:17
  Dante Reminick: But to to the point there, like there's a lot of different people taking a lot of different paths here.
• 21:22
  Dante Reminick: There's a lot of competition, right?
• 21:24
  Dante Reminick: And a lot of it coming very, very quickly, well funded, everything like that.
• 21:29
  Dante Reminick: How do you view competition in this space?
• 21:33
  Dante Reminick: I mean, you're you're a staunch capitalist, you love competition, I know that, but there's a lot of people trying to build out stable coin based payment rails today.
• 21:41
  Dante Reminick: How do you view that landscape?
• 21:42
  Dante Reminick: And how do you view LightSpark as differentiating itself within that landscape?
• 21:47
  David Marcus: Well, first of all, I love to compete.
• 21:48
  David Marcus: Like I think you know, competition makes everything better for everyone and it's fun.
• 21:52
  David Marcus: Um, and so look, I think that the competitive set is getting broader and broader by the day.
• 21:59
  David Marcus: Um, and it's Of interesting because what we want to do here is to really present um an almost like a single API-based integration for our partners that can do all the things that multiple companies can do for them.
• 22:14
  David Marcus: So if you look at like the set of capabilities we have from global money movements, whether it's fiat, it's stable coins, it's other assets, all the way to the edges of local payment trails and local currencies in 62 countries, soon to be 70, soon to be 100 after that.
• 22:31
  David Marcus: Um if you look at the ability for us to issue accounts like self-custodial wallets, like best-in-class self-custodial wallets that don't require seed phrases and private key management and all of that stuff, um, the ability for those accounts to hold a variety of different stable coins across all kinds of different chains, the ability for those accounts to have debit cards, the ability for those accounts to actually move money locally and globally on local and global payment networks in real time, uh, the ability for these platforms to actually earn uh yield and interchange on card swipes, on card transactions and FX and global money movement.
• 23:12
  David Marcus: Uh and uh and you look at all of these capabilities, if you want to build that today uh across like competitors, you have to assemble a bunch of different companies or capabilities together and stitch them together.
• 23:26
  David Marcus: And and so that you don't have a single, you know, you don't you don't have a uh one-stop shop that you can go to with a super like well-designed API and and and documentation and easy to build surface that enables you to do that in that many countries in with one partnership with one stack.
• 23:45
  David Marcus: Like it just doesn't exist, right?
• 23:46
  David Marcus: I mean, you can you can partner with a bunch of other players that can do that for you, but like then you have to stitch all of the logic together and stitch all of the things together, and then you have like different billing capabilities, like different billing and feeds of of funds that are coming in that you have to reconcile on your end, etc.
• 24:04
  David Marcus: So I think we have the best platform in the world right now.
• 24:08
  David Marcus: I I I honestly I would not say that.
• 24:11
  David Marcus: I would have not said said that like six months ago or nine months ago.
• 24:14
  David Marcus: Nine months ago or six months ago, we're playing catch up on a number of dimensions.
• 24:17
  David Marcus: Uh like in terms of the if you look at the capabilities of every single one of those companies, the way that they provide them.
• 24:24
  David Marcus: Like you have a bunch of companies doing stable coin back cards as the only thing they do.
• 24:28
  David Marcus: Um, and like, you know, we weren't there.
• 24:31
  David Marcus: Now we are.
• 24:32
  David Marcus: Uh so there's a number of dimensions like that that I think we weren't uh best in class at each of these things like six, nine months from now, uh like six, nine months ago.
• 24:41
  David Marcus: Uh, but I feel really good about us being best in class across all of these dimensions uh at the moment.
• 24:47
  David Marcus: And I think that makes a difference when companies choose who to work with.
• 24:50
  Dante Reminick: Yeah.
• 24:51
  Dante Reminick: I I've studied the history of your career a bit, David, and it seems like the the through line throughout your entire career has been that you want to build open, neutral, global payment rails, which I love, by the way.
• 25:04
  Dante Reminick: You started LightSpark as sort of a technology within the Lightning Network, which was very, very Bitcoin aligned, you did so for neutrality.
• 25:13
  Dante Reminick: Fast forward four years, you're now working with a variety of different blockchains, a variety of different stable coins, a variety of different rails.
• 25:21
  Dante Reminick: Can you talk to me a little bit about how you go about still balancing that mission of open and neutral with the you know the existing payment rails that go beyond Bitcoin today?
• 25:34
  David Marcus: Yeah.
• 25:34
  David Marcus: Yeah, for sure.
• 25:35
  David Marcus: I mean, you know, uh I had this moment where I think spiritual spiritually we're very aligned, like in in the way that we think about the long-term end state of the world with companies like Block, for instance, that you know have built like a superb product with Cash App and continue to want to build on top of Bitcoin for the same reasons we started building on Bitcoin.
• 25:57
  David Marcus: Uh and there's a moment in time where Cash App basically started saying, wait a minute, like you know, stable coins have a use case, they have regulatory clarity, we want to enable that.
• 26:08
  David Marcus: And um, and we're going to do USDC on top of Solana as a way to start doing that.
• 26:13
  David Marcus: And I'm like, what what why do you do that on Solana?
• 26:17
  David Marcus: At first, I was like, why don't you just use Spark?
• 26:20
  David Marcus: Which which arguably at the time, Spark is our settlement network on top of Bitcoin, that basically we built, purpose-built for stablecoin settlements when we realized that Lightning wasn't going to cut it for that.
• 26:32
  David Marcus: Um and and of course, at the time, Spark wasn't mature to the level of Solana, clearly.
• 26:38
  David Marcus: Uh, and uh, and I was like, why are they doing that?
• 26:42
  David Marcus: And then I realized like they're talking about stable coins in the same way that they talk about the domestic payment system, which is like you have fiat rails, and basically stablecoin rails are just another fiat rail.
• 26:53
  David Marcus: And if we integrate into Spay in Mexico or Pix in Brazil or CEPA in Europe, like why don't we integrate into all of these other blockchains that enable money movement and give our customers the choice to actually use whatever they want and give their customers the flexibility of moving money to whatever endpoint they want on whatever network they want at any given point in time.
• 27:14
  David Marcus: Um, and I think this was kind of a turning point for us in terms of let's stop like trying to get to the end state in one go and try to like try to bring everyone to the most decentralized network in the world in one false, false swoop.
• 27:30
  David Marcus: Like you just have to give people what they want, enable them to do more things than anyone else in terms of money movement, do it at the lowest cost possible with the highest reliability possible, you know, fastest settlement times.
• 27:43
  David Marcus: Um, and then once you have network density and you have the network effects playing out, uh, then you know you have all of these endpoints that you can then optimize on the most decentralized and open network in the world.
• 27:55
  David Marcus: Um, but you can't do it in one go.
• 27:57
  David Marcus: And I think that's that's how we're thinking about the world.
• 28:00
  David Marcus: And and we still believe in that.
• 28:02
  David Marcus: And we still believe, like, you know, if you look at our spark volume are going through the roof right now, uh, just because everyone's building on top of it right now.
• 28:10
  David Marcus: It's like the you know, the most capable L2 built on top of Bitcoin, purpose built for stable coins.
• 28:15
  David Marcus: And like every everyone needs like fast real-time Bitcoin settlements and swaps between Bitcoin and stable coins, and stablecoin settlement that has like reach into the Bitcoin network.
• 28:25
  David Marcus: Um, and so the volumes are going through the roof.
• 28:27
  David Marcus: Like everyone's building on top of it, like Tether and Tether wallet and all of the wallets that you know, but also like Moon Pay and others for swaps and and and others using you know a partner company uh that has built swaps.
• 28:41
  David Marcus: Like that, there are two of them.
• 28:42
  David Marcus: There's Flashnet, there's Garden, et cetera, that does a lot of of stablecoin swaps.
• 28:47
  David Marcus: Uh, and Flashnet is growing like crazy now as well.
• 28:50
  David Marcus: Um, and so we have the settlement network that's like hyper-competitive with everything else that's built on top of the most decentralized network in the world.
• 28:58
  David Marcus: And like once you have network density, you can rationalize how these payments are routed between one another and build it on top of the most open network in the world.
• 29:08
  David Marcus: But like again, like that's kind of like it's going to take 10 years, and okay, fine, 10 years is not that long, actually.
• 29:15
  Dante Reminick: Yeah, I think you touched on something really interesting that I want to dive into, which is using uh blockchain-based payments, primarily stablecoin, as a conduit between disparate systems, right?
• 29:26
  Dante Reminick: You have Pix that works really well in Brazil, you have Sispay, you have Swift, you have you know UPC, you have all of these really, really disparate systems.
• 29:35
  Dante Reminick: And it's part of the reason why if I go to my friends in the United States, they're like, oh, why do we need stable coins?
• 29:41
  Dante Reminick: Right?
• 29:41
  Dante Reminick: The system that I use domestically works really well.
• 29:44
  Dante Reminick: But the second that you need these systems to communicate with one another, the entire process breaks down.
• 29:50
  Dante Reminick: And I very, very much see stable coins as again the connectivity layer between these disparate systems.
• 29:59
  Dante Reminick: Talk to me about why it's not that easy.
• 30:02
  Dante Reminick: Right?
• 30:02
  Dante Reminick: Like I think a lot of the times people oversimplify and say, oh, stablecoins can get money from here to there, just like that.
• 30:07
  Dante Reminick: Tell me about why it's so, so hard to build something like LightSpark.
• 30:13
  David Marcus: So let's take a concrete example.
• 30:15
  David Marcus: So one of our clients and partners is SoFi.
• 30:18
  David Marcus: So SoFi, major US bank.
• 30:21
  David Marcus: Um they wanted to start offering real-time global payments to their customers.
• 30:26
  David Marcus: Um, they didn't want to use old Rails, they wanted to use new Rails, they selected us to do that.
• 30:32
  David Marcus: Um, and the experience, if you try it right now, is like you have a bank account in the US, SoFi bank account.
• 30:39
  David Marcus: It has all the services that you may want.
• 30:42
  David Marcus: Uh, and then you want to send money back home to family in Mexico or in India.
• 30:47
  David Marcus: Uh, and so you send dollars to someone in India receiving rupees.
• 30:51
  David Marcus: Uh, it settles within seconds in real time.
• 30:55
  David Marcus: Like the experience is basically you see exactly what the person is going to receive in their currency, or you can send an exact amount in rupees or in Brazilian reais or in in peso or whatever you want.
• 31:06
  David Marcus: Um and it's a beautiful experience.
• 31:08
  David Marcus: It's like literally as easy as sending a text message.
• 31:12
  David Marcus: And and what happens behind the scenes is actually pretty complicated, right?
• 31:16
  David Marcus: And and and like it requires SoFi to actually integrate into our API.
• 31:22
  David Marcus: That's the easy part.
• 31:22
  David Marcus: But then like the way that it settles is actually that SoFi sends us dollars for those transactions using FedNow in real time.
• 31:30
  David Marcus: We take these dollars, we convert these dollars into either Bitcoin or stable coins, depending on the depth of liquidity in that market of the asset that is actually going to give us the best effects rate at that point in time, uh, which is an important thing, by the way.
• 31:45
  David Marcus: We're the only ones that have the ability to do that.
• 31:47
  David Marcus: Select the least cost routing network based on depth of liquidity against local fiat currency to provide best effects.
• 31:56
  David Marcus: And so then at the edges of the network, that that transaction settles.
• 32:00
  David Marcus: So it's like that that money, you never have to park money at the edges of the network in all of these countries.
• 32:05
  David Marcus: You never have to have dormant liquidity on the network.
• 32:07
  David Marcus: It's all real time.
• 32:08
  David Marcus: So that money now goes from our the SoFi FBO accounts, like that we operate for them, that received the funds from them using FedNow.
• 32:18
  David Marcus: It goes from dollars to stablecoin to that other country.
• 32:22
  David Marcus: In that other country, it gets converted to the local currency and pushed to the local payment system and gets delivered to that user's or that receive receiver's bank, right?
• 32:31
  David Marcus: What happened between that also is like you have to have compliance that actually goes through these things so that like SoFi can enable their OFAC checks, AML checks, all these things.
• 32:45
  David Marcus: And the recipient bank has the data that is actually required for them to accept that payment without blocking it, right?
• 32:53
  David Marcus: So all of that happens off band, like you know, and and this is kind of like the the baseline protocols that we've built for compliance.
• 33:01
  David Marcus: Um, and and all of this happens in three seconds, end-to-end, from the US to India.
• 33:06
  David Marcus: And so, like, this is actually really complicated.
• 33:09
  David Marcus: And then you have to have redundant routes because not all of the routes work at all times.
• 33:13
  David Marcus: Uh, and so there's like so much complexity.
• 33:16
  David Marcus: If you pop the hoods and you look at the piping and you look at like the cables and all the craziness going on, it's actually pretty wild.
• 33:23
  David Marcus: Um, but the result is magic money movement behind a soup, like superbly easy to use API.
• 33:31
  David Marcus: And like that's what we like to do.
• 33:32
  David Marcus: It's like, but it's uh, and and so now you you take this and you multiply it by 62 countries, um, and then you know, 70 and then 100 countries, and you see how complex it gets, right?
• 33:46
  Dante Reminick: Yeah, and for our audience members that are confused, I I think that's the point, right?
• 33:50
  Dante Reminick: International payments are about 20 times more complex than than it seems.
• 33:54
  Dante Reminick: And for those who are building the space, you know that the payments can sometimes be the easy part, and the compliance orchestration behind it is actually one of the hardest things to do.
• 34:04
  Dante Reminick: Um, but to David's point, LightSpark has taken all of that complexity and done all the hard work to present you with a really beautiful API.
• 34:12
  Dante Reminick: So I I love that.
• 34:14
  Dante Reminick: Um the next thing that I want to ask you about, David, is just sort of your your contrarian views over the course of your career.
• 34:21
  Dante Reminick: You know, you've worked in large traditional corporations before.
• 34:25
  Dante Reminick: I imagine that many of your colleagues that you have had have not joined you in your crusade to build decentralized neutral payment rails.
• 34:32
  Dante Reminick: Why do you think that this technology didn't make a lot of sense to your colleagues back then?
• 34:38
  Dante Reminick: And what do you think traditional pay like the traditional payment world still doesn't understand about stable coin payments?
• 34:48
  David Marcus: Yeah.
• 34:48
  David Marcus: I think I think the the key thing that like if you don't if you don't understand that, like then you need you need to understand it, which is that like the like I know we pushed out the decision on the Clarity Act to, you know, after recess at this point, which is a shame.
• 35:09
  David Marcus: Um but at least we have Genius and we have Mica in Europe and we have similar frameworks everywhere in the world.
• 35:15
  David Marcus: And this happened only last year, right?
• 35:19
  David Marcus: And as of last year, basically these things made stable coins money, like real money, uh, in the eyes of the regulators, in the eyes of the banks, in the eyes of regulated financial institutions.
• 35:32
  David Marcus: And I think this is such an important turning point because you're actually redefining what money is and what money can be into a digital form.
• 35:44
  David Marcus: And and that by itself is a massive unlock.
• 35:49
  David Marcus: And and before that, it was kind of the gray zone, and like you had a bunch of financial institutions that were like, yeah, this is kind of cute, like, you know, very little actual volumes, and like, you know, I'm not going to touch it and risk like the our entire business on us touching something that doesn't have the full regulatory clarity needed to actually interact with those things.
• 36:10
  David Marcus: And I think the change that happened last year is a seminal moment for the industry because it redefined what money is and and and clarified that digital money was actually real money that you can use in all kinds of different ways.
• 36:24
  David Marcus: And I think I think that that's probably why a lot of people um were just um standing by the sidelines instead of building.
• 36:34
  David Marcus: Uh and I think, you know, now that you have that regulatory clarity, um, it's all about like, you know, okay, now you have that regulatory clarity, you want to use this and you want to move money and value in real time and settle in real time and replace all of these batched processed systems in the world.
• 36:50
  David Marcus: Uh, then who are the companies that you can work with to help you do that?
• 36:53
  David Marcus: And and which companies are are the best prepared for that in terms of capabilities?
• 36:58
  David Marcus: And that's why we feel very fortunate that we did all the work we did in the last four years to be where we are today.
• 37:03
  David Marcus: Um, because all the things are really converging and lining up.
• 37:07
  Dante Reminick: David, I I think that you and I see the future very similarly, right?
• 37:11
  Dante Reminick: We believe in a future where money moves just as data does on the internet, where geographic borders and bank holidays don't matter.
• 37:19
  David Marcus: Uh and a farmer independent.
• 37:21
  David Marcus: Yeah, when you send a text, like you it used to be that you sent a text internationally and it costs you like a dollar per text message.
• 37:28
  David Marcus: And so you were like, no, I'm not going to text my friend in Europe because like I don't want to spend that kind of money.
• 37:34
  David Marcus: Yeah.
• 37:34
  David Marcus: And that now no one thinks about like texting internationally or nationally as a thing.
• 37:39
  Dante Reminick: Yeah, well, I think it goes even beyond that though.
• 37:41
  Dante Reminick: Like if I were to send someone an email, I can write that on my phone and I can send this.
• 37:46
  Dante Reminick: And it doesn't matter what internet provider the person on the other side has, it doesn't matter what country they're in, it doesn't matter what Gmail host they use, they get the email.
• 37:55
  Dante Reminick: And so data has been able to move at the speed of the internet for many, many, many years now.
• 38:00
  Dante Reminick: Money has not.
• 38:01
  Dante Reminick: And for something that is so unbelievably critical for our entire earth to function properly, this type of stuff is needed.
• 38:11
  Dante Reminick: Right?
• 38:12
  Dante Reminick: Really, really needed.
• 38:13
  Dante Reminick: And I think that like the reason I'm in this space, I imagine that the reason you're in this space is because there's a gap.
• 38:18
  Dante Reminick: There's a gap between the way that money should operate and the way that money does operate.
• 38:24
  Dante Reminick: And I think you know, yourself and LightSpark are doing a lot to close that gap, and that gap is is quickly closing, but there's there's still a pretty big difference between the way that money should operate and the way that money does operate.
• 38:35
  Dante Reminick: And to that end, I want to sort of get into the particulars of what you and LightSpark need to do to make that future a reality, and then also you know what needs to happen on a macro level in order for the world to get to a place where money moves as money should.
• 38:53
  David Marcus: Yeah, so I think you know, for us, like I I have a pretty clear view of what we need to do for a very long time.
• 39:00
  David Marcus: Um and and for us, it's really all about can we create the capabilities for money movement and accounts?
• 39:10
  David Marcus: And the accounts thing we haven't touched on a lot, but like I'll I'll I'll I'll spend it.
• 39:14
  David Marcus: Touch on it.
• 39:15
  David Marcus: Go.
• 39:15
  David Marcus: Yeah, I mean, I feel like so okay, we've redefined what money is, and and and there's regulatory clarity on what money is like digitally, like fine, like stable coins are money, great.
• 39:28
  David Marcus: Um but what that unlocks as well is like, you know, what is an account?
• 39:32
  David Marcus: Like, you know, like now there's a flurry of neo banks, like many will fail.
• 39:37
  David Marcus: We can talk about that separately, but like, and some will succeed, and which is going to be great.
• 39:42
  David Marcus: But like, what is a bank?
• 39:44
  David Marcus: What is a bank account?
• 39:46
  David Marcus: Uh, what is a like, you know, what is the the the thing that holds your money?
• 39:52
  David Marcus: Where do you receive your payroll like thing?
• 39:55
  David Marcus: What are the things you can do with those accounts?
• 39:59
  David Marcus: All of this is about to be blown up like completely.
• 40:03
  David Marcus: And and I think like the banks are going to be super important because like I still think that at the end of the day, we need lending capacity, we need like this ability to fuel our economy and and people and and all kinds of different things.
• 40:17
  David Marcus: And so banks will still remain like super critical in that process.
• 40:21
  David Marcus: But if you're a creator on a platform, or if you're uh a driver for like a platform that you know pays lots of drivers, or a host for a platform that uh pays lots of hosts for lodging, or uh all of these people that basically like their payroll is basically received from platforms that actually like pay them.
• 40:47
  David Marcus: Like, are they going to have like receive those that money in a bank account, or are they going to have a branded account from these platforms that are going to pay them, that's going to become their account with a debit card, with the ability to actually like do high yield stuff, with the ability to buy real-world asset like US equities, like on-chain outside of the US, with the ability to do all these things.
• 41:12
  David Marcus: I think like they're like that's a massive, massive tsunami that's actually like just like forming in the far distance, but like with a lot of intensity and energy.
• 41:23
  David Marcus: And uh, and I think that's going to completely, completely change the landscape in the next uh five years.
• 41:30
  David Marcus: And um and and there's no reason for these platforms to give away all of these economics to the edge banks serving those those the those people that they've created an economic economic opportunity for and they're the economic nexus of, right?
• 41:48
  David Marcus: It's like so so I I think that that's just going to be a profound change that's uh that's afoot right now and inevitable.
• 41:56
  David Marcus: Uh, and we're super well positioned for it.
• 41:58
  David Marcus: And and like that, this is really exciting because then you can build a network, and then as you have more nodes in the network, like as they start to actually transact with one another, they can transact on net.
• 42:08
  David Marcus: You don't need to depend so much on on external networks, etc.
• 42:12
  David Marcus: So there's just lots there.
• 42:15
  Dante Reminick: Yeah.
• 42:15
  Dante Reminick: I love I love it, and I I agree with that vision.
• 42:18
  Dante Reminick: I think that embedded finance today has allowed for anyone to become a fintech.
• 42:25
  Dante Reminick: If you have distribution and you have access to users, you can become a fintech.
• 42:30
  Dante Reminick: And historically, that was really, really hard to do because there was always this fight for being the primary financial interaction of a user.
• 42:38
  Dante Reminick: And banks have owned that for thousands and thousands and thousands of years.
• 42:43
  Dante Reminick: But now, like I said, anyone can become a fintech.
• 42:46
  Dante Reminick: And before it was really hard to do that because your you know, account over here could not talk to your account over here and could not talk to your account over here.
• 42:56
  David Marcus: Absolutely.
• 42:56
  David Marcus: Build a compliance program and build servicing.
• 42:59
  Dante Reminick: Yeah.
• 43:00
  Dante Reminick: Yeah.
• 43:00
  Dante Reminick: I mean, up until a few months ago, and you're the guy to talk to about this.
• 43:04
  Dante Reminick: My PayPal could not send money to my Venmo, and my Venmo could not send money.
• 43:08
  David Marcus: Yeah, I used I use that analogy a lot.
• 43:11
  David Marcus: Yeah.
• 43:11
  Dante Reminick: And listen, these are two companies that have the same parent organization, but the same thing can be said for my Cash App to my Venmo or my Venmo to this, that, and the other thing.
• 43:23
  Dante Reminick: Now that does not need to be the case.
• 43:26
  Dante Reminick: What you are building, the the rails that you are building on enable, again, these disparate systems to be connected via secure rails.
• 43:34
  Dante Reminick: Now, we have so much more that you and I should be covering, David.
• 43:40
  Dante Reminick: I want to talk about how the dollar gets wrapped and expands around the world and and everything like that.
• 43:47
  Dante Reminick: But this could be a seven-hour podcast if we go down those roads.
• 43:52
  Dante Reminick: And I want to be respectful of your time here.
• 43:53
  Dante Reminick: So, David, any last thoughts that you have?
• 43:56
  Dante Reminick: Anything that people should know about LightSpark, about you know, getting involved before we wrap up here?
• 44:03
  David Marcus: No, this was great.
• 44:04
  David Marcus: And uh and I mean we we we didn't talk about this, but we just redid our website to cover really all the capabilities that we have.
• 44:13
  David Marcus: So I I encourage people to go on lightspark.com and find out more.
• 44:16
  David Marcus: I love it.
• 44:17
  Dante Reminick: Well, David, thank you so much for joining us.
• 44:19
  Dante Reminick: Next time we're gonna talk about you know dollars expanding around the world and agentic finance and and everything like that.
• 44:25
  Dante Reminick: Um, you have stated on a number of occasions that you're most likely going to be dedicating the rest of your life to this mission.
• 44:32
  Dante Reminick: And I really, really hope that you do.
• 44:34
  Dante Reminick: And for the world's sake, the rest of the world should hope that you do as well.
• 44:38
  Dante Reminick: And we hope that you're successful.
• 44:39
  Dante Reminick: If you want to learn more about Light Spark for our audience, go to their website.
• 44:43
  Dante Reminick: Um, it's updated, it's beautiful.
• 44:45
  Dante Reminick: I spent a disproportionate amount of time on there.
• 44:47
  Dante Reminick: Uh also reach out to their team.
• 44:49
  Dante Reminick: I know a lot of their team, they're all very friendly uh and and responsive.
• 44:52
  Dante Reminick: So please, please, please learn more about LightSpark.
• 44:55
  Dante Reminick: Do your deep dives.
• 44:56
  Dante Reminick: Uh, David, I appreciate the time.
• 44:58
  Dante Reminick: Thanks for joining us.
• 44:59
  Dante Reminick: Thank you, Dante.
• 44:59
  Dante Reminick: Thanks for having me.