Flexa's Plan to Get Crypto Accepted Everywhere! | Daniel McCabe

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go to vchain dot org. Link will be in the description. Hey, folks, welcome into the Thinking Crypto Podcast. I'm your host, Tony Edward and joining me today is Danny McKay, who is the co founder and CEO of Flexa. Now. Flexa is a digital assets payments platform. Danny, great to have.

bit about yourself, where you're from, your professional background, and how'd you end up founding Flexa.

my fourth startup. So I've dabbled in a few things here and there, but by far Flex is the focuslex Flex is the big one, so to speak.

analysis for you know what possible damages might be. And in doing that analysis, I kind of went down the rabbit hole finding out about these different assets and more importantly the volatility and the appreciation and everything else that went along with crypto. And then of course you learn about the technology. And when you do that, that was my Aha moment. That's when I was, oh, wow, this is going to change everything, and sure enough it has.

deep understanding of blockchain technology. So together they had this idea of how they can really replace debit and credit rails. Thankfully, they wanted an attorney as a co founder to help them build from the beginning. We wanted to build flex in the most compliant way possible. I knew that they wouldn't invest an attorney to be a co founder if they didn't want that to be the case. That gave me a lot of trust and faith in them. By the way, at an early time, this is eight years

ago now, it seems crazy. So yeah, so I eagerly took this opportunity, and knowing what I knew at the time about crypto, and knowing what I thought could happen, how the transformative this technology could be, particularly with payments, I was I was eager to join. That was That's how I got into it. And you know, obviously still here, still paving the way you.

right with all the things we've seen, some massive collapses FTX. Now we're in a very different environment, much more crypto friendly environment. What's it like looking back, you know, going through that arduous journey, you know, through all the ups and downs.

a BSAAML program before we built anything else. We became fins End registered as a money services business immediately. I started pursuing money transmitter licenses immediately, so now we have

licenses throughout the nation. We did a lot of things in the compliance and legal front from the outset in the beginning to make it through these eight years, because there have been quite a bit of challenges, not just with the FTX type stuff that drives the market down and weekends consumer confidence, but even what we saw with the SEC for example, in some of the hurdles they put folks through, including FLEXA was named in a complaint not as a defendant, but just referenced in a complaint

with allegations about our token which were patently untrue. So we had to deal with all that. We still have to deal with all that in certain arenas. So for me, we built it right in the beginning and those challenges made us stronger. And we look at those challenges as helping us find the next opportunity, helping us find the next reason to build and what to build. So you know, no complaints will continue to just push forward.

that's wonderful. I don't think anybody would have guessed, for example, in July, when Genius becomes law, that the market cap for stable coins would be where it is today. I think upwards of about three hundred billion or something like that. We have thirty billion of on chain activity on a daily basis. I don't think anybody would have thought this would happen this quickly with stable coins. But for us, it's not just stable coin payments. It's not just one

token or two tokens. It's not just one chain or two chains. It has to be everything. It has to be any asset for the merchants, from any chain for the merchants. It has to be that way, any wallet, any asset, and really anywhere, which we're excited to look forward to some announcements coming up next year on that. But for us, it's optionality. And I see a lot of our competitors. They may offer one or two or three tokens, they may offer one chain, They may require

their merchants to have their own crypto wallets. And if you're doing that, how are you helping the merchant. Merches don't want to hold crypto yet, they don't want to manage and hold in custody crypto yet. So we make it possible so they can accept FIAT and we can do that with our payment page product or payment link payment clips. We do that with our SDK that any wallet can embed, such that any Walt literally can use our payment platform in order to make payments with merchants.

So folks can use their walts to make payments with merchants. Honestly, it's optionality for the merchants, and we do it in a number of different ways, none of which costs the merchants anything. Obviously, we do the full integration ourselves. And of course consumers don't pay for our service, they just use the digital assets to make payments at many fortune five hundred merchants and growing.

We did compliance first, right, we had the BSAML program first. We do complete KYC ofax screening for folks that use our network. We're very careful because you know, we want to talk to regulators and make them feel comfortable, and more importantly, we want to talk to merchants and let them know we've got their back. We're protecting them from day one, so they don't have to worry about a thing. We take care of compliance. And I've taken that approach

internationally as well. So while I see some companies to suddenly roll out with the product in a foreign jurisdiction, we don't do that because we're protecting merchants. We only launch in the jurisdiction once I feel comfortable with my CLO that we're either licensed fully to do it or that we have a legal authority in some other way

to do it. So it's taken us some time on the international piece, but that's certainly something we're working hard on and I'm looking forward to to talking more about in the near term.

stable coins, I'm assuming you support the top stable coins and crypto assets. So if I wanted to pay with bitcoin or ether things like that, I can do it.

but there's tens of thousands of tokens today. We could create a token right now in the time it takes to do the next fifteen minutes of this podcast if we wanted to. So, tokens are popping up everywhere, and we never wanted to strip merchants of optionality. So we think all tokens should be spendable and We're going to keep it that way. So yeah, of course bitcoin you can spend on our network right now, ether of course,

light coin. All the token that folks want to spend you can spend, and even some that maybe they don't want to spend, like for instance, there's a lot of folks that think spending bitcoin is crazy, and that's fine, that's up to them. But yet it's been our top asset for spending since we founded Flexa in twenty eighteen. That is going to change. Folks are spending stable coins

a lot more now because the Genius Act. And I've said this before publicly, but I really think merchant loyalty points are going to make a huge play and merchants are going to have their own tokens. That to me is super exciting. We've been working with some super high end merchants and how to roll something like that out.

Walmart and Amazon say hey, hold on to witning. You can earn rewards like staking. There's a lot of possibilities here.

all this. You give merchants the Genius Act for stable coins, Clarity Act, so they actually know which tokens are commodities and securities and which tokens they can accept a safe manner. And then you give some to tax reform. So it was deminimus relief. At least when you're buying, for example, a cup of coffee shouldn't be a taxable event. Wow. I mean, I know we've been talking to emergants for eight years, and I personally know that is an explosive

moment for digital asset payments. It's what they've been waiting for. It's what we've been waiting for so while. We've been educating merchants, and I think we've talked to I mean, I have to honestly think we've talked to every fortune one hundred, if not five hundred merchant in the last eight years. I mean, over ninety percent of them has shown excitement about digital asset payments. It doesn't mean they're all ready to launch. We've worked with some of them

for five plus years getting them ready to launch. I think twenty twenty six will be big in that regard. Some folks are getting ready to launch, and a lot of that is because of Clarity. A lot of that is because the promise of clarity right now that they're really looking at it more seriously, so you you convert that promise into an actual law. I couldn't be more excited.

to grow as far as payments being used. You know, we got the Genius Act in place and so forth. Yeah, and you mentioned, you know there's some people, well good amount of people that use bitcoin. But do you think over time it becomes more so heavy weighted stable coins versus these other assets, or maybe bitcoin catches up because Bitcoin's price continues to go up, that spending a fee s of Toshi's it becomes like nothing because the price is so high.

stable coins are already accomplishing that. They're catching up quite quickly. I mentioned Bitcoin's always been the most spent token on our platform. That's changing quickly because of stable coins. And again I can't understate, you know, speaking with merchants, loyalty points and merchant tokens haven't even begun. Yeah, that's a whole new game, and that's going to unlock so much.

And there's you know, you can brainstorm, as you have already here today, how you can use loyalty points in the form of tokens and merchant tokens themselves to incentivize consumers, to reward consumers, and to increase payments. And we haven't talked about this, but you know, one of the things we've done at Flexa because we've built this payment platform the way we have, we've now opened up commerce for everybody.

No longer are you restricted from participating in e commerce because you don't have the right credit score, you can't get the right credit card, you don't have a bank account,

or your underbank or underbanked. No longer are those hurdles, which means instead of something like you know, seventy eight to eighty four percent of the population participating in commerce, now you're talking about ninety nine plus percent of the global population participate to participate in commerce through payments, which is also a game changer. So you combine that with what we're talking about in loyalty points and merchant tokens.

This thing is just it's too massive to even imagine right now, and that gives us a lot of excitement as this year ends we move into twenty twenty six. That gives us so much excitement about FLEXA and that's why we're heads down building as hard as fast as possible.

we're certain assets outside of Bitcoin. You know, Bitcoin like the most liquid acid in crypto. But like let's say you go down to listen, you're supporting some all coins. It may not be as popular, but when you get the liquidity. Are you working with different exchanges?

it serves cannot be understated here. I don't know that there's a Flexa without app, because what other folks are trying to do is build digital asset payment rails that are not collateralized, which means you give merchants a horrible choice. You know, they really have this problem, what if the transaction fails or what if the network fails. So some of these works are much faster now than they used to be, so unlike Bitcoin, it might not take you

thirty minutes anymore for a transaction to confirm. Maybe it takes you a second or less than a second, but that doesn't mean that network is going to stay up all the time. So how do you protect merchants the transaction takes thirty to forty minutes. Well, you can have that because you can't sit there with a cup of coffee waiting for a transaction to process. And you also can't have the risk of a network failing or the transaction failing in any way. So other digital asset payment

platforms say, hey, that's just part of the risk. But we've said at Flexus since day one is shouldn't be part of your problem, merchant. So the AMP token collateralizes every payment. The world's only neutral collateral token. It collateralizes every payment that fows for our network, so we can promise merchants they will be paid, not only promise, we can actually guarantee merchants, every one of them, that they'll

receive full payments. And we're the only payment platform that can do that because we're the only payment platform that utilizes the AMP token to collateralize payments. So, you know, this thing collect you wrap it all up everything I've talked about with any token, any wallet, what's happening with clarity, what's happening with merchants developing loyalty tokens and merchant tokens. The fact that our rail is completely collateralized by AMP.

It's a unique payment platform. It's the most unique payment platform. And in talking to merchants, you know, once they understand it, and sometimes it takes some time, it's really the only option. It's the only viable option.

we didn't mentioned the pandemic. I mean, that could have knocked us out, you know, but for some really loyal merce who really love what we were building, I don't know where we would have made it through that, because you know, we were a brick and mortar in store payments only at that point. That prompted us obviously to move on online. But yeah, it really took a grind from us and really heads down stuff to pull this off. And you know that's why I keep coming back with this.

This is the most excited I've been at Flexa since we started, and the future is unbelievably bright. We're just trying to figure out how to take advantage of it best.

you that and if I'm not mistaken. That's launching in twenty twenty six.

those payments. And for us that's critic important because it gives again merchants optionality. Certainly not required. Nothing is required from a merchant. If they want to take digital asset payments, they don't need a terminal, they don't need to do anything. We integrate with their point of sale directly, and that will always be true. It's just another piece to give merchants optionality, so they'd accept payments in that way if

they want to. And it may be a critically important piece because folks are used to that and I like to do that, and some merchants want it. So you know, this is the truth. If a merchant wants something in this space, We're going to deliver it for them.

brand and a following, and you have network effects. So how do you You may have touched a bit on this, but how do you navigate that to say, hey, look there's a big demographic that's backing this coin. It's the craziest thing ever. But there's people hold it and merchase want to accept it, so we're going to facilitate it.

committee at Flexa. So every token that we allow to be spent on our platform has gone through not only the coinbase and Gemini review, but our Flexa internal review before it gets to the point where it can actually be spent. Other than that, honestly, it could be anything. It really could be. I mean, I draw the line at hate speech. There's something that's promoting hate speech or something like that. As long as I'm CEO of Flexa,

nobody's going to be able to spend it. But other than that, no, if it's popular, if it's doge, or if it's something that folks get behind and they love it, even even no one's asked, but even furt coin, you will make it spendable if enough people want it to be spendable, and more importantly, if our merchant wants it to be spendable. Yeah. So, yeah, we don't want to limit this. We built this so anything digital can be spent,

and I mean it that way. I mean, even you look at tokenization of assets, which is going nuts right now. I think right now you're kind of in that post pilot, early production phase of tokenization of assets. But that's happening. I mean, most major banks, most major even real estate companies are looking at tokenization of assets in a very real way. There's no reason why tokenize assets. If they can be traded, they should be able to be spent, and they can be We're already built so they can

be that flexous. So this is just another example of building flexa the right way. So any asset, any digital asset, can be spent. And that's again for merchant optionality primarily exciting days.

it's you know, from a brand resonance standpoint, it's on point. Now, if you're a Fortune five hundred company, you may not want to accept far coin, right, but hey, that's okay. There's different verticals, different cohorts right as it would.

bitcoin at point of sale. The merchant could take light coin, they could take any asset they want because of our platform. So if it's it's USDA USD one day and ether of the next and bitcoin the next, that's fine by us. So truthfully speaking, someone could spend four coin and the merchant does not need to hold that.

costs this country two percent of his GDP annually. Seven hundred billion dollars annually is a social cost of payments on those broken out of date, analog, really antique payment rails. So those should have been gone a long time ago. We think you're at flex so they have a shelf life of maybe ten to twenty years and then they're just gone. And we're doing everything in our power to make that timeline come quicker.

call today, or how you send a text message. You just do it. No one's wondering what that technology is, or how do you build that? No one today. Everybody wonders about crypto. How does this work? Why is this working? Is it safe? It's scary. This is a scary thing. I thought it was for you know, money laundering and funding terrorism and it once they learned that, no, no, no, of course, any asset can be used for those things, but crypto is probably the dumbest asset to use for

those things because it's all public and unschained. But once you start to educate folks and they learn about the technology, how much faster it is, how more inclusive it is, how much safer it is, the privacy protection features this which we haven't even talked about. Every bit of it is better. Merchants are learning that. Most merchants already know that. They're just rolling it out over time. Consumers won't even know. As the UX gets better, consumers won't even know what's happening.

It's going to be as easy or easier than their current payment flow to be faster, you know, just work, and it's going to be better. It already is better. It's just not fully adopted yet. So by twenty thirty five, I think it's completely taken over payments. I wouldn't be surprised if you know, the visas, amexs and master cards of the world have gotten a board too late. Everything

they're trying to do right now isn't crypto payments. It's it's it's crypto on roads and off ramps, using those ancient analog payment rehels, which are broken and costs the seven hundred billion dollars annually nobody wants. Nobody wants. So yeah, I look forward to twenty thirty five and maybe sooner.

We've been refining a few things, so whether it's payment pages, payment clips, payment links, there's a number of different ways merchants can accept digital asset payments through Flex's platform and with what we've done on our SDK, so any wallet

can integrate and use our payment platform. We really feel like we're in a good place now with merchants and as they learn more about AMP, which takes some time, because again we're the only one collateralizing payments and that's a weird topic right by the way, all your payments are collateralized by this token called AMP that folks can buy globally and pledges collateral. There's a bit of a break there. Wait, how does that work? How does that

possibly work? So by the time they learn or it's you know, to a merchant, they absolutely love it, but it takes time to educate. But for us, what that means is it's just this twenty twenty six should be just this year of bringing merchants on, turning them on, getting them ready new jurisdictions internationally, with new merchants and new and bigger merchants here at home.

but it's something that I'm waiting to see someone solve, and that is micro payments for streaming and web monetization and so forth. Is have you guys thought about anything like that.

any format, in any ecosystem. We've been building that for two years. I said this in a post once and I exposed that we you know, we were processing stable coin, but it's five to six years before anybody else was, quite frankly, so when Genius rolls out, that was kind of old news to us. We've been stable coins we used for payments on our platform forever, and I think we're about five years ahead of everybody else on the other payment ecosystems that exist out there, which for us

at Flex is hugely exciting. It's exciting for our merchant partners, and it's part of the reason I look forward to twenty twenty six so much.

anti crypto for a long time. Now they've completely done A.

in twenty eighteen, twenty nineteen. So, y know, we all know the famous ones who say they ate crypto. Well, they've been building for ten years. So I'm not shocked by any of this. I don't think anybody should be. They're not only ready, but they're gonna launch all of them, and they know they have to because it's really simple. They know the technology is better.

stable coin right now. It's built though, in genius especially, you know, without going into the nitty gritty of the regulatory details, it's really hard once you get past a certain threshold if you grow too much, you know, for you know, it's a bit different than being regulated like a bank, but not that different, right, It's it's really hard to get to that level and succeed. So there's a bit of a first mover advantage in place for

the usdcas and tether of the world, et cetera. But you're going to see stable coins.

enough to really use it. And that's what's gonna happen with clarity. So you go back to that, and that's why you're seeing what's happened with stable points happen. So to your point, there's gonna be a lot of them. Some of them are gonna be bigger winners than others. But I just see it as such an open space for creative minds that great things will happen.

the industry is a lot of crypto companies going public. There's expecting to be more in twenty twenty six. You get the SEC chair talking about making it easy and so forth. FLEXA have any plans along those lines that you can share.

It's just for merchant optionalities, helping them thrive in the next air of commerce. And someday in the future, if we achieve this great goal of replacing debit and credit rails with a far better piece of technology that helps merchants, I guess we'll take a breath and think of options then, but not right now.

just try to be really careful. Again, it's not because I want Flexi to be protected, It's because I want merchants to be protected. So maybe we're going to roll it out kind of carefully and thoughtfully, but it is something we're focused on.

questions here for you. Sure, first, if you could create your own metaverse, what would the theme be?

not evolved for this office in Manhattan. We're not here, We're not supposed to be So for me, it would have to be something in nature, Definitely, something in nature, something where I can go fishing in nature.