And I think today we're supporting Yeah, we're supporting url USD, the ripple stable coin from today and you'll be able to earn five percent on that from January. So those are some of the best rewards in the industry.
Hey, everybody, welcome into the Thinking Crypto podcast. I'm your host, Tony Edward and my guest today is Simon McLaughlin who's the CEO of Uphold.
Simon. Great to have you back on.
Tony, Thanks for having me back on. Look forward to chatting absolutely.
Simon. We spoke, I would say maybe four months ago.
We were talking a bit about what bigcoin may look like towards the end of the year, and you know some of the things that you mentioned. I came to fruition and Uphold of course has some big announcements around the new rewards program. So how about we kick it off with the rewards program. Tell us a bit about that.
Sure, So we've introduced a rewards program very easy offer some of the best reward in the industry. The highlights are you can earn up to five point two five percent on stable coins, five point two five percent on a stable coin called USBC, five percent on py USD, five percent on USDC, and I think today we're supporting Yeah, we're supporting URLUSD the Ripple stable coin from today and you'll be able to earn five percent on that from January.
So those are some of the best rewards in the industry. You can access those rewards on stable coins by doing really easy everyday stuff. You simply need to log into the app once a month and if you hold any of those stable coins, you'll be earning those that level of rewards. In addition, if you get to level two, we'll give you access to new token so anything new that we support for the first time, and as you know, Tony,
we've had a very ambitious listing program this year. You will get access twenty four hours before anybody else and that's a that's a really significant advantage because one of the key differentiators for Uphold is that we not only source liquidity from centralized venues, we source it from DeFi. A lot of important new tokens appear first in DeFi,
so we support tokens before other centralized platforms. So being able to get in twenty four hours before anybody else on Uphold because your level two in our awards program is a really big deal. I'll give you an example. We were first to support Turbo a little while ago. We supported it eight months before Coinbase, and by the time it listed on Coinbase, Herbo had gone up by one percent. Another more recent example is virtuals, which is
a very interesting project. We launched that. We're still the only place in the US among the major ce FI platforms that support it. It's been on our platform for seven days, it's gone up by sixty five percent. So the point is being able to trade these new tokens that we support before anybody else gives you a sort of major trading superpower. We think that's going to be a big deal for people. But the third level of
the rewards program is about education. You open the uphold out today there are like three hundred token It's a bewildering offering for anyone who's new. And as you probably know, we operate a research department where we spend a huge amount of time trying to identify tokens with at least the potential to create fundamental value. Typically because they're solving a problem in the traditional world of finance, they've got
a very precisely defined problem. Good team third level of rewards gives you access to their research papers, which helps you to identify important new tokens that you should at least do further research on yourself, because our research team see them as particularly promising. We're not doing due diligence. We're not recommending them, but we're giving you a place
to start, a place to navigate from. So the rewards program is basically up to five point two five percent on stable coins twenty twenty four hour early access to new tokens and access to our research report library, And unlike on a lot of other platforms, we've kept it really really simple. We pay out the rewards in US dollar stable coins. We're not paying you out in platform tokens that you then have to trade and they charge a big fee on the trade. So the payout is
in stable coins. There are no complex tiers, and you get to access these rewards by doing really simple stuff. You just have to log on level one, you just have to deposit fifty bucks, Level two, you have to trade fifty bucks Level three, and we've had it open now for twenty four hours. Looked at the stats this morning, four hundred and seventy six thousand people have participated, so really easy and simple to use.
I love it and I love as a user myself. I love the incentives and the education part and the early access to different tokens. I think that's definitely a major win. So with regards to the different stable coins, you mentioned r l USD, which was announced I think yesterday that Uphol will be supporting and so on and so forth. You mentioned that is five percent and that is starting in January.
To confirm starts from January. R l USD you'll be able to one rewards from from January first.
Now, with regards to the yield that is earned, is this how is that generated? Because I'm sure folks are going to want to know where's the yield coming from.
It's a great question. So it's coming from our balance sheet with funding this ourselves, so you know, there's no funky things going on with assets behind the scenes. You know. Is simply saying this is a great way to spend our marketing money and allowing people to earn rewards on stable coins. People put their profits into stable coins, they use it on DeFi. So we're using this as a
b acquisition opportunity for uphold. You can earn on USDC, for example, we're paying five percent coinbase I think are paying four point three five percent when I last looked, So these are these are really good rewards. They're funded directly from our balance sheet, and we're able to fund it because what we find is when people hold significant balances of stable coins, they transact more, so we generate
far more transactional revenue from their activity. So really it's a way of rewarding people for holding dry powder on the platform and making it attractive for people to hold it on the platform.
And do you have plans eventually, and it may be too early to answer this, but to add more stable coins, because it seems like there's going to be a lot of stable coins in the market.
There is, there's this huge proliferation in stable coins, and I think I think our feeling about stable coins is, I mean, it's fundamentally central bank money on blockchain rails, but it's issued by private companies. So you just need to be you know, as a retail as anybody, right, you just need to be super selective about which ones
you choose because they all do the same thing. You want to make sure that it's being issued by a company in a highly regulated jurisdiction in a highly compliant way, and it's properly backed, and there are transparency features and there's a strong regulator above it. So you know, we've it's too complex for us to administer rewards on all stable coins. I think we currently support ten, so we're starting with rewards on four, you know. And r l USD, I think is a really good example of a stable
coin that we like. You know, it's it's being issued by a trust company under the ny DFS, meets rigorous complete client standards as a monthly audit report. It's from a reputable company.
You know.
For us, that's like tick tick tick. Yes, we absolutely want to offer rewards to customers who perform certain activities on that stable coin.
And then with staplecoin legislation possibly around the corner here in the United States, and we know it has already been passing the EU, how's uphol prepared to navigate those waters? You know, there are significant changes to how stable coin operators or issuers can operate.
Well, it's a it's a it's great question. So I mean we've we've we've had to remove tether, for example, in Europe because tether is not acceptable in Europe. So we're a highly compliant company. We follow what the regulatory guidance is in each of the jurisdictions. And you know, we're very familiar and we're actually a licensed EMI. So electronic money institution in the UK about to be Europe too, and that set of rules basically regulates electronic money. Stable
coin is electronic money. It should be regulated in the same way so that people have a high degree of confidence in it, you know, and I would be very It's funny you still occasionally see stable coin offers of you know, earn forty percent on this stable coin. It's like, no, no, no, stay away. Just go to stable coins that are issued by a reputable company and a highly regulated in a highly regulated jurisdiction. In terms of uphold on stable coins, I think twenty twenty five is going to see a
massive wave of innovation. We very much believe in a multichain future. We see a big part of our role as being a bridge so that you can send stable coin payments irrespective of what network, you know, stripping away all the wires and the complexity. We just make stable coin payments easily. We currently support ten stable coins on forty networks. By the end of March it will be on twenty eight networks. So we think twenty twenty five is really going to be the year of stable coin adoption.
For payments. We're seeing a lot of inflow from cross border remittance companies, cross border global freelance payment companies, treasury management companies who are adopting blockchain now to move money, and they're coming to us because we can provide a suite of licensing, access to bank rails and one hundred and fifty countries, and licensing for crypto. I mean, my own opinion is stable coins are the killer use case for crypto. There's been a wonderful in different pieces of
the jigsaw have come together, relatively recently. Regulation in twenty five money centers around the world, increasing multichain functionality in community, and adoption by real world companies now that the regulation is there. And I think, you know, the fundamental value proposition send a dollar anywhere in the world in less than a second for less than a cent is just like, yeah, obviously that's going to take off.
Yeah, it's It's fascinating and I'm actually very curious when big retailers like Amazon and these folks we're going to are going to start integrating it. I'm sure it's around the corner, but it's just a matter of timing.
It is, I think. So you think, you know, there are so many industries which are really low margin, in industries where the net margins of the companies are like seven, eight, nine, ten percent and they're paying out two to three percent
to card companies. At the moment, you know, being able to strip away that part of your cost space with a much cheaper form of payment that's inherently global, fast and cheap, I think it's just inevitable that things are going to go in that direction, and I suspect much faster than we think, because now we've got the sterilizing factor of proper regulation.
Now, I didn't want to ask you about USBC. I'm familiar with p y U sc PPAL or l U S d Ripple, USDC Circle.
What is USBC usb C is.
A US dollar blockchain issued by a company called Hardyaka, and it's on a permission blockchain, which we like, so that everybody who touches that stable coin has been fully ky seed and it's part of a much wider project that they're building out, so i'd encourage you to visit their website. We really like it because it's clean sheet
of paper, fully permissioned blockchain. Every single person has been, you know, been through a KYC process, so it's incredibly it's incredibly rigorous and and sort of clean, clean sheet of paper, and there we are getting. We are offering five point two five percent on USBC.
That's pretty high. Yeah, I thought that.
I was like, wait a minute, I haven't heard about the stable coins. I definitely have to ask you about it. So that's awesome. I'll link to that in the descriptions of Folks can go read up and learn about it.
Now.
In regards to availability in different markets, which market is this rewards program available.
In the rewards program is available globally, so in all of the markets we operate in, we support different assets in different territories, so not all of the stable coins will be available in all of the same regions, but the rewards program is inherently global, and I mean, one of the things we're very excited about is we've got a big felt following in Latin America, so you know, for using a lot of Latin American countries, they'll be able to access the US dollar, they'll be able to
preserve purchasing power in the face of you know, in some of those territories you've got very high inflation, and you'll be able to earn interest on this US dollar stable coin. So very very appealing to people in high inflation countries, and we're already seeing that kind of take off for us. And you know, it's a cool part of our philosophy that we want to offer borderless finance give people access to services around the world that they
can't easily get from traditional finance in their region. So being able to access the dollar on blockchain rails and earn up to five point two five percent interest for people in a lot of countries, that's massively attractive.
Absolutely, And in addition to being able to earn the rewards, they can easily move money cross border if needed, faster, cheaper, instant settlement, So you get all these great benefits and and bypass maybe the legacy banking system which has been slow. You mentioned hyperinflation and all these things. So it's a win win, it is.
It is. It's an offer that we've wanted to make for a long time. We wanted to have a rewards program to reward our loyal customers, but being able to offer rewards on stable coins as part of that program and in return in return for doing such very simple things as logging onto the app, depositing fifty bucks, trading fifty bucks. You know, it's a very easy to access a universal program.
Now in regards to the process of logging on and trading, are there is there like a cut off date throughout the mind? Like, how do you guys track that? So let's say I decide to log in December thirtieth.
Yeah, so a really nice feature of it is you can literally log in December thirtieth and you'll get rewards for the whole of the month of December. Can do it at any point during the month.
Oh that's great, Okay, I like that. A lot of flexibility there, Okay, awesome. I know you guys did a lot this year in twenty twenty four with the USD interest accounts, obviously launching the rewards program. Anything you want to highlight that's on your roadmap for twenty twenty five.
Well, I just looking at some of the stuff we did this year to start with, I mean, we had a phenomenally strong year. I mean, our business is more than doubled in size, and one of the core benefits of Uphold is we bring you important new tokens before anybody else, So we had a whole slew of important tokens this year. The launch of the USD Interest Account allows people to hold US dollars in the Uphold app The funds are actually held by a US broker dealer
part of a cash suite program. You can earn four point six percent on those dollars and you can trade them direct into Bigcoin, completely seamless access. And it's a the FDIC insured account and it's insured up to two point five million fd ICE in insurance. That has taken off spectacularly for US because you know, particularly if you're a wealthier client, what an incredibly convenient and safe way to hold dollars that are immediately adjacent to the trading venue.
In terms of what's coming up next year, there's a whole bunch of stuff. It's going to be a very very busy year for us. So we're going to be very focused on payments. So beginning of the year, US customers will get bank account credentials. You'll be able to send make payments to people cross border using a really interesting combination of stable coins, multiple blockchain rails, and programmatically
created unhosted wallets. That's a huge program. We're going to allow people to deposit their salary into Uphold in any combination of digital assets or fear that they wish, and that can be done on a dollar cost average basis. You'll be able to get paid your paychecker day early. So there's a whole range of neo banking features coming that helped crystallize this vision we have of our consumer wallet is a crypto enabled neo bank, and the payments
side of it is extraordinarily important. Also, we're going to make setting up on Uphold account radically simple, radically simpler. We're going to allow people to basically set up in the US by giving their phone number and then within four steps you can have an account that comes in January. So much value derives from convenience and ease of use, and there's a lot more to come next year.
That's exciting and Simon I I'm a user of the platform and I really appreciate all the board things thinking initiatives that you guys are have been putting together, thinking about your customers. It's really really amazing and I'm a benefit sure of that as a user has mentioned, so really great, Jenny. Yes, I've been for a very long time. I remember the first time I came across Uphold because I wanted to buy XRP and I remember Greg Kid
I think he was talking about it. This was back in like twenty eighteen or something like that, and I signed up for Upholds. I've been using you guys for years.
Oh fantastic. Well, USBC comes from Greg Kids group of companies, so you know, oh yes, yeah, So USBC is is issued by hard Yaka, so it's you know, it comes from a really well regarded company.
Oh yeah, for sure. Yeah. I love that.
On Uphole you can swap between different assets. It's like you can go between gold and crypto and Fiat and all that.
It's so easy.
Yeah, forget you know, we don't have the concept of trading payers. You can trade in one hot between any any digital asset or any physical asset. The other thing I want to flag is from Q two. We have US equities in the Uphold app in the United States, which will be the first time, so we're offering US equities through our US broker dealer, and we're thrilled. We've been working on that for a few years. Again, the
whole concept is money and digital assets. That they're all digital information, whether it's money or asset, they all live on ledgers. Therefore you should be able to trade between them. The asset should be fundible. It's just digital information that should be sent and transferable as easily as email. That's the vision that we're pursuing.
I love it. Let's talk about the crypto market.
Last time, you and I had a really great conversation about where things were at, and I remember you talked they the opening interest around bitcoin, it was around ninety thousand. Well, you know we've blown past ninety thousand. We touched one hundred and seven thousand yesterday. Simon, it seems like twenty twenty five is going to be a boom year. You get a pro crypto president, pro crypto Congress, a pro crypto sec charit that's coming in in addition to a
bunch of other folks. What are you expecting in twenty twenty five?
Well, I think I spoke to you just before the interview, right where I said I've been speaking to our head of research. He's normally really conservative and usually comes up with lots of caveats about how the market is about to correct his view, and he does not know the future, so do not take this as investment advice. His view is you've got a perfect combination of different factors. You've got multichain technology coming together, you've got clear regulation, you've
got corporate adoption. You look at the top one hundred banks in the world. We looked at it the other day, ninety six of them have blockchain teams. So this technology is it has now reached a degree of excess, and it's sort of reached that tipping point I think where people understand that. Look, this is a revolution in computer science. It puts an infrastructure layer over the Internet which allows the secure movement of value, which has so many applications
in a globalized world. And what's been missing is clear regulation. And now you've got it in the EU comes in June next year. In the UK, you've got a very pro crypto government and the FCA is about to make crypto a directly regulated asset class. Up to now there's been an AML registration, but they're about to bring it in from I think from January twenty sixth. It's the
last I heard. There's a consult period of consultation in twenty five, but clear direct regulation from twenty six And now we've got the prospect of a clear regulatory framework in the United States. And what the difference that makes to a business like US is A wee can plan but be we just have inbound inquiries now from corporates where thereas before, you know, you really had to go out and hunt people who were brave enough to you know, adopt the technology. So it looks, you know, it looks
pretty promising. And you've got a prospect of a federal bitcoin fund of two hundred million dollars. I mean, who would have thought that six months ago.
Yeah, it's almost unbelievable. The stars are really aligning here for our industry and asse a class. It's amazing. And A boy, I'm so fascinated by that bitcoin reserve because I know, of the United States makes some sort of move, it's going to trigger some a fomo globally, right, all the other central banks and governments are going to want to build their stockpile of bitcoin as well.
I think so. I think so. I was talking from to a regulator in the Middle East this week, and it was really quite an interesting perspective, which which was they've been a beneficiary of the US being uncertain about the digital asset space. Now they see the center of gravity moving away a little bit. I think they're worried about the central gravity moving away from the Middle East to the US. Now they're going to get their act together.
So that was interesting. And there's also talk of setting up central you know, central Treasury reserves the digital assets and these other jurisdictions, which I think is fascinating mm hmm.
And in with the other movement we're seeing with Tradfire is tokenization. I mean, you got Franklin, Templeton, Blackright, you name it. They are all tokenizing now, and they're tokenizing in different blockchains. They're putting money market funds. Do you can Do you think that trend continues and we're seeing we're going to see more adoption around that.
I do.
I mean, I think I think that's still at the experimental phase. I think what we're seeing is asset manage and financial institutions berimenting with tokenized projects. They're virtually all on permission blockchains, so it's very limited it's not true public blockchain tokenization, but it's important steps towards that goal.
And again I think for that part of the industry to go from experimentation to large scale adoption, unique clear regulation, and in many parts of the world that doesn't exist yet.
And then the other major item people have their eyes on is et apps. We have the big one in ethereom et apps, but there are certain, for example, features of the etherem METF that are not available at staking, which I think once that's added, it's gonna they're going to be FOMA around ether because you can get the yield. But then also people are looking for XRP, Salona, HBr et apps. Do you think we get additional ETF approvals next year?
Yes, in a word, I do think they'll be additional approvals. Yeah. I think making you know this these asset classes available through traditional financial instruments is going to be a growing trend. I mean personally, you know, I often have friends ask me, you know, should I what should I do? Should I do it through an ETF or should I do it correct? And I say, well, you know, this is a twenty four hour, super fast moving asset class. And if you want to buy an ETF if you want to do
it five days a week, nine to five. But it's not the same thing, right, you can't trade it as freely and as quickly as you can if you if you hold the physical asset. So I think they perform a role. But you know, I I obviously, you know, I prefer holding it natively because for all the obvious reasons, right, you can move it, trade it, hold it. Nobody can censor it if you hold it in something like volte or self custodial wallet assisted self custody wallet.
So yeah, yeah, I'm of the same mindset. I.
You know, if folks are like they're.
Maybe a bit older, like maybe my parents, I'll say, okay, go to ETF rout because I know you guys can't handle private keys and all these things, or even using an exchange necessarily. You know, they're more comfortable with going to the bank versus using online banking things like that.
You know, they'll prefer the ETF.
But the majority of people I tried to tell them understand the ethos of crypto and bitcoin it to be your own bank and to do what you want with it.
I try to point them in that direction.
But you know, we'll see maybe people go to etf rout and they're like, wait a minute, I can't move it. I need to you know what, I'm gonna go buy it directly from uphold or something like that.
Yeah. I just like the holy ethos of crypto, which is, you know, you are your own bank, yourself sovereign, don't let anybody else send see your assets. And I think the Vault product that we launched earlier this year, which gives people access to an assisted self custody wallet from within the app, that gives mainstream users self custody in a usable form. You hold two keys, we hold one key. We can't move your assets only you can move your assets.
If you lose one of those keys, you can come to us and we can create a new key by putting our key back together with your key. And it's just so ridiculously simple. And I've been thrilled with Vault. We've had tens of thousands of subscriptions from it, so it's been a really big hit for us. Here's a centralized venue that gives you assisted self custody in a
usable way. I think that's a big part of what we want to do uphold, strip away the complexity and surface a lot of the native benefits of black chain in a usable way for ordinary people.
Absolutely, Simon, a pleasure chatting with you. I love the rewards program and folks, you can check out the links in the description to go learn about all these things. Simon, thank you so much for joining me, and I'm sure we're going to have to do this in Q one of twenty twenty five as the market heats up.
Great to see you, Tony. Thanks for having me back.