Stablecoin Payment Adoption is Accelerating! | Rob Morgan

favorite is the Treasure Safe five. It's a beautifully designed and easy to you whose hardware wallet guys, and it's my go to and they support a variety of coins, all your top crypto tokens, your big coins, your x rpe Ethereum, Solana and much more, and even new coins, even black Rock's Biddle token. So they support coins on the institutional side where you have tokenization of different assets and much more. And they even offer a great service that helps you to get your treasure device set up.

You get one on one customer support from their team, so you can check that out as well. So once again, I'm a big fan of this hardware wallet. So if you'd like to learn more, visit the link in the description. Hey, folks, welcome into the Thinking Crypto Podcast. I'm your host Tony Edward and joining me today's Rob Morgan, who is the head of stable coin strategy at Pioneer. Rob. Great to have you, hey, Jony, Thanks for having me. Yeah, Rob, excited to talk about payments and stable coins and this

brand new world that we are all immersed into. But I'd love to kick it off with your background. Tell

us a bit about where you're from, where you grow up in your professional.

help them innovate move faster. So I spent twelve years at the ABA, where I built and led our Office of Innovation. So that meant doing really three things. One was helping banks work with new stage startup to see what new technology was coming, how can we integrate that technology create partnerships. Two, we actually ran a corporate venture fund to make investments that in technology that we thought

was beneficial for the banking industry as a whole. And then three was trying to push for regulatory clarity to help banks actually move forward in the space and open up the path for banks to do new and innovative things. Which is which is not always easy in a highly

regulated environment. Absolutely, and so you know, talking about your role of looking at innovation and helping these banks to look at these different technologies and the emerging technologies and so forth, at what point was your encounter with crypto or blockchain tech? And at that point it maybe could tell us how did you come across it and what was your like your next steps after you had like, let's say your Aha moment to say, hey, banks, this is something you need to look at.

by typically one of three companies. I think you know, something like eighty five percent of the four thousand, seven hundred banks in the US run on one of these three systems. These systems typically and traditionally were closed well ecosystems. And we had this moment where a banker was telling us that he had asked for API access to some of his customer data and the response he got from the vendor was, what are you going to do with it? We need to know so we know how much to

charge you for your own data. And that was sort of the aha moment of the banking system being built in these proprietary ledgers that even the bank themselves can't access. How powerful having that distributed ledger technology could be in creating something that is modern, that is extensible across the whole ecosystem, and that can facilitate open innovation in a way. This sort of traditional banking core model really could.

of banks seem to not want to embrace this technology. There was a bit of knee jerk reaction, well, well we don't like this, and you know it's used for money laundering and so forth. But now we now in twenty twenty five and even you know, most of last year, a lot of these banks are integrating blockchain, building their own private permission chain connecting to public chains launching stable coins, custody,

you name it, tokenization and much more. What's it like to see, you know, the banking sector embracing this technology, So it's really exciting.

helping them build a better future for financial services. So no surprise that the industry has by and large come around. My focus throughout the years has always been how can we help banks embrace this new tech use it to build sort of a more open and better future together. I do think you always with any field, you see concern around what does this mean for my existing business? And the players that you see push back and try to push competition out often aren't the ones that survive

in the long run. I will say in the banking space, there are a number of bank CEOs I've talked to throughout the years, even since that sort of twenty fourteen moment who have said, look, how do we use this to create the bank of the future, as opposed to how do we push it out? So my view is that lens has always been there, even if there was a point where this felt new and scary and we

saw pushback from the industry. I think it's only natural that as we get regulatory clarity that will allow banks to move forward alongside some of the non banks in the space, you're going to see the banks lean in and really try to embrace their ability to use this technology to better serve their customer.

and mortar locations for banks because the majority of people are going digital right, they can do a lot of their banking on their mobile phone or their desktop, and stable coins and come along. You know, how do you see banking This is a hard question fifteen twenty years from now. Is it a continued trend of less brick and mortar. Yes, there's still going to be some, but

there's more decentralized finance. The banks are facilitating this, and there's more global lending and credit markets and things along those lines that's accessible to the everyday person.

maybe three banks. And so it's really easy when we say, you know, banks in the US, to think of monoliths sort of the large banks that may be more of us engage with or that own a large chunk of the market. But the reality is, with the diversity of banks, you have community banks that are embedded into those communities. While some of those services will move digital, I view stable coin, blockchain and crypto generally as something that can

empower them to better serve their communities. So those institutions add real value. Right if there is a farmer down the street that needs a loan, they may have the ability to know in this community this credit looks this way and to make a loan that no one else in the world could because they're there, they have that relationship and they're based in that community. That is incredibly powerful. I think it's a benefit that our system has as

we digitize. I think there's an opportunity to leverage what makes those banks great, supercharge it by lowering their costs, given them more flexible infrastructure so that they can go deliver financial services faster, more efficiently to the communities that they serve. So in my mind, similar to I think we always think of Excel has always been part of banking, but there was a period in time where all the accountants were very nervous that Excel was going to put

them out of business. The reality is that's just not true. Right. What we've seen through wave after wave of technology is that it's often an empower that lets us get back to the important relationship based pieces of the business. I think the distributed nature of blockchain creates some new opportunities for some of those services to move totally digital, and

that's awesome. There's new markets there. There are also opportunities for sort of the high touched local model that I think will help banks be more competitive, not less as we move forward.

So Payoneer works with SMB customers, helps them reach new markets, collect payment in those markets, manage their funds globally, and pay out both their employees, their vendors, and all of their other costs in the markets where they operate. So in many ways, Payoneer is the original stable coin, right. We collect funds, we give the customers that pay in your account balance, and then plug it into the way

that they do business across the world. We are sort of deeply and carefully watching the stable coin space as our customers begin adopting stable coin, as we see the transition of stable coin from those cryptonative use cases into real, real world use cases. We want Pioneer to be able to help our customers engage with this new form of payments the same way that we do every other currency

every other market that are our customers engage in. So we're watching the market carefully, keep an eye in the space I think we'll have more coming in the coming weeks and months here.

complexity in the FIAT ecosystem today. Our view is that stable coin is a really powerful tool to speed up to add transparency to global commerce. But for many of these businesses it doesn't actually simplify right the need for on ramping stable coin into a wallet, for managing a wallet and keys for being able to send receive into that wallet, creating interoperability with other currencies, other markets, and

then ultimately off ramping. There's a lot that needs to be done, and so our view is that Pioneer's role is to help our customers operate their business without having to think about where and how the money is moving. We think there's an opportunity for us to simplify that complexity in stable coin the same way we do in FIAT today.

vision of the future. That's where it becomes really exciting. And so as we see real world integrations where stable coin is not being used because it's cool and new, but where it's actually solving someone's business problem today, that's where we get excited and that's where we think we can help our customers. So I think there are sort of two main developments that are pushing that adoption and the use of real world of stable coin to solve

real world financial services problems. The first is the passage of the Genius Act in the US, the additional regulatory clarity and the certainty around a framework for regulated money in the stable coin and blockchain space. That's a huge advancement as someone who spent a big chunk of the last few years trying to be able to adopt this

technology for banks to solve their problems. Without that regulatory clarity, it becomes really hard and it becomes really hard to interoperate with the other systems that those businesses use every day. The second is sort of market clarity that follows that increased adoption and the ability to have your customers or your suppliers operating in the same medium, The ability to have that sort of embedded nature. I think YouTube is a really interesting one. The ability to embed those payments

in a way that existing rails can't. Right, it's not just that this is faster or cheaper, but it's a totally new rail that can actually help operate at a code level, the way your business operates. And so, in my mind, these payments innovations stable cooin incredibly innovative, but it becomes most useful when it actually does something that other rails can not, just does it a little faster or a little cheaper.

of those options today. We already have digital dollars in the form of bank deposits. They might all be denominated in USD but a dollar at JP Morgan is not the same as a dollar at City and we have multiple form factors for that money today. I don't think stable coin changes that. So I think we will continue to see a proliferation of different stable coins that are use case specific, that are maybe held in different ecosystems.

But I also think we'll see groups coalesce around major chains, major tokens for types of transaction.

working like the FX market. Everybody has their own digital version of their fiat currency and there's interoperability or an upgrade version of the FX market.

a global tool to make commerce easier. So I'm optimistic that I think USD stable coins will continue to play a really key role. Now the question becomes how do those then interact with the rest of the world where payments, prices, etc. Aren't done in USD. I think what we start to see is a world where there are multiple tokens in those jurisdictions. One of the big challenges we see today for businesses that operate globally is the ability to offer him.

So if I am a business in Vietnam that is paid in stable coin, I might have USDC in my wallet, but my costs are Vietnamese dong in my local economy, and so a real challenge in the adoption and use of stable coin globally is, as a business that wants to get paid in this new form factor, how do I actually take it and operate my business the way

I do today? So importantly like today, their best option is to go to an exchange in Vietnam, hope that there are enough buyers of USDC for Vietnamese dong to complete the transaction, and then wait for those funds to settle in a local bank. Then finally they can use that to pay their employees to go buy materials. I

think what we see is a few options right. In some cases there will be better infrastructure for those businesses to accept USDC and convert them to Vietnamese dong, where I think we will start to see more proliferation of new denominations for currency is as off ramping tokens, So I think we'll see increased use of say Vietnamese dong token that exists in that ecosystem that helps facilitate the move from USDC into that local economy and facilitates that

sort of off ramping into the various jurisdiction where those businesses open.

stable coin? Today? Payoneer helps global businesses that collect money abroad, manage it and pay out in one hundred and ninety markets around the world. So we have incredible call last mile reach to be able to deliver fiat. I think that's one really important piece. Two is the customer relationships that we've built, the partnership that we have with our SMB customers. We have huge reach into that market that is just starting to see adoption in the stable coin space.

As we've seen in stable cooin broadly, distribution is in many cases what determines winners in this market. We have distribution into key corridors where there is product market fit

stable coin. The third is compliance. We have built a global compliance infrastructure that allows us to onboard customers around the world in a way that is consistent with the expectations from US banking regulators, so that those companies can access the banking system and importantly, the nexus that exists in the US today, so as I think genius raises the bar for everyone, we have the ability to help bring those customers into this ecosystem in a way that

is consistent with regulatory expectations. And I think the last and most important is the simplicity. As we see the adoption of stable coin. Our business today is simplifying payments around the world, making it for our customers so it just works whether payment is in JPY, Euro, usd We think that there's the ability to further simplify this. I doubt that in the future there are businesses that will purely exist in FIAT or really exist and stable coin.

The question is going to be how can you simplify across both and allow businesses to engage seamlessly around the world. So we think Pioneers really well positioned to answer what I think are those sort of four key questions for adoption of stable coin for cross border commerce.

the partnership lets us serve our customers more reliably. We use their blockchain enabled treasury transfers to get faster transaction, speed, automation, transparency. The blockchain sort of reduces the cash management FX risk, all of those pieces that we have to consider it and adds efficiency on the back end that we can then pass along to our customers. Are you able to disclose if you're working with different banks or cities like your primary partner in doing these so Panier works with

the network of banks around the world. City is one of those banks that.

Genius Act, such as stable coin yield and rewards. You know, giving your background, the ABA will love to get your thoughts about what happened here and kind of the re litigation. You know what the banks not really paying attention to that, and do to have valid concerns possibly like a lot of funds leading to banks and going into stable coin platforms where people can earn yield.

rolled out or done responsibly, that there isn't sort of a gap in oversight that would otherwise exist. So there's always a debate around this. I've spent a good chunk of the last few years testifying before Congress and others trying to help think about how we create a responsible regulatory structure for this new form of money. There will be I think, hotspots throughout that debate, and it will

be ongoing. But I think most importantly what we see is really continued progress and continued buy in on ensuring this new path exists for banks and non banks to leverage this technology in a safe, responsible and regulated environment. I think we've seen both the clarity that comes from that regulation create more enthusiasm in the market. We've also been really encouraged by the move's bank regulators have made to move quickly on implementing that. I think that path

creates additional clarity. I will say what we saw during my time at USDF was a lack of clarity around how both banks and non banks could leverage stable coins right. The lack of regulatory structure meant that when you went to a banking regulator as a bank, you were told well, ask again in about six months or we're thinking about your response. And as a bank, when you're told effectively noet veto through through a non answer right, you don't

feel like you can participate now. So I think in some ways there's a concern that from the banking industry, if we can't adopt this technology, others will and we'll be left behind. In my mind, the right answer is to enable everyone to adopt this new technology and compete. We certainly need to make sure the right guardrails are there to make sure this is well regulated, well protected.

But let's create a regulatory structure that facilitates responsible innovation, allows those into market, and creates a level playing field.

waiting and watching here for sure. Rob. You know, you have a lot of experience and the payments sector and the history of payments and so forth, so I'm curious what your outlook is for the future of payments and how stable coins and crypto might be integrated into the sector. So let's say it's twenty thirty five, am I going to Starbucks paying for a coffee? Not necessarily I'm choosing to use a stable coin, but stable coins may be powering the movement of the money behind the scenes where

my credit card or whatever app I'm using. Is it something like that?

the customer can go execute on their ambition. Right, if it is a small business, they wake up thinking about how can I sell my customer's product that adds value to their lives, not how do I manage financial services on the back end. And so in my mind, in ten years, stable coin has the opportunity to help simplify some of that complexity. There's a lot of work we all need to do to make that the case, but I think it's a few things. Right. Money disappears into

the background. My business just continues to operate. Money is the operating system that a lot of that business has to work on. So you know, if I go to Starbucks, I probably don't pick stable Coin. I may not even think about it. I may have just told my AI assistant that I'm going to be at Starbucks in two minutes, and it may handle the transaction on the back end.

And so I think the more that we can integrate payments into the flows that businesses and consumers use every day, the more that we can abstract that complexity, take that away and create a system that just works. That's where we went. That's where we create real value when businesses don't spend time on payments but spend time talking to their customers building better products. That's how we when I think, that's where the ecosystem really delivers on its promise in

the next five, ten and fifteen years. And do you think with the instant settlement aspect and stable coins running in the rails of the payments networks and so forth, that people would get paid daily? Now, you know we'll have to upgrade legislation and infrastructure and so forth, But that because you have instant money, people can get paid on a daily basis. Why not even by the minute? Right?

I think there's all sorts of models when you lower some of the facilitate smaller and smaller transactions, or you enable a lot of new different sort of payment methods, et cetera. So I won't get out, I won't get into the legal structure of how payments or how salaries are paid. Right, I have no special view on that, But what gets me excited are things like the ability for micro transactions to help better unlock value as it's

being created. So you know, if I have a website, maybe I can get paid per visitor, per click, whatever, and it's not one payment at the end of the month, but the minute that I generate some value that someone used my content, that someone consumes one of my services, even if it's just one minute of browsing a page, you can create a fraction of ascent of a transaction that goes along with that in real time and gives someone access to the payments that to their earnings in

real time. Maybe it's an Uber driver who gets paid by the minute and sort of sees those those funds add up in real time in their account. Right. I

think there's a lot we can do. Most importantly, I think a big piece of the future of global commerce R the SMB of the future is probably AI based, or at least has a heavy AI component, And so having a system like stable coin that at a code level can work with these new technologies, with the new bit with the businesses of the future, help facilitate moving value along the same way that we're seeing an evolution

in the way that those buses misses operate. And I think stable coin has the opportunity to make sure that payments keep pace well.

along those lines. I would love to get your take on that market. And is payoneer looking to integrate tokenize assets in any.

days at USDF working on tokenized deposits. I think blockchain is too often used as the silver bullet that solves all of the world's problems. But where it really I think does add unique value is when you have multiple parties collaborating in real time. I think of it as that that shared Google doc instead of the Excel spreadsheet that sits on your computer and then you send someone else and you all have to work separate, right. The beauty of blockchain is that we're all working together in

real time. And so as we think about tokenization of non payments activities we think about tokenized assets areas where you need that kind of collaboration in real time is where I think tokenization adds the most value. So if it is just you know, buying and selling product X that could connect to any other payment system today, sure you might have some incremental value there. Where I get excited are when we see new assets that require that

type of real time collaboration. So one example I'll give that we looked at USDF were loan participations. So you might have an example where a community bank wants to make a loan to one of the companies that they work with, but can't right the loan is too big for this community bank, and so they want to bring other banks in to make that loan. In the past, that would mean the first bank would have to keep its own Excel spreadsheet, collect a payment from a borrow,

or send it to those other banks. By tokenizing that loan, you now have the ability to route payments to the various holders of that loan. That's where I think you can unlock real opportunity. You can create lower funding costs for those loans, help create better access to credit just by making it easier for those banks to collaborate in real time on the same system of record and to have the payments followed. So I think there's a ton of opportunity. I'd say I'm most excited about areas where

you need that kind of real time collaboration. That's where it adds the most value in my mind.

But what can you highlight as far as your roldmap as it relates to blockchain, stable coins, crypto and things like that.

if you could create your own metaverse, what would the theme be? Well, that's a good question.