This Will BOOST Stablecoin Adoption and Change FX Markets! with Kevin Lehtiniitty

You can review their transparency report. Uphold also offers an amazing rewards program where you can earn up the five point two five percent on stable coins. This rewards program also allows you to get twenty four hour early access to new tokens that they list, and to participate, you just simply have to open the app once per month, deposit fifty dollars once per month, and trade fifty dollars once per month. And the stable coins that they support

includes Ripples, r l USD. You can earn up to five percent on that stable coin and five point two five percent on USBC. So if you'd like to learn more about Uphold and all the great services they offer, visit the link in the description. Hey, folks, welcome into the Thinking Crypto Podcast. I'm your host Tony Edward and joining me is Kevin Latinity, who is the CEO of Borderliss XYZ. Kevin. Great to have you back on.

can go to Bloomberg. If I think about crypto, I can go to coin market Cap. But there's all these different data sources about what is the price of an asset. But if I think about the rates in the stable coin world, that doesn't exist. And the larger and larger FinTechs we've been talking to, they ask an incredibly good question, which is our stable coins actually cheaper than traditional fiat

rails right. And there's a lot of people on the camp that say raw, raw stable coins better, faster, cheaper all day long. I don't think that's quite true. If you look at markets like ust Europe, Swift settles, T zero, it's the most traded effects pair in the world. Those spreads are incredibly tight, et cetera, et cetera. But if you look at like South Africa to Brazil, for sure, stable coins are a giant cost savings there. Right. But the question is like, how do we actually answer that

fundamental question? And you can go to an exchange, right, you could look on binance, or you can look somewhere else. You can go to an orchestrator. You can go to a bit so, a yellow Car, a trace Finance, and a Venia honey Coin someone like that, but you only

get to see their rates. And what we feel like the industry is missing is this credibly neutral benchmark that is able to aggregate across all these different pockets of liquidity and say, Okay, this is the mean, this is the median, this is the standard deviation, this is the minims, this is the byside, this is the cell side, et cetera.

And what we realized is that we have a very interesting connectivity because our core product is connecting PSPs orchestrators, et cetera, into a whole network of global counterparties for on and off ramps, that we're actually seeing all these different transactions and all these transactions being you're saying all this different FX rates data in neur real time across seventy different countries from dozens of different providers, and we've said,

wait a minute, maybe we should make this data available to everybody. And that's the genesis of the borderless benchmark. So already live that that borderless doxygs list benchmark. You can go and this is super early. I will caveat with that. We're big in you know, building public. I will tell you it's our beta version. Alex will tell you it's the zero point zero zero zero zero zero

zero zero zero one. You know, it's not pulling from all the data and the network yet, it's pulling from maybe ten percent of the data, and over the next few months we're going to make it twenty percent, sixty percent, et cetera, et cetera. We really want to encourage as many people who want to be part of the benchmark to contribute their data and their rates, and we've got a process for that on the website where group will participate. But that's the fundamental question, right is what is the

FX rate? What is USDC to BRL, what is USDT t K. Yes, that's not answerable. Now, finally, with the Border's benchmark, people have a place where they can go. The basic version of this is completely free. It's on the website. Anyone can go click on it, see the data, see the spread, start to get an understanding of what's

going on. And then for borderless customers, we're going to build a lot more of this data into the intelligence layer of the platform and be able to understand, Oh, what is the USDC price versus the USDBT price and what corridors do I have an advantage for using this stable over that stable? Are there differences and rates biaus of liquidity between different chains, all those sorts of things. You know, what about business payments versus consumer payments? What

about first party versus third party? Right, not every provider does third party payments. If I need third party payments, how does that change the depth of liquidity and therefore the FS price answers to all these questions is what we're trying to brent to solve for. And you know, we've got a few early folks that have taken a look at it, from some of the largest payments companies in the world that I've said, this is incredible, and we need to show this to like three teams internally

right away, so we're pretty jazzed. But this, to us is that incredibly neutral, community driven effort to say, not stable coin provider one versus two, like let's go battle over FX rates, but stable cooin industry. As we try to bring on flows from TRADFI and PSPs and corporates and banks, we've got to be able to give them these basic building blocks that they're used to getting from

traditional payment rails, and this is our first step. But trying to kind of coalesce community center of mass by providing all this data in one place.

I was talking to someone about this the FX markets and how stable coins can make it better with the instant settlement and the real time transactions and the blockchain. But to your point, this facet of the infrastructure is missing, and I feel having this data out there will help boost adoption and stable coins because people need to know all these things you mentioned, but there's no central place to get it. But you have this solution now.

all this information. So please, you know, come contribute to the benchmark. Let us help you distribute all that out, you know, into the PSP's corporates and orchestra in the world, and let's create a very very real stable coin FX benchmark that can answer these sorts of questions for the Fortune fifties, for the largest banks, for the largest payments companies on planet Earth, and get them to adopt stable points.

Because if that happens, the tide that will rise from that is going to make everybody who's contributing to this industry so so much more about.

do you have to talk to the likes of a Circle or a Tether or not necessarily you just need to work with the payment companies and the banks and so forth.

companies and those folks. And I'm a big believer that that open networks always win. That's what we're trying to do. We're trying to not necessarily create and own something for our benefit. We're trying to be the community organizers of something for everyone's benefit.

that it can't be internalized by a gatekeeper. It's got to be coalesced as a community effort with data from all sorts of different people and then made available to the world. And that's kind of why we're taking this open network approach. And you know, maybe will be proved wrong. Maybe someone like a Bloomberg will come in and put it behind a two hundred thousand dollars a year subscription and you know, try to own the data versus making

it available to the community. But we'd like to think that the crypto ethos of builders and a decentralization is strong enough that if we're going to have a stable coin related benchmark. It should be a credibly neutral, open standard versus Yeah, one corporate company's walled garden.

coin space, you know, there's folks creating stable coins for the Euro and other disease and you may have already addressed this indirectly, but will this product be able to capture that as well? So let's say eventually there's a digital I don't know, yen or something whatever, and people are, you know, going between a US dollar back stable coin and a digital yen. Will this platform be able to track all that exactly.

and a USD. And as we're in this expansionary environment post genius app, you know, what does that look like for the corporate white label tokens as well? Right, if there's an Amazon USD, what does that look like compared to USDC or to USDT. That's really the core of credible neutrality. And then we want to get into the euro stable point pairs. We want to get into the

other stable point pairs. You know, my my goal, if I could wish for anything, you know, five years from now, is to have this open, credibly neutral layer that's able to ingest data from all of these different fragmented market participants and give the treasury team at you know the world's largest companies, one single source where they can go and they can do real, live rate comparisons across their entire treasury program, find cost optimizations and make very compelling

arguments back to the CFO that says, hey, this is you know, the Bloomberg Fiat mid market rate superimposed on top of the stable point market data. And when we're managing our US Euro treasuries, we should keep doing that the way we've been doing it. But when we want to go and deploy capital to the market's A, B and C, we're actually going to achieve twelve basis point average cost savings, which at our scale saves US millions of dollars. And now that's the argument to go and

use stable coins versus oh they're trendy. I see our competitors do it like actually giving that power to those treasury teams to go take the business arguments, quantify it, and take it to the CFO where he looks at it or she looks at it and says, oh, wow, well this is a no brainer. We're about to say three four million dollars a year, go do it? Are

you able to tell us some of the names of the folks that you're going to be pulling this data from. I know some of this stuff might be under NDA and you probably can't, but I have to ask let me answer your question indirectly. So the data that we're showing is all anonymized for a lot of reasons NDAs other things of that nature. But we do make the Borderless network members public on our website Borderless likexpizing slash ecosystem, and you can see all the different auto off proadors

that we're connected to. You can see this like global map of the rails coverage and currency coverages and things like that. So while I can't directly answer your question, if you go and you look at who is on Borderless's network, Borderless's network feeds the benchmark and you can get you know, some indirect sense of where this is coming from.

how kind of like raw and basic this is. So I think it's the wrong time to put this out in the world and then ask people to help us make it.

and decrease even with a month's worth of data. It's actually quite interesting at this point, and you know, part of part of what's important to us is trying to figure out. I'm not going to show you three thousand different data points at some point hour by hour. So for you know, maybe last seven days and last thirty days, we'll show you hourly snapshots, and then for older history we'll compress it to like a daily average or something like that, so that you're also not overwhelmed by the

volume of data. And then part of what we're thinking about is, Okay, if that's the approachable answer, which I think it is, then what does it look like for like analysts and you know, other folks who want to go deeper. How do we balance consumer friendly and approachable on one side with then maybe some sort of like an expert mode or analyst mode on the other side that lets you add a lot more reporting that lets

you out data more granularly. How do we give you API access to the benchmarks that you can really pull this into your in house you know, data analytics suites. And there's a ton that we want to do with this that we think would really benefit the industry.

did that do to the dollar? And specifically you know we have fs stuff around this, but what did it do to the stable coins that are dollar backed compared to all these other global currencies? And I think this could feed a ton of interesting insights and research and things of that nature. And I hope that there's some very talented researchers who end up using this and creating these insights because I would love to see them.

they're going to regret. So there is still a little bit of regulatory uncertainty, I would say from people that we talked to, But by and large, this is the unlock that people have been waiting for. Right The banks that we're talking to were thinking about bank consortiums they issue stable coins. The large corporates that we're talking to were thinking about how can they issue a stable coin into their own existing user base, distribution base, you know,

B to B vendor supplier base, et cetera. A lot of the large FinTechs are talking about how do they leverage stable coins and lights Bark had a phenomenal partner summit last week and as part of that they had a bunch of you know, major fintech CEOs, including the CEO of Sofi, and he was talking about the stable coin that Sofi wants to launch. Right, so we're going to see this giant explosion of more and more stable coins,

and that's all Genius Act based. Genius Act is that regulatory unlocked along with the new SEC policies or kind of the new SEC leadership with kind of Gensler stepping out and FDIC in Federal Reserve leadership saying okay, you

know the bank regulators are okay with stable coins. Genius Act gives you a compliant issuance framework and the SEC isn't going to randomly decide that everything on a blockchain is the security and come tabon with the wells noticed and those three things combining are starting to enable people like so Far to very credibly say we're looking at a stable coin and there's a ton of plans that we have for what we want to do with it, and that that is really cool.

on Thursday, I think just yesterday, black Rock announced they're going to launch a genius compliant money market fund tailored for stable coin issuers. Love to get your thoughts on that and what they're trying to do there. It's very clear that if you're trying to sell picks and shovels, there's two really big picks and shovels businesses for stable coin issuance. It's the technology providers that are going to

enable the issuance of the tokens themselves. So these are companies like Bastion, companies like Anchorage, companies like Braille, et cetera, et cetera, different regulatory families, Bridge US some of this stuff as well, like who is selling you the technology to issue the stable coin? And then the other giant pick and shovele is going to be the asset management.

And I think that's what Blackrock is saying and saying, hey, wait a minute, we don't need to pick winners and losers if we can have the best kind of asset management programs for stable coin issuers. We can then go to what's going to be hundreds of different stable cooin issuers, which candidly most will fail, that's what's.

it really easy for you to be genius compliant. You're going to tap that on with your technology provide or and kind of regulated issue or again whether it's a beast gen or an anchorage or someone like that, and then that's going to let you take that white labeled stable point to market as you know Sofi USD or Amazon USD or you know Revolute USD or PayPal already has p y USD I and drive that into your user base.

We've seen that since the birth of Silicon Valley, America has been the innovation economy. And now the handcuffs are off and are there going to be bad projects? Of course there will be are a lot of projects going to fail. Of course they will. But builders are now out there. They're trying. The playbook is fair. There's a sandbox that you can play in, and that's just unleashed innovation across the board.

of the stable coin innovation. Some of the banks, the banking lobby I've been trying to push back on stable coin yield in the you know, be a the Genius Act. Now they're trying. I don't think they have been successful. But what are your thoughts on them pushing back?

of fear where they're trying. You know, banks have been a regulatory monopoly since this country was started, since like banking legislation was really put into place many many, many many many years ago, where banks have never had to compete in the free market economy. Banks have only had to compete within other banks, like within their you know, monopoly, They've only had to compete within within those folks. And now they're competing with software companies, they're competing more globally.

Like it's massively changed. And I think we see this happen all the time where the incumbents, instead of embracing that competition and using that to drive better products, drive better pricing, and drive better user experiences, drive better distribution, they react by trying to recap the better products. Right. I think of the taxi lobby versus Uber. Taxis could have been the biggest distributor of Uber. Right, think about how many Uber drivers were in new markets versus taxi drivers.

Taxi drivers could have been the ultimate infrastructure that's filling the Uber rider demand. But no, they said, we're going to fight Uber. The taxi lobby is going to make a right share illegal, they're going to block them at the airport, They're going to do all these different things. And ultimately it didn't matter, and the long term mover still became widely popular because it was a much much better product. I think the same thing's going to happen here.

Banks are saying, hey, you can't do this, you can't do that, we want to stop from breamlast that all distin sensivizes or hurts the ability to compete long term, it doesn't matter because stable coins on a blockchain are such a better product. The ability to move value immediately around the world, the ability to track that value, the ability to have that on a decentralized ledger that we all agree on. All those things make such a far

better product. Then in my opinion, that energy would be much much better serve figuring out how banks can support and play a role in stable coins, and to be fair that banks are right. There's a consorttion of banks that's looking at launching like Top seven currencies as stable coins on a blockchain. There's a tremendous amount of innovation that's going on in tokenize deposits, right, not stable coins, but tokenized the posits and can tokenize deposits become an

inner bank settlement mechanism. I think the answer is yes, And there's a lot of places where that makes more sense for stable points, for bank level settlements. Sable coins make more sense for businesses and retail users. Tokenize the posits make way more sense for financial institutions. That's where the efforts should be, not in blocking stable point awards.

counterparty risk of that? Heather has a phenomenal job building incredibly deep liquidity around the world. They're a private company. I think you have a tremendous opportunity as a bank to say, do you want counterparty risk on Circle as an issuer, or do you want counterparty risk on this consortium of BOVA, JPM, et cetera as your stablecoin issuer? And if I were them, that's where I would go very very hard into and say stable coins are amazing.

Stable Coins should be able to do everything, because that means our stable coin can do all these different things. And what matters is who issues your stable coin and who do you trust from a counter party risk standpoint

to issue that. Obviously it should be us, this consortium of the major banks that you already trust from a banking perspective, and they're going to be the right votes to lobby around, you know, things like FDIC insurance for stable cooin accounts, right, Like that's going to come from bank lobbying. So instead of fighting yield, go lobby for making the stable coin products better, and then go make

yourself the center those stable coin products. And that's the role that I think the banks have to play is actually as issues as counterparties that are already trusted for trillions of dollars of settlements and payments flow. Go go do that. That's what you do best.

I don't know if you can speak to this, but you know, I know where you're going headlines right where Oh some of they minted three hundred trillion in py usc But my overay wasn't that Because I know humans are going to make errors, right, people gonna have fat fingers. But the point is we all and as the public saw it, at the same time that it happened, right, Because it's on chain, man, and when they burned it, we can confirm they burned it. So you can't do

that at a bank. There's no way I can see what's happening at JP Morgan, But on the blockchain, I can see it.

things happen as infrequently as humanly possible. But the great part about blockchain based systems is that is a trustput verify right. We all saw it, we all saw the mint, we all saw the burn. No one has to take Paxos's word for oops, sorry, we fix it. Go. This sucks, like, let's be honest. Paxos is one of the world's best

crypto companies. Yeah, and they made a giant error that they should not have made, but it happened, and the beauty of blockchain means that every one of us was able to independently verify that in fact it was fixed, versus a bank saying trust me, bro, it's all good.

And Kevin, I'm looking forward to seeing the data pour in because you know, as a nerd, I'm going to look through it and take my own takeaways from it, even though I'm not in the FX markets at all.