How Stable Coins Will Create Prosperity

and he is general counsel for Reserve stable Coin. He is a an attorney. He's working with a stable coin, but he actually comes from the payment space, working with Venmo and also working in a blockchain research company as well. He gets the technology side, he gets the illegal side. Man, he just gets it. It It was a really good conversation. We talk about the remittance industry. We talk about stable coins, the pegs, how they work, maybe if they don't work.

We talk about Facebook's coin which used to be a stable coin. We get into regulations, talking about what may or may not hold back the industry, and so much more. It's a really good conversation I really enjoyed. We're definitely gonna have Matt back, so let's go ahead and just jump right into this. All right, guys, welcome to another episode of the Market Disruptors podcast. Today I am with General Counsel of Reserve stable Coin Matt Girdler, and Uh,

we've had some conversations before in the past. He's super knowledgeable. I'm excited to dig intoay because there's some new developments in the stable coin space I want to jump into. So anyway, welcome Matt. Great to be here. Mark All Hi, good, I'm happy to have you. Happy to jump into the conversations today. So UM, I gave you a quick intro, but for those um that are listening, why don't you just kind of tell us who you are and how you got to the black blockchain space and what you're

doing right now. Sure. Um I got involved in the blockchain CRYP the currency space back inteen, around the time that the bit license was being proposed. I had been working during my one of my summers during law school at Venmo helping them apply for money transmitter licenses in New York. Basically took their money transmitter statute, made it more onerous, and applied it to a technology rather than

how technology is used. And so UM I got involved with my background at Venmo and trying to fight against the bit license at the time, and I thought, you know what, there are a lot of problems in our financial system, predominantly dealing with remittances, cross border payments, UM clearing and sort of the time, and I realized that cryptocurrencies generally are blockchain generally would be intensive solution to this,

and so that sort of got me down the rabbit hole. UM. I realized that a lot of attorneys, because there wasn't much legal guidance at the time, so they would try to rely on their experience, but they didn't truly understand the technology. So that's sort of the bridge that I tried to UM. That's why I tried to bridge was studying the technology at a level where I could sort of bridge between the lawyers that had been practicing for twenty years and the engineers who had never realized that

this law was applicable to them. UM. So the speed up my background. I worked in big law law from old Mill Bank UM. Then I went off to co found an institutional research firm UM for cryptocurrencies, basically writing detailed twenty eight page research reports on individual cryptocurrencies for institutional investors. Focused predominantly on the legal and regulatory risks that might be real and investment. Some of the projects we covered were can um paisas so UM. I've looked

at some of the more unique regulatory athletics there. Unless UM did laws of research last year to join a reserve as their full time general council UM. What really interests me about Reserve is there's two tokens in their protocol, a stable coin and a secondary token. So after reviewing all the different ways that crypto currencies have been launched and the legal and regulatory risk, I was then able to apply my background and learnings to the launch it

to new crypto currencies. Yeah. Cool, that is a that is a really um, really good background that you have. It's pretty cool. You know. One thing that I love about the space bitcoin and and the space is that it's multidisciplinary, right, so like you have to really understand a bunch of different subjects at depth to really grasp how deep this goes. And so you you know, obviously being an attorney gives you one side of it. Uh, spending time at digital assets research and really digging in

gives you that technology side. And then having the even payment space like at Venmo. Uh So, man, that's that's an awesome background that you have that I'm sure helps you a lot with what you're doing now. You're now with this new um stable coin reserve. Uh. And and let's just talk about stable coins for a minute. So, uh, stable coins are something that's become very popular like kind

of like over the last year. A couple of things. One, I mean, really, there's nothing stable, right, everything is always moving. So what's it stable against? That's that's one thing. Um, So why don't you tell me about that? What what is it stable against? Is it stable against the dollar or what's it stay able against? It's well, this is

a cop out answer, but it's stable against something. And every stable coin is going to be different, Um, the more noteworthy ones, Heather Gemini usd um see all of the dollar backs, the outcoin. It's stable relative to the price of the dollar, subject to counterparty risk and so the quote. But when you think about it, the US

dollar isn't stable. It is an inflationary currency, so we can't say that it's a stable and generally, but it is stable relative to the price of the dollar ideally, and then you can go to different uh, trust tokens coming out with their I think their pound back stable coin, and so that will be stable versus a town. But as we look at exchange rates between the pound and the dollar, those fluctuated and so even those won't be stable against each other. So stable really comes down to

what are you trying to do. At least with reserve, we're focused a lot more on the developing countries places is where their native currency is going through hyper inflation. So our initial launch area, um, most likely next quarter is going to be UM trying to give Venezuelans an opportunity to put their money into their boulevards into something that is more stable than the boulevard initially will be

pegged to the dollar. Right. It's dealing with ten percent daily inflation, right, so as soon as people receive boul of ours, they have to find a way to get out of bolivars otherwise tomorrow will be ten percent less, ten percent less the day after, and that's compounding the

wrong direction. Right. So, um, you know, one thing is this This thing is global, and a lot of people in the United States we get kind of trapped with this, like thinking that everything is like the United States and the US dollar is the reserve currency of the world, so it's you know, we the dollars seem stable to us, but in other countries they deal with this changing in value all the time, right, They're always watching these exchange

rates and so forth. I don't want to I've too far down this rabbit hole, but maybe just poke at

it a little bit. But you know, we talked about stable to what right, everything's moving, And it's interesting, I mean, if you really want to go into the history of money, for five thousand years, the world kind of was on the gold standard really up into the early nineteen hundreds and so and really I believe and and history shows that for a few hundred years, from like the four hundreds to the seventeen hundreds, the world saw a massive

prosperity when the whole world was on this unified gold standard. And it's really interesting that we don't have a measurement of wealth today. So imagine if I needed to, I was building a house and like whatever, the yard was changed, Like the yard is this long today, but now the yards this long tomorrow, right, Or like the weight was this one day and the weights this, Like you need these standard units to measure things against, and I think

that we don't. We don't obviously we don't have that today. Every everything is measure it against each other, but not against a standard. What do you what do you say about that? Well, if you think about gold, just generally, um, gold fluctuates in price. So even if it's going to be backing a currency like it was with the gold standard, at the price of gold, it's going to fluctuate. What

does it fluctuate against? It fluctuates against the currency. Well, and there's the open market for trading, Like if you treat gold as a commodity like a lot of virtual cryptocurrencies are are are are are going to be argued to be um, that's just a volatile asset. Um. But if each currency was measured in gold, for example, so the US dollars this many dollars to announce the gold, the euros this many euros to announce a goal, the boulevards this many boulevards to announce the gold, at least

everything was tied to one general measurement. But and then we would have something to stable against compared against like so even if we had like a stable coin that was paid to a basket of currencies. UM, at least we have something to compare what is stable. I don't know if it just seems it seems weird, like how do you even back into that equation when you have nothing to measure stability against. And I think that is an interesting perspective, especially where we're the world is going

through globalization. Everyone's becoming more tied together, they're more international transactions. UM. But at the end of the day, UM, it doesn't need to be a stable coin. Maybe it could be bitcoin, it could be another virtual currency that doesn't currently exist. UM. When I when I initially got interested in the industry, people are talking about how you would travel around the world and not need to convert into the currency of that local jurisdiction because there would just be a global,

universal payment mechanism that you could use. At the time, it was the point because there are only maybe a hundred cryptocurrencies at the time. But now there's no reason that it needs to be a stable point. Of course, it could be a stable but then again, if you're dealing with something on a global level, if you're stable against one currency, you're not stable to the rest of the world. Just hold hold the currency right? Why not

just hold the currency right? And then you could say to take what UM libra is trying to do with the basket of different currencies. So you're stable relative to a basket of currencies. So I guess the question is more stable than not. I think it's definitely less small atile. Yeah, I want to jump into libra. We're gonna table that for now though. But one thing, you know, I've studied money, and i've I've I've been a big believer in gold

of investing goal for a long time. And one thing that's interesting if you look at UM prices throughout history and you compare them against a basket of assets. So what is this home in the medium home price compared to how many barrels of oil would it take? How many ounces of gold would it take? How many right, how how much copper would it take? And you can compare it to assets. That's one thing. And I haven't really seen any stable coins pegging into baskets of assets.

Have you seen that? Wow? I and pretty your audience. I did not lay that up for you, but that's a beautiful softball throw to me. Um, that's actually what we're trying to I was I wasn't trying to do that, so I guess tell us how you guys are different. Yeah, So, um, this was more over the long term, and it's so eventually we want to have all of our assets on Chaine. Um, we want to put the assets collateralizing outstanding stable coin

into appreciating but safe assets. Think tokenized treasuries, think tokenized bonds, things that are relatively safe but are appreciating. And the ideas that if you get these assets all around the world, you could create a basket of assets that is stable just generally, not against any currency, not against anything else,

just stable against the portfolio that's back in it. Of course, you then have to have a portfolio that is reasonably stable, which is difficult and until we could prove that we could do it, it's all an idea. But that's what we're trying to do is create a portfolio of assets, got to have a stable coin that makes it where the stable poin long term isn't back to any currency

of any jurisdiction. Yeah, because I think you know, I've I've come out and I've said many times, especially in response to this growing thing of modern monetary theory MMT, where they want to just print more money. And I say that money is not wealth. Money measures wealth. Wealth is assets, and so it makes sense to peg it not against money, because money is nothing. Money is a measurement. To peg it, just peg it to the actual wealth, right, the actual assets. That makes sense? Um? So why so?

So these stable coins have really started to get popular. We've seen a bunch of them jumping up, A bunch of big companies, institutions, vcs, etcetera are jumping on board with the stable coins. Um. I want to know why people should care about stable coins. I want to know why companies want to develop stable coins, and why do individual people care about stable coins? Sure? Um, I think that this sort of the interesting stable coins came out of the bubble bursting at the end of early eighteen.

A lot of people were still saying cryptocurrencies are gonna solve remittances. They're going to be a store of value for people in countries that um, whose wealth is deteriorating because of the local financial system. But when bitcoin loses or a cryptocurrency generally loses value during a bubble, well, what you're trying to solve doesn't really solve it. So I think that's sort of where the idea of well

maybe stable points to be a lot more interesting. And also as you have depths, you're going to need a stable payment mechanism within the depth anyway. But um, I find that more of a long term thing than a short term thing. I think the developing countries is more um an interesting short term play. So that's like the retail play, right, So, like from a retail perspective as a user, like if I put all my money in bitcoin or whatever point, it loses, like, that's horrible, I

lose everything. So why don't I just put it into a stable coin that doesn't lose value? That's kind of like an individual retails perspective. I guess then you have to tell me why it's better than whatever currency I'm holding, Like why not just keep it in the dollar? Then? Right,

then there's that. Yeah, and it comes down to um remittance of sending money back home like a PayPal Western Union, they take ten to twelve percent feets large largely because they solve the last mile problems, and whereas a crypto currency transaction will range probably from point zero zero one percent to maybe a point one percent or one percent, depending on which cryptocurrency you're using so all of a sudden, un like if you're trying to use the existing financial

system from the US trying to send money to let's just say Europe, even you send a bank wire will cost and it will take a day or two um to actually get there, whereas I could send that same amount of money more cheaply using a crypt a currency. And if it's a large amount, maybe I want to make sure that it's stable and value so there isn't a volatility risk there. I'm able to move money around

uh much more easily. Um. But going back to your question about why would I want to use the sur by this, If you're a retail investor, unless you're sending remittances, are dealing with international cross border payments, then most good enough. PayPal is good enough, voll is good enough. People in the US largely don't need this right now. And I believe that cryptocurrency stable points are going to more largely take place and grow outside of the US and more

developed countries. UM. So that's who would use it. People who think that the cryptocurrency is better than their either currency where they live or they're dealing in a country like Cyprus, which took a certain percentage out of bank account several years ago. And so that's why a retail person I use it. Why would an investor UM investment a stable cooin UM? Generally you don't invest in the

stable coin. You're either investing in the company behind the stable coin, a profit sharing agreement, or there's a secondary token. And so when we're dealing with feed dollars in a bank account, the general business model is very similar to a PayPal where they're getting a yield on the app the dollars in the bank account from whatever bank that they're storing it with. And so it's more money that you're holding, more stable point upstanding, the more interest revenue

that you're collecting UM not all or like an insurance company. Right, so they have that float, they can invest the invest what they're holding, right, And that's actually where it becomes interesting. Where's the different types of financial institutions that people could use.

Whether it's a trust company like a Gemini, whether it is an MSP like trust token UM, what you're allowed to do and what investments you're allowed to make are very different depending on the type of financial institution that you're regulated as and so that's just something to consider. Um, what is the money that is back in the stable point, where is it, what is it being used for? And you just want to make sure that people aren't just making large debts that you won't get any benefit at

the end. But then again, a stable coin is meant to not appreciate. Yeah, exactly, it's not meant to appreciate. So from a from a retail user perspective, UM, if that stable coin could hold value better than whatever fiat currency I have available to me, that's one option why I'd want to use it UM. The other option would be UM. I mean the other option is an investor doesn't make sense because it's stable. It's not I want to invest in something that's going to go up in

value and the stable coin is not supposed to do that. UM. Now why do we see so? And I guess you answered so. The reason why we see big companies vcs, etcetera starting stable coins UM, the play, the probably the predominant revenue play would be to have those assets under management which they could invest and make more money on. Yeah, that's one reason why people would be interested in it. UM. And at the end of the day, data is valuable

at the bitcoin isn't anonymous, it's pseudo anonymous. If you run a node like you would get access and you're able to UM parse the data and analyze that data properly, you're able to learn a lot about a transaction. And when I think about conglomerates creating their own cryptocurrency and running the validator nodes themselves, even if they're not collecting personal data directly by looking at your idea or anything like that, they're able to glean information about your spending

habits and what you're using this for. And I think that is probably I don't know if that's more valuable than the interest from the money backing it, but I do see that there's value in that as well. Yeah, so that's what some of these stable coin companies would be. They have a play possibly on the data as well as whatever the float they can do with the float. Yeah, got it now. Um let's so with stable coins um

for dominantly, they're all centrally controlled. You talked about the counterparty risk as well, they're essentially controlled, and they're trying to peg to something more more stable. So whether that's a currency of basket of assets or whatever um, And I'm guessing there's all different types of ways that they can try to hold that peg um. But historically, doesn't it seem like all pegs have always broken, even even

nation states haven't been able to hold their pegs. Yeah, you have to get all stakeholders involved interested in protecting the peg. And that's sort of I could speak to Reserve because I know that much more intimately than I know the other stable print projects out there. But the way we approach this differently is we have a secondary token that incentivizes arbitragers to keep the teg on exchanges. You're always like, you're never gonna be able to keep

the teg unless it's relatively constant on exchanges. But the question is how do you do that. You could perform your own market making function, but then you're never going to get to decentralized and there's gonna be a lot of other issues of trying to keep a peg yourself. But if you trust that people are incentivized because they're going to profit by keeping the peg, all of a sudden,

maybe that will Like will that work? Um, we haven't seen it done yet, so i'd like to think it could work, But I think you have to incentivize everyone in the ecosystem to keep the peg because it's in their best interests to do so. In a normal the outcoin back stable coin, why does a user, why does the market make The people that are buying it just want to be able to arbitrage and on exchanges, that's

where their profit is. They're not interested in making it stay a dollar because they don't make money off of that. They'd rather it's be different. Yeah, I mean George Soros one of the most famous and prolific investors in the world. I mean, he's famous because of breaking the peg, right, So he made a billion dollars in a day by breaking the peg. And so that's why it just seems like man if if if nations can't even do keep the peg, how are these smaller institutions going to do that.

So it's an interesting challenge that I guess we'll have to wait and see how that plays out. Yeah, in our white paper, we discussed the saurus attack, and we think we've created mechanisms to prevent against run on the bank and a saurus attack, largely by after a certain point. If we're saying that there are certain assets that appreciate. If that means are volved filed, they could go down.

Maybe it tries to read defaults in a foreign jurisdiction for whatever reason, it could default, and maybe that starts triggering itsel Off. Our protocol has a mechanism in place where it basically prevents withdrawing after a certain point, just limited to a paradis share of the basket. That way, the first people coming aren't going to take it out. They have to sort of trust that the pig will be restored to a dollar later on. But it prevents

a run on the bank and prevents a sourrous attack. Yeah, well, that's a really good framework for for the stable coin talk. Um, we'll get let's let's jump into some stuff. It's maybe a little bit more in your wheelhouse, which is more on the regulation side of things. Obviously you understand the technical side very well with your background, and so thanks for jumping into that with us. But on the regulation side, you talked about like working with Venmo and the problems

they had even transferring money. Um, but now we're talking about stable coins and global regulations. So you even just said right like most stable coins maybe don't make sense in the US, but they make sense abroad. And then of course you start running into all different types of regulations and things like that. So what are some of the big I'm guessing regulations is probably the biggest hurdle that stable coins will have to make uh to reach adoption.

But what specifically are you you think will be the biggest problems there? Well, the problem comes down to where are you located and who do you want your customers to be. If we're gonna say that you're either located in the US or you want to have US customers, your regulatory responsibilities are going to be very different, and it's gonna be a lot more onerous doing it here versus elsewhere, um in the world. And that's just sort of if you live in the US, this is what

you have signed up for already. I didn't sign up for it, right, UM. So I have this conversation regularly with founders like, well, people are doing this elsewhere, um, and it's so much easier. There's much more complicated in the US. Like then leave specifically stable coins. Really the target market is out of the US, right, So now you have to deal with each individual country has its own laws and then I'm guessing because you're a US company, you still have to really somehow be with US laws

as well. I mean, what's that challenge? Like, yeah, that's a it's a very big challenge. UM. I will say that the US is largely more onerous in terms of your regulatory obligations and what you have to do. So there are a lot of jurisdictions actually where if you're complying in the US, you'll be your compliance prophecies are going to be better than what they would require you elsewhere, and most regulators as will allow you to do that. As you are regulated in the US as a financial institution.

Of course, you go into EU and some of like the more well some of the bigger countries, that's not necessarily the case. But if you come in and being regulated by the US, like you're going to be more respected when you go to regulators elsewhere. But if you are regulated by the US, there is certain information that you need to collect and so, like one of the big issues is sort of the Sincon and o fat regime,

which I sort of group into an umbrella called financial crime. Um. This requires you to collect certain information about the people you're doing business with. But the information that you collect is going to be different depending on how risky this person is to your business model, and so you have to sort of make an assessment of what risk profile

is every customer that comes in. You need to collect certain information, but you might need to collect even more information if your research shows that this is an extra risky person. And you also have to then monitor this person's account. Maybe they're sending very transactions, or they have a bunch of small transactions then a large transaction. Now you have to analyze, well, what is this money being used for? Are we uh like, is this being used

for legal activity? We need to get more information from this person. And on the flip side, if you're purchasing the stable coin, you need to know where that money came from. And so if you're dealing with are developing country or a country outside the US, question is how can you prove that the funds come from a legal source. Maybe you look at people's bank account records, maybe you

have them signed affidavit. If it's small enough, they're just it just sort of depends, and it's going to be very difficult because that's not really how you like traditional technology scales, and that's not how many of the financial UH industry works in these countries. If you go down

to UH Columbia for example, Venezuela, Columbia for example. UM, there are a bunch of UM market makers that just don't do ky C, and you can't plug into that ecosystem if you're a US financial institution, So you have to sort of go around the existing financial systems and build it a new and that's not easy. Yeah, And then why would somebody want to comply with that when they have other options where they don't have to, Because if you want to work out of the well, most

countries in the world have m L KYC policies. But I'm talking about from a customer perspective, Like, if I can deal with a market maker that doesn't require k K y C, why would I go with somebody who's gonna request my children so security numbers in ten years of bank statements or whatever? Right, Like, why would I want to do that? Yeah, that's a very good question. Too much, too much friction, you know. UM. So, so each country is its own challenge, so that that that

that can make it very difficult. I I you know, looking at the Facebook Libra coin, which made a bunch of noise this past week. It's technically a stable coin as well, And it seemed like they didn't even plan to launch in the US. Really, they wanted to launch I think in India, which was their biggest market, because of what's app and like the right in India's just like nope, you're a launching here, right? Is that kind

of what happened? Yeah, India's been on and off. Cryptocurrencies are illegal, not illegal, but um, they've been very skeptical and it felt largely from a consumer protection angle, Although I do appreciate that they focused on one country because I think that's a much easier and more targeted way of going about building your business and use case than just going out globally saying Okay, here's a stable point

everybody uses. You need to solve the real world problem for people, and in India this would have potentially solved the real world problem. The problem is you have Facebook

doesn't isn't looked fondly on by the regulators lately. Largely these were data privacy issues, um, but now when you're talking about adding financial data and control of people's money, all of a sudden, people are going to look at that even more strongly based on the response be a privacy before because there's nothing probably more important other than health information than financial information and a person. Yeah, So

the regulations they just continue to pile up. I know the G twenty was just meeting and they were talking about this f T A f or whatever, right, the fat fat fat or whatever they call it, and uh, they're wanting to impose more regulations and this travel rule and whatnot, which I don't want to really want to jump into too much, but I saw some comments today where they said, uh. I think the Secretary of U. S.

Treasury was saying, um. He said uh. He said, they want to make sure that virtual asset service providers do not operate in dark shadows, UM, enable emerging fintech sector to stay one step ahead of rogue regimes and sympathizing sympathizers of illicit causes searching for avenues to raise and transfer fund without detection. Um. And so they're like, we want to allow cypic currency to become the equivalent of

secret numbered accounts, uh, etcetera, etcetera. Right, um, And so I mean they kind of get it and they want to stop this. I'm curious you know, for me, I've seen, you know, specifically around the Facebook thing they're talking about, Well, we're always control the on ramps and off ramps, so it seems like they at least have that. Of course, they're gonna always continue to UM regulate the exchanges as best they can, specifically the ones that have on ramps

and off rams. What for those that are listening on ramps and off rams meaning the chance to go from crypto back to FIAT. So whether I turned Fiat to crypto, crypto back to FIAT, that's an on ramp and off ram, so always regulate that. But let's go back into the money remittance market. So, uh, the big use case is money remittance. If I want to and and I've done this because I have people all over the world that worked for me, and I try to send money Western Union,

and I got to drive down to the location. It takes me an hour while I'm there, it has to be done in cash. It takes thirty to forty five minutes to do it. It's super expensive, etcetera. Right, and and and it's really expensive. So if I could just send them crypto, then that that cuts all that out. It's way cheaper, um, et cetera. Now, these as I just mentioned, is fat these regulatory people trying to manage the on ramp, soft frames, etcetera. But where does remittance

fall into this? So like if I can just if if somebody in Columbia or India can just download an app and I can just transfer them points, Like, what what can a regulator really do about that? Um, there isn't much that a regulator can do about it. This is this A is this? Do you see this as a war they're going to eventually lose? That's an interesting question. Um, yes,

but over a much longer horizon than anyone expects. UM. I haven't used sort of the financial crimes aspect looking at this, but I look at it from the SEC perspective of the example of decentralized exchanges. The essential eizes exchanges as they currently exist are not really decentralized exchanges. Yes they're No, they're not taking custody of funds. So

that's the argument. But you know who's building you largely know who's building it, you know who's behind the project, you know who put it out there, you know who's responsible up key, who to go with problems. That's not decentralized,

and that's running it's an exchange. But what were to happen if there was a truly decentralized exchange, no one knew who was behind the project and people were just able to with smart contracts posted at ask prices that were executed automatically, which I believe, which I believe there will be. There's a there's a need for it, so someone's going to build it. Yeah, and I think this is probably a tend to fifteen year horizon. Um, some

people might do it quicker. You might think way sooner hopefully, but anyway, go ahead, right, But yeah, the question is there's no one to go after at the end of the day. You can't turn off, like there's no servers to turn off because there it's around the world. And so what happens when a regulator can't regulated thing that it wants to regulate? So they control the on ramp off ramp. But if I never need to get on

or off, what are they gonna do? Right? And what happens when you could then spend that in the real world like the market. That's a real question. The thing is we're not at that point yet. We're currently dealing with I c O S quad Quadraga, Quadrialga, exchange UM, runaways UM, We're dealing with much larger fraud and other things right now, where I just don't think that's really on the regulator's mind. There's just so much low hanging fruit right now with that actors that that's who regulators

will go after first. That's not to say that they won't go after others later, but what you said, yes, curious someone coming from Venmo and then working on stable coin, and then the remittance market is the big piece there, and the regulators are trying their best to stop that from happening. But if you really open up the remittance market, which is the big use case, then it almost has to get rid of this regulation. It's like you can't

really open up the remittance market. I think without that it seems like, I mean, because as you're saying, right, to get all these individual countries with all their individual laws to all work together, like, it's almost like it probably would never happen, and so you almost have to

move outside of that. I would think, I think a company like a PayPal um if you're not saying that the PayPal would do that I'm saying that a company that starts for nothing and takes the PayPal model of okay, we need to go and figure out how to spend money to each of these countries, and to go through

the process in each of those countries. It's tedious, time consuming, extensive, and it's unclear whether it will even work because now we're dealing with cryptocurrency as opposed to I don't know digital money of financial institution, so that might be in an even harder sell um. Or maybe let's say that there are still Paypals not available in a lot of places, which is why the money remittance is still trillions of dollars, which is why I still have the Western Union because

I can't pay Pal to those locations. Yeah, and there's been a big pain point that if you're gonna send remittances you have, like you said, you need to use cash. The question is at some point cash has to enter the system. Yeah, and so at that you don't prevent money wandering. The idea is that if money wandering is found, you have enough information to have it go back to

the regulators that are enforcing um whatever law they're up. So, for example, if I remitted money to you, and you've never been ky C, but you send that money off to someone else. I was KYC when I put the money in the bank account. And they're gonna the let's say Finncent comes or the Department of Justice comes and says, here's a subpoena. I need the records of Mark. Um, give me his records, um, right um? Or we need to know who this went to, Like, well, I know

I sent it to you. Here's all the information I know about Mark. And you could have sent that off to someone else, but then they're just gonna go to you. And yeah, you could say I'm not going to help you, but then they're gonna right you know um about cash, right, I mean, none of this was even around fifty years ago. The whole rolls cash. I mean when they when they raided the Iraq, Saddam Hussein had pallets and pallets and

pallets of cash. I mean even just a few years ago, the Obama administration sent planes of pallettes of cash to Iran. Pallets of cash he sent in the middle of the night to Iran. Right um. And so like all this like financial regulation is to like we need to know where every single penny is going and who's who? It's all this is all brand new, isn't it. Um. Yeah, well, if you want to even go back to like two thousand seven, two eight in the financial crisis, I forgot

which bank was getting a bail out. I don't want to see the wrong name. But they need an infusion of like a billion or two billion dollars um And this was before Monday. The bill opened on Monday, but thanks are closed after by PM on a Friday, and so there was no way to wire this money. So someone had to fly on a plane with a multibillion dollar check to New York from Japan to be able to get the money there in time. And yeah, this could have we didn't have the solution before. But you're

saying going back in and further it was all cash. Yeah, and that's our legacy financial system is something that this gets into philosophy, which like again we always have to dip into this, but like, oh, this regulation, like it's it's all new, Like is it really even that important? And the world hasn't always operated like this, and so if it hasn't done has if it hasn't been like this for very long, if we operated fine without it? Do we need it? And couldn't we just moved to

a crypto only remittance market. We don't have it anymore. I mean, it's the world gonna end. No, it's the crypto utopia. But um, we're not starting with a blank slate. We're starting with many existing financial regulations, most recently got more ownerous doctor in the financial collapse because the free market was greedy and we decided to be able out.

Um a lot of these companies. Um, some people and that with the crypto ethos would say, well they should have all failed and it's a survival of fit it like pre market. Um, that's not what the US government does. Yeah, that's not what happened. And that's the U s government is responsible for protecting its citizens and they decided that this is the right thing for us to do. Whether

you agree with it or not, Like that's irrelevant. What's relevant is there are enough people in Washington, d C. That agreed that this was the appropriate response to take, and then they took it. And that's what we deal with by being in the United States. Yeah. Cool, Well, this is such a fascinating topic one that I'm I'm really intrigued in and we could sit here and go on forever and ever, but I know we need to wrap this up, so let me just ask you one

last thing. So I'm just curious kind of in your position. You have this unique perspective on on payments and stable coins and where you're at. What are you seeing right now in the space that has you excited maybe for the near term, six months or twelve months out. I'm really excited that UM people are more focused on cryptocurrencies that have been out for a while. There's less scams

out there. UM people are not are raising less money. UM. The ones that are raising money are raising five million dollars, not the hundred million dollars that billions of dollars that others have raised to build a technology. UM. So I'm excited about that UM for a bunch of reasons. I'm excited for the KIN lawsuit, because the Kin FBC battle, because I'm really excited to see what we're going to

get from that court case. Yeah. I don't think KIM has great facts to support the Howie tests, but their argument that how we tested and apply is a novel and interesting argument that I'm curious to see if that will hold any muster um under the in the court. Do you think we'll see that play out over the next twelve months, um, some of it, But we won't have an answer in twelve months, but there will be filings.

I assume Ken will file for emotion to the smiff at some point, because that's usually what you will do. The SEC will respond to that, the court will likely say, Okay, there's enough to go to trial over. And I expect there to be a lot of legal that like not I want to call them battles, but legal back and force to position each side. Um. And. I think we're gonna learn more information about what's going on there from that. But no, I don't think that this is going to settle.

I don't think it's going to end in the next year. Year now and then we didn't talk about Facebook Libra really um and and we don't have any time left to dig into it. But I guess that's something that's going to happen over the next six months or twelve months. UM. Let me get your opinion. They have been asked by US Maxine Waters leading the charge to stop, to halt until this is get figured out. Do they halt or do they continue and what does the next six months

look like? For that, the question is telling them the halt is vague. I'm not sure. I didn't read what the exact response was. But Facebook itself isn't in control of the Libre Foundation. It's one of the founding members. I think either they or Calibra runs a node for validation, but Facebook itself doesn't control it really, And if they wanted to like show a more decentralized thing, I think they should have taken a further step back so that

they wouldn't get so much regulatory pushback. But hindsight is and you obviously want the marketing push and being asociated with that. I think what I'd be more worried about is you had already been approached by several regulators who were talking about Facebook breaking up big tech companies, and regardless of how you feel about that, when you add financial too something when you're already being talked about as being too big and controlling too much of people's lives, well, yeah,

so it was just a very poor timing. And so ultimately I don't think Facebook has any legal obligation currently to stop doing it. It's whether or not they are worried enough that Congress might take some action that they don't like, whereas it would make sense to stop. And I just don't have access to their internal conversations or their risk profile or not information to guess whether they

will push back or not. So as a as a hypothetical general counsel, do you tell them, hey, let's hold off and see what happens first, or like she just go for it. I don't launch in the US. Don't launch in the US, right, I needed more information to the side if you completely stop or not, but at the very least you're not dealing with US customers and told us is handle got it? Got it? Great? All right? Well, thanks for sticking your neck out on that one. I

know that's uh, that's always a tough one. Absolutely Well anyway, Matt, I know we went a little bit long. Thanks so much. It was a great conversation. I love talking about this kind of stuff and hopefully everyone enjoyed listening. Now you have some really good perspectives. Where where would anyone to keep up with you if they wanted? Um, you can follow me on Twitter at m a Gurgler, or on LinkedIn you could add me just Matthew Gurgler, Great, all right,

well good stuff. Thanks for taking the time to talk today. It's been my pleasure. Have a great day. Hey. If you like this episode of the Market Disruptors Podcast, please help us take this to the top of the podcast charts. Just please do me a favor and rate, review and subscribe. Taking fifteen seconds to just leave a quick review goes a long way in helping us reach more people and

disrupt more markets. I really appreciate you listening and I'll see you next time on the Market Instructors Podcast.