Stablecoin Payments on the Polygon Blockchain are SURGING! with Sam Fagin

Hey, folks.

We are recording at Chainlink smart Con event and joining me is Sam Fagan, who's the director of Payments at Polygon Labs. Sam, great to have you. It's great to be here, man, Sam. I'm really excited to dive into some details around Polygon. I follow Polygon for years. I'm a madic token holder, uh dear that. Yeah, and I've been seeing like on r w A, dot x y Z a lot of building happening on Polygon absolutely, which

Yeah, so I've been at Polygon for about seven months now, started in March. Prior to Polygon, I was at checkout dot com leading stable cooin growth and crypto in the US, so working with the likes of coinbase and crypto dot com and moonpay to accept Devin credit card payments, but also working with web two merchants such as.

Fiver and upbooring Core.

Very early stages, I was starting to test what stable coin withdrawals will look like the case their contractor or someone in the US is hiring someone in Latin America instead of withdrawing to local currency.

As they accept.

Dollars, they want to hold a dollar nominated stable coin and withdraw on stable coins. So it was very early days, and I think now we're finally getting to that point where we're seeing.

Some of this adoption. Yeah.

Prior to that, I was at Coin Payments, leading global strategy there. Prior to that, co founded a company called omni Cash, which was.

Doing stable coin rewards.

We were founded and funded by five Serve and yeah, I was doing that for two years. So been in and around stable coin payments for about seven years now. I been waiting for this moment right now, So super exciting.

Yeah.

So what's it like seeing the Genius Act pass where the market has clarity around stable coins and everybody and their grandma wants to launch a stable coin now?

Yeah.

No, we've been looking for kind of the rules and the lay of the land in order to really see this technology scale and this pay and rail scale. I think kind of the first domino was when Stripe acquired Bridge. Shout out to Zach Love the Bridge team. Yeah, but once that domino fell, it really put everything else into place.

So it's exciting. Yeah, it's really exciting.

And you know, we have a much more favorable environment for crypto and it seems folks are optimistic. They're heads down building, innovating, and we got the market structure build that's, you know, coming up soon. What do you think about the market structure when that gets past and what impact it will have on the industry.

So I try not to comment on pending regulation, but I will say that it's just another very important step to see who the regulator is going to be, both through the commodities and the security side.

So very excited to see what happens in the coming months, Oh for sure.

So give us a review of Polygon for those who may not know what is Polygon, tell us about the blockchain and much more.

Yeah, so, Polygon historically is a legacy Layer two on Ethereum EVM compatible. As of really the last year, we've been very much focused on payments. Prior to me joining in March, we really took a deep dive into our data and we saw a significant organic growth in P two P volume right now with the number one chain for monthly active users for USDCOW and number three us D T WOW. So we felt as if we needed

So they call it no shoe.

So they might have a myriad of bank accounts in which they're holding dormant capital in order to ledger. Let's just say a transaction from dollars to BRL. They're holding VRL in a bank account local in Brazil in which they have the ledger off. So what stable coins provide is the ability to now transact twenty four to seven, move money inter company within their bank accounts twenty four

So yeah, to exciting times.

And on that note, I read recently that flutter Wave selected Polygon as is default blockchain for cross border payments.

Yep, tell us about that.

Yeah, super excited about Flutterwaves specifically when I came into Polygon I think we're how we're thinking about things. Like one of the things we talk about is modernization with a purpose. We're not trying to bypass the banking rails. We're trying to expand upon it and give access and inclusion. And when we think about some of the markets where we're going to have the greatest influence, Africa is definitely one of them. Sure Utterwave is the largest payment company in Africa.

Wow. So what the use case is today?

They have a lot of enterprise merchants such as Uber and Netflix right now except Nira. Nira is very volatile to the dollar. So what they're doing as soon as they accept that Nira, they are immediately swapping to a stable coin usually USDT, and then now they're sitting on a lot of USDT. What Futterwave is going to be doing is now accepting deposits in stable coin, swapping to a dollar, and then settling to Netflix and Uber's bank accounts.

In the US. Wow.

So we're really excited to be the default chain for Flutterwave in their new build. But again, I think it's US really understanding the use cases being on that side, and we're in the business of solving problems and yeah, super excited about Flutterwave and downstream as a phase two they'll be rolling this out to consumers. So now some of the on banks will now have access to dollars nominated stable coins by just downloading a digital wallet.

So super excited. That's incredible on many levels.

That you have the largest payments company, is it the payments company at Flairway?

Yes, so they're fire so they okay, have deboc credit card payments, also do local bank transfers.

But they're a PSP. Okay.

So if you're thinking about like Stripe is very big in the US. Sure, you have companies like ad In and check Out that are big globally. They are an enterprise PSP for Africa.

That's incredible.

And then you know, I think about you mentioned the unbanked and people who don't have financial services and now through this technology are able to do that and access the world's reserve currency, the dollar via stable coin, and they can put that to work even in DeFi and so forth.

Absolutely, No, it's very exciting and it's going to be interesting seeing over the next few years. I think a lot of multinational corporations are going to become FinTechs. Or banks themselves. So if you think about uber like, obviously they have large distribution, they're global, Like, what is the look for them to have a digital law within their experience and for folks to hold stable coins in order to create more rewards or user stickiness with their users.

So very excited about where we're going.

And I think this technology or this payment rail takes us from a system that historically has been really good for a few markets such as the US, UK and EU right now expands it to everyone and everywhere.

So very excited.

Yeah, that's great stuff. Now we were talking before the recording, I was looking at r WA, dot XYZ and Polygon is up there with the amount of building that's happening on it. Beyond stable coins, which is huge, of course, are there other tokenization types happening?

Yeah, so I would think.

So there's a few products that we're working on our payments use cases we're bringing on chain. One of them is yield, So we're working with a lot of our fintech partners. As an example, Lemon Cash in Latin America has introduced highield savings accounts to their end users, and that is backed by Polygon, r WA's or our WA's issue shoot on Polygon. Oh wow, so they're more full vaults than they might have. As an example, Black Rocks Biddle or Apollo's a credit in a basket and on

Sharp liquidity is a.

Very thin in some of those non USD stables, but have to start somewhere. And then we're also looking at what on chain credit looks like. So there's a lot of demands to solve the weekend settlement crunch. Typically a PSB or a merchant on a Friday they process X amount of money, they won't get settled from their bank until Monday or Tuesday of next week. We're trying to solve that gap with stable coins. So exciting that it's very very exciting.

Curious about the FX market that you mentioned, because we're gonna see the digital u want and the digital yen and it goes on and on right whether it's in a CBDs C format or a stable coin.

How that affects the FX market.

Yeah, No, it's it's going to be super interesting to see how it plays out. We're hoping it's a lot more of like retail facing experiences versus more wholesale and CBDC, but we'll see. Right now, we're working on an FX dex, working with partners such as Bitso in Latin America who have issued MXN. We'll also have pairs and BRL cop We're also working on the Singapore Dollar, which is issued

Wow, so many things happening in the blockchain crypto space.

It's amazing, super exciting man. Yeah, it feels like a.

Great time to be here building, especially now that we have a favorable environment here in the United States.

I wanted to.

Talk about ethereum, given that polygons a ethereum layer too, and what does the feature of that look like, you know, are we going to see a lot more Layer twos that are focused on specific things like how polygons focus and even corporates launching layer twos of their own.

Yeah. No, that's a great question.

Where I see Ethereum always being that trusted security and compliance layer where colleaguon fits in. I think we have chosen to specialize in payments. I think we'll see l twos have their own specialization. We have a hypothesis that change will become specialized and optimized for certain use cases. High frequency trading might be one. Meme coins might be one. We'll see, but we're going to focus on payments. But I think Ethereum will always be that regulated core layer.

That's secure and compliant.

So Ethereum will always obviously be a very important partner to us.

Yeah.

I mean ETH is getting so much adoption as a layer one the layer twos, But you look at black Rock launching Biddle on eth first, right, So it feels like it's the you know, bitcoins is digital goal store of value and Eth is like this next layer on the Internet that you can just build one hundred.

No, it's that trusted settlement layer.

Yeah, for this new Internet of value and it's uh, it's really exciting and it's definitely the chosen one by institutions and enterprises. So we think we're in a very good position as an EVM compatible L two to really scale payments on chain.

Oh, for sure, as much as you can share what's on your roadmap, what can we expect in twenty twenty six.

Yeah, I think I touched upon it a little bit. Sure, definitely the effect on chain is a very exciting component for us. Sure Yield will continue working with FinTechs who are really trying to add additional financial services that have to do with high yield savings accounts. I think you'll start to see a lot of Remen's companies starting to introduce their own version of a neo bank or digital wallet or a bank account. So super excited to be

Well, since you're not far from where I live and where my studio is, we're going to have to do it in person to go through the details.

That'd be really good.

I would love to get your thoughts on the tokenization market, because we're seeing a massive race there. Folks are tokenizing equities, money market, precious metals, real estate, and so forth, and it's the big institutions now leading to charge.

What is your outlook on that market?

Yeah, I think what's super exciting it's giving access to those that typically didn't have access globally. That's what I'm really excited about, regarding some of these tokenized money market funds issued by black Rock as an example. Sure, I think it's really all about access and inclusion. Yeah, and these tokenized products are just giving further access and liquidity to those that typically in the past did not have access. So I think that's what it's about, and it's exciting.

Yeah.

And along the lines of what you know you were mentioning earlier with Polygon's focus on payments and you know, working with flatterwave and different parts of the world where people couldn't access the dollar easily, but now in a tokenized warn they could potentially access US stocks, yep, and other funds and that could change their life.

Yep. No, yeah, it's.

I've mentioned earlier like modernization with a purpose and like we're just very very excited to be on the forefront of giving access to people that in the past did not.

It's very very exciting, man.

Yeah, yeah, and I love you know, it's one thing to say, hey, this technology is great, but to see it applied in the real world and helping I mean, that's what it has to be at the end of the day, right, yep, that's what I think.

I hope a lot of us got into this space. I know I started watching your podcast like seven eight years ago when I first got into the space, and yeah, you've done a lot for this industry, and I think a lot of us got into.

It with a purpose driven mindset.

So we're finally at this I think we've just crossed the starting gate across the chasm. Stable coins have product market fit and yeah, a lot of it is rooted in purpose, which is great.

Absolutely, Sam great stuff. We're going to have to do a long form, but thank.

You so much for joining on. Man. Thanks.

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