Speaker 1: All right, we are back here on another XRP podcast,
Speaker 1: and today we're going to be looking at really the
Speaker 1: macro stage and kind of the idea of utility driven
Speaker 1: finance PAYFI many people would call that.
Speaker 2: We're also going to talk a little.
Speaker 1: Bit about real world assets and the bigger picture, which
Speaker 1: is where one of the major players in this sector,
Speaker 1: especially if you think about just the XRP ledger ecosystem,
Speaker 1: you look at traditional ecosystems within the blockchains. ZEBEC has
Speaker 1: been on the forefront of this around streaming liquidity, So
Speaker 1: we're going to go into that with Simon, and I
Speaker 1: think we're going to get into understanding how maybe we
Speaker 1: could see anywhere between trillions in terms of annual payroll,
Speaker 1: but also the number of enterprise clients that are going
Speaker 1: to be jumping into all of this that I think
Speaker 1: is to make a big difference in the blockchain in
Speaker 1: terms of utility. So stick around for all this, guys.
Speaker 1: We'll get started. Before you get into it, I do
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Speaker 3: All right.
Speaker 2: So here we are with Simon. Simon, welcome into the show.
Speaker 3: How are you, Paul? Great to be here today.
Speaker 2: All right, So we got a couple of things to
Speaker 2: hit on today.
Speaker 1: We're going to talk a little bit about just the
Speaker 1: macro crypto markets that we're seeing more and more of
Speaker 1: as we see the pressure price pressure mostly one thing
Speaker 1: that has come up with a lot of our interviews,
Speaker 1: and I think also just on our research team Islator,
Speaker 1: the speculation.
Speaker 2: That we're seeing to infrastructure.
Speaker 1: And this is a transition that you and I got
Speaker 1: a chance to kind of talk a little bit about
Speaker 1: when we were.
Speaker 2: Together last in Vegas.
Speaker 1: But when you look at the current state of the
Speaker 1: markets going away from hype into real enterprise adoption, where
Speaker 1: does ze BEC play in terms of that focus.
Speaker 3: Well, first of all, I think what we're seeing the
Speaker 3: markets right now is a healthy rebalancing away from what
Speaker 3: we would call hype and momentum or towards utility and infrastructure.
Speaker 3: Of course, as the BEC, we've been building the rails
Speaker 3: now for real time finance for over five years. We're
Speaker 3: squarely in the infrastructure category, and we think that really
Speaker 3: our time is here as a company to really show
Speaker 3: what we built and bring it to the enterprises of
Speaker 3: the world.
Speaker 1: When you look at the rise of payfi, this is
Speaker 1: one of the utility I think, one of the utility
Speaker 1: main things that are really going to make a huge difference,
Speaker 1: not for blockchain, but I think for business in general
Speaker 1: payment finance. First of all, explain that to our audience.
Speaker 1: Some people may have never heard the term pay five,
Speaker 1: never really understand to understand what payment finance Isn't it
Speaker 1: the same thing?
Speaker 2: Give us a rundown.
Speaker 3: Well, the way I like to think about pay FI,
Speaker 3: it's really the ability to program payments, and the blockchain
Speaker 3: is set up in an ideal way to do that. So,
Speaker 3: using Zebeca as an example, payroll is typically run every
Speaker 3: two weeks or every month using legacy banking else ach Swift,
Speaker 3: we've completely real rebuilt payroll on blockchain rails utilizing smart contracts.
Speaker 3: And the reason smart contracts are important is that you
Speaker 3: can use a smart contract to program a payment in
Speaker 3: any increment of time, any frequency, any regularity that a
Speaker 3: banking payment would not be able to do so. Now
Speaker 3: that the world has woken up to stable points both
Speaker 3: businesses and regulators, we're seeing increase interest in pay FY
Speaker 3: solutions for businesses as well as financial institutions.
Speaker 1: So second by second settlement really is what you're talking about.
Speaker 2: This, of course, it.
Speaker 1: Eliminates a lot of the batch processing that banks have
Speaker 1: been doing forever where they float.
Speaker 2: On your money.
Speaker 1: Even that's done today in payroll with some of the
Speaker 1: biggest payroll companies out there where you'll get it withdrawn
Speaker 1: from your bank. If you're a business owner, you know
Speaker 1: how this works. It withdraws from your bank. Whether you're
Speaker 1: use an ADP GUSTO doesn't matter, and it sets there
Speaker 1: maybe for twenty four hours in some cases, law longer
Speaker 1: if there's a holiday, and then of course the end
Speaker 1: result is you finally get a payment that goes out
Speaker 1: to your employees or your contractors. This is something that
Speaker 1: you guys are really getting into. I guess one of
Speaker 1: the questions I always wonder is privacy is pretty paramount
Speaker 1: in the payroll side of things. How do you guys
Speaker 1: deal with that as a challenge.
Speaker 3: It's a great question, and it's one of the questions
Speaker 3: that we got very early on when we brought some
Speaker 3: back to market. You're completely correct, payroll data should not
Speaker 3: be shown unchain. Obviously, HR departments don't want all their
Speaker 3: employees and contractors to know what everyone else hates. So
Speaker 3: at BECK we work with a number of privacy solutions,
Speaker 3: which are essentially layered twos that are sit on top
Speaker 3: of blockchains which completely mask transactions, and we've recently actually
Speaker 3: worked with some private blockchains directly as well, So to
Speaker 3: give you an example, we're building a payroll product, a llio,
Speaker 3: which has actually a native privacy feature built into the
Speaker 3: blockchain where you can choose if you want a transaction
Speaker 3: be publicly visible or heal date transaction.
Speaker 2: Yeah, I'm looking at your website.
Speaker 1: We'll bring it up just for everybody, if you guys
Speaker 1: want to go check it. It gives you a little
Speaker 1: bit more insights on some of the things they're doing
Speaker 1: around products.
Speaker 2: So you guys are doing it.
Speaker 1: A five hundred million an annual payroll volume, what would
Speaker 1: that look like in say, thirty six months, if we
Speaker 1: continue to see the regulatory framework being developed.
Speaker 3: Our goal by the end of the year is to
Speaker 3: hit a run rate of about a billion dollars in
Speaker 3: payroll volume. Using the Genius Act as an example, we
Speaker 3: saw huge influx of interest, particularly from US businesses after
Speaker 3: the Genius Act was passed last summer. If we see
Speaker 3: Clarity pass this year, I would imagine that the floodgates
Speaker 3: would open further and we would see that next like
Speaker 3: of growth that would get us into the billions. Now,
Speaker 3: you need to remember billions of dollars in payroll volume.
Speaker 3: It's a drop in the bucket. Yeah, an payroll volume
Speaker 3: in the US alone is eleven trillion dollars. That doesn't
Speaker 3: include cross border, that doesn't include international contractors, right, so
Speaker 3: we're looking at tens of trillions in volume, which will
Speaker 3: inevitably flow to staple coins. So we're very, very early
Speaker 3: in this transition.
Speaker 1: Yeah, all right, So you guys have tho zabec cards.
Speaker 1: You've got the payroll component, the de pen side, which
Speaker 1: is the decentralized physical infrastructure. When you explain, first of all,
Speaker 1: explain the two, I think that maybe are not easily
Speaker 1: easy to understand one, the deep in side, and then
Speaker 1: the super app.
Speaker 2: I know you guys have early access on them. When
Speaker 2: are you going to open that up to full full availability?
Speaker 3: Great? So the super app went live earlier this year
Speaker 3: in desktop version. So now it is fully usable by
Speaker 3: our retail users that want to use cards, they want
Speaker 3: to stake some CK tokens, they want to send payroll
Speaker 3: streams peer to peer.
Speaker 2: That's on desktop right now.
Speaker 3: That is on desktop, and the mobile application is launching
Speaker 3: in the next couple of weeks. It's been under development
Speaker 3: now for months. As you can imagine, there's a lot
Speaker 3: of regulatory and legal red tape that we need to
Speaker 3: pass before bringing it out to the app store. So
Speaker 3: that's coming very soon. But keep in mind the super
Speaker 3: app for us as a retail product, right it's for
Speaker 3: individual users that want to use the back products. It's
Speaker 3: separate from our enterprise products. Our enterprise product has all
Speaker 3: of the bells and whistles that an HR app designed
Speaker 3: for Fortune five hundred businesses have, and that is actually
Speaker 3: the product that we're now going to market with with
Speaker 3: certain blockchains. So, for example, Stellar in the Back have
Speaker 3: now been working together for the past three months to
Speaker 3: develop an enterprise payroll app that runs on Stellar blockchain,
Speaker 3: and that's going to be going to market next week,
Speaker 3: so stay tuned for an announcement on that.
Speaker 1: All right, So let me dive into that a little bit.
Speaker 1: So one of the biggest challenges I think that businesses
Speaker 1: have is dealing with the federal withholdings that if you're
Speaker 1: a US company, federal withholdings are done on these things
Speaker 1: called nine to forty one's, which are essentially where if
Speaker 1: you've hired this is an employee situation on a contract
Speaker 1: or employee, You've got matching federal income tax, you've got
Speaker 1: Social Security, you got all these different little elements that
Speaker 1: make up that tax deduction. This has been the big challenge,
Speaker 1: I know for us, because I've been trying to go
Speaker 1: on blockchain forever for our own employees. Will that be
Speaker 1: addressed in this next wave of payment finance.
Speaker 3: It's absolutely been a point of friction. You're completely correct,
Speaker 3: and that's actually why a lot of our initial growth
Speaker 3: has been on the contractor side. On ten ninety nine's
Speaker 3: as at the end of the day, it's really a
Speaker 3: quarterly downloaded. The contractors follow their own taxes and they
Speaker 3: they deal with their own their own payments to the IRS.
Speaker 3: For W two employees, which is the example you're taking now,
Speaker 3: it is doable. It is a little bit more tricky.
Speaker 3: There's a few different tax solutions that we plug into
Speaker 3: that do help with that. But I imagine in the
Speaker 3: next couple of months and years we're going to see
Speaker 3: many more popping up.
Speaker 2: Why not just partner with an ADT or a GUSTO
Speaker 2: or someone like that.
Speaker 3: It's a great question, and we've actually been working very
Speaker 3: closely with members of ADP's Senior Executive Committee from the beginning.
Speaker 3: You go to our website, you'll see of their advisors
Speaker 3: or actually our advisors. And to give another example, a SURE,
Speaker 3: which is a middle market payroll company. Yep, they've actually
Speaker 3: been working with us for over two years now. And
Speaker 3: the reason that we work closely with the SURE is
Speaker 3: that we actually purchased a few payroll companies in the
Speaker 3: US and many of them are actually within the assured ecosystem.
Speaker 3: So Assurance of BECK are i'd say, you know, two
Speaker 3: of the most forward thinking stable coin payroll providers out there.
Speaker 1: Okay, so this is you feel like this is just
Speaker 1: around the corner from becoming mainstream, seeing real enterprise adoption
Speaker 1: on a lot of this, which I think is the
Speaker 1: key thing here. Obviously You've got you guys have a
Speaker 1: global reach with being able to do contractual payments anywhere
Speaker 1: around the world, and that is there are a handful
Speaker 1: of companies that are have been out there that have
Speaker 1: started to work into blockchain where they you know, file
Speaker 1: the requirements in the certain provinces or countries, et cetera.
Speaker 1: Are you guys doing any of that kind of stuff
Speaker 1: right now of being able to deal with contractors in
Speaker 1: other countries?
Speaker 3: So you're talking about the employer of record model, right ye?
Speaker 3: Are we don't offer that in house, but we are
Speaker 3: exploring a few partnerships with companies that do offer that
Speaker 3: so that way we can have that as a service
Speaker 3: alongside our contractor payroll, which is kind of the bulk
Speaker 3: of our volume.
Speaker 1: When you okay, so let's look at the stable coins
Speaker 1: for a second, because to me, this is the new
Speaker 1: rail going forward. You look at the expansion of the
Speaker 1: stable coin utility, whether you look at USDC, the euro
Speaker 1: stable coin eu r C from Ripple r L USD
Speaker 1: obviously tied into this. All of this is going to
Speaker 1: be used pretty much for everyday business, and I'm finding
Speaker 1: more and more people that are willing to accept stable
Speaker 1: coins on enterprise level transactions, which is surprising me. Yeah,
Speaker 1: because I didn't think we would see it this early on.
Speaker 1: What do you think the timeline is going to look
Speaker 1: like for stable coins?
Speaker 3: Well, to go back to the example of the Genius Act,
Speaker 3: I mean, it really gave us the federal framework for
Speaker 3: payment stable coins. So at ZEBEC, for the first time,
Speaker 3: we were seeing enterprise treasurers now asking us, you know,
Speaker 3: not just about what a stable coin is, but rather
Speaker 3: how do we select a stable coin? What stable cooin
Speaker 3: do you recommend? So the conversation is completely changed. I
Speaker 3: think finance departments and treasurers are much more open to
Speaker 3: transacting and stable coin, whether they have custody solutions in
Speaker 3: house or they require custody solutions. That's still something that
Speaker 3: we're very early in, but I anticipate over the next
Speaker 3: few months and years that we're going to see a
Speaker 3: good percentage of Fortune five hundred companies in America holding
Speaker 3: some form of stable coins.
Speaker 1: On the analogy, Yeah, I think it's going to be
Speaker 1: a surprising to a lot of people to understand because
Speaker 1: the speed and what you're dealing with in terms of
Speaker 1: instance settlement, it really does make a difference, especially when
Speaker 1: you're dealing with a lot of money that many of
Speaker 1: these enterprises are dealing with, even in just on vendor
Speaker 1: payments alone, because a lot of times vendors are giving
Speaker 1: discounts for certain payments, which if you put that into
Speaker 1: the workflow of how businesses pay other businesses, that becomes
Speaker 1: a potentially huge market going forward.
Speaker 2: So definitely watching that one closely. Let's talk a little
Speaker 2: bit about what.
Speaker 1: Your strategy has been, you know, the evolution of the
Speaker 1: token maturity. I want to talk about where you guys
Speaker 1: came from from Solana into a multi chain approach. Can
Speaker 1: you update us any on how you guys are looking
Speaker 1: at a modular payment network now as of today.
Speaker 3: It's a great question if you go back through our
Speaker 3: history of the past five years. We were born in Solana.
Speaker 3: They were actually one of our early backers alongside Circle,
Speaker 3: and initially we were a protocol built on Solona that
Speaker 3: allowed for real time streaming payments primarily using the USDC
Speaker 3: stable point. Because of our relationships a Circle right in Itslana,
Speaker 3: we want to band in a Circle. In fact, we
Speaker 3: strengthen our relationship with both of those entities. However, we
Speaker 3: did realize a few years ago that crypto was always
Speaker 3: going to be multi chain. The stable coin would be
Speaker 3: the product that I'm reigned supreme and knowing that we
Speaker 3: built our rails and our infrastructure so that they could
Speaker 3: support a variety of stable coins, they could support multiple blockchains,
Speaker 3: and we would actually be able to go to enterprises
Speaker 3: and let them pick which stable coin they would want
Speaker 3: to work with, which blockchain they need already have integrated,
Speaker 3: rather than them forced to fisitback solution.
Speaker 1: Yeah, well, and I think the key here with multichain,
Speaker 1: I think more and more people are realizing that there
Speaker 1: are certain chains that do things better than others, and
Speaker 1: certain chains that have some very interesting features within them,
Speaker 1: even though I think a lot of chains are trying
Speaker 1: to kind of copy some of the best features of
Speaker 1: each other.
Speaker 2: But where do you think this Where do you think.
Speaker 1: This lands in say, five years, do you think we
Speaker 1: will still see ten blockchains after do you think it's
Speaker 1: going to narrow down to maybe three or four.
Speaker 3: I think we're going to have at least ten blockchains
Speaker 3: out there with meaningful enterprise usage. I mean, as you mentioned,
Speaker 3: each chain has its own benefits, its own strengths. I
Speaker 3: mean to give an example of Stellar, given that we're
Speaker 3: going live with our product with them very soon. With
Speaker 3: Stellar excels in in micro payments, they excel in cross border.
Speaker 3: They have a connection into money Gram, which makes you
Speaker 3: at least an off rapping so easy. So one of
Speaker 3: the reasons that we went very deep with Stellar is
Speaker 3: that we saw them as one of the best chains,
Speaker 3: and not the best chain for small small payments for
Speaker 3: international contractors, particularly to developing markets.
Speaker 1: Yeah, we just had the nail on not too long ago.
Speaker 1: She was teasing that partnership. So yeah, it's probably going
Speaker 1: to be a big deal when you guys announced some
Speaker 1: of the things within it. I want to thank our
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Speaker 1: want to jump back over a little bit and go
Speaker 1: into a little bit about the ZEBEC to the ZBCN migration.
Speaker 1: First of all, can you explain the one ten token
Speaker 1: split strategy? You know, the largest supply side, how is
Speaker 1: that optimized for you know, transaction, especially micro transaction or
Speaker 1: streaming payroll for that matter.
Speaker 3: It's a great question. So if you go back to
Speaker 3: our history, we launched as a protocol with the ZBC
Speaker 3: token grad It was a protocol on Salana. Two years ago,
Speaker 3: we complete the upgrade of the protocol to the network,
Speaker 3: which is now the ZBCN. It's the network token, and
Speaker 3: as you said, it was a one for ten token split.
Speaker 3: The reason that we did this was to ensure that
Speaker 3: we could keep transaction fees low on the network, right
Speaker 3: given the anticipated increase in the token price, which it
Speaker 3: has done now over the past few years, require one's
Speaker 3: EBC would have been prohibially expensive for micropayments and small transactions.
Speaker 3: So for that reason we did the token split. And
Speaker 3: from here on the tokenomics are going to continue to
Speaker 3: to grow with the to grow with the network. So
Speaker 3: the example I would give is that we are now
Speaker 3: no longer bringing any new token to market, so the
Speaker 3: token is fully bested, it's fully distributed, and at this
Speaker 3: point we've transitioned into a fully deflationary environment. Yeah.
Speaker 1: So the final for those of you or who are
Speaker 1: kind of tracking this, the final token unlock was done
Speaker 1: in March, which really is the elimination of the dilution
Speaker 1: risk on how this model is kind of put together.
Speaker 2: So that could be good, especially if you.
Speaker 1: Have annualized growth in revenue based buybacks and burns on
Speaker 1: that when you look at that strategy going forward.
Speaker 2: Is that sustainable for zebec?
Speaker 3: It absolutely is, and it's core to our strategy on
Speaker 3: the token, So everything at a bec leads back to
Speaker 3: the ZBCN token. For years now, we've been buying totn
Speaker 3: back using the revenue of our car program, which has
Speaker 3: grown consistently month over month, really regardless of the market's performance,
Speaker 3: which is great to see because that is really the
Speaker 3: retail adoption that we're looking for at crypto products. On
Speaker 3: the payroll side, so both the super app and the
Speaker 3: enterprise payroll, ZBCN is required to pay transaction fees for
Speaker 3: running payroll streams. So as our payroll volume continues to grow,
Speaker 3: more and more subc token there will be used.
Speaker 1: Yeah, I know you guys are rolling out the on
Speaker 1: the super app and the card in terms of rewards programs.
Speaker 1: First of all, in the super app, what am I
Speaker 1: going to be able to do inside of that? What
Speaker 1: are going to be some of the key features.
Speaker 3: So think of it as a replacement to a banking app.
Speaker 3: You'll be able to store your stable coins in there
Speaker 3: along with other cryptotokens, You'll be able to swap them,
Speaker 3: You'll be able to start payroll streams and payments. So
Speaker 3: let's say you want to pay a friend, you want
Speaker 3: to play a contract, or you want to pay someone
Speaker 3: in your network. You can do that through that. You
Speaker 3: can then issue yourself a master card, right, and we
Speaker 3: offer multiple different master cards. It's a beack for different
Speaker 3: use cases.
Speaker 1: Is it a true credit card or is it a
Speaker 1: somehow a debit It is more of.
Speaker 3: A debit cards. There's no creditable in it. The fees
Speaker 3: are completely zero, so if you put ten USDC on it,
Speaker 3: you get ten US dollars suspend. And the reason we
Speaker 3: offer that product is it makes our ecosystem more usable.
Speaker 3: If people want to get paid in stable coins, they
Speaker 3: need to also be able to spend their money in
Speaker 3: the real world here and stable coins, So that's what
Speaker 3: the superrabb and capitulate. We also have zebec token staking
Speaker 3: within the super app. Yesterday we passed quite an impressive
Speaker 3: milestone of fifteen billion tokens are now staked by the community,
Speaker 3: So that's fifteen percent of our supply is staked, and
Speaker 3: that goes up a month over month.
Speaker 2: Yeah, in staking, what's the yield right now?
Speaker 3: The yield is low single digits, so as the staked
Speaker 3: amount increases, the yield naturally decreases, and that again has
Speaker 3: been helpful for us to control token inflation.
Speaker 1: Does this okay? So with this kind of super app,
Speaker 1: especially if you look at real world use, one of
Speaker 1: the things around credit cards that I think always wins
Speaker 1: me over is these rewards. You know, whether it's a
Speaker 1: direct cash back or it's some sort of you know,
Speaker 1: loyalty program that I get benefits on.
Speaker 2: How are you guys going to be able to deal
Speaker 2: with that?
Speaker 1: Because I know you guys are mapping to MasterCard right now,
Speaker 1: what is that going to look like?
Speaker 3: So for our first few years, the priority has always
Speaker 3: been the lowest fees in the market, right That was
Speaker 3: our hook to get customers to use our products. Now
Speaker 3: that we're more of a mature business, what we're exploring
Speaker 3: is introducing a reward program in ZBCN that would be
Speaker 3: tied to your stage balances of ZBCN as well as
Speaker 3: your card spend. So if you hold a lot of
Speaker 3: ZBCN is staked in the super app, and then you
Speaker 3: spend a lot of money on the back cards, you
Speaker 3: will earn a cash back reward in token.
Speaker 1: Oh okay, all right, in the token correct? In the
Speaker 1: token in the token. All right, that's interesting. What other
Speaker 1: do you have any new features that you're going to
Speaker 1: be releasing later this year.
Speaker 3: So within the super app, there's a number of features
Speaker 3: that are on the on the horizon, including direct on
Speaker 3: and off ramp, as well as an integrated wallet in
Speaker 3: the super app, So that's going to come for our
Speaker 3: partnership with Stripe. Stripe, of course, is the development and
Speaker 3: the owner of Privy Wallet, So Privy Wallet will be
Speaker 3: built into the super app, meaning that if you're not
Speaker 3: a cryptonated person, you don't have to worry about connecting
Speaker 3: your fantom wallet or your meta mask wallet. Rather you
Speaker 3: have a wallet as a service built in with seamless
Speaker 3: on and off ramps to local bank accounts.
Speaker 1: Okay, interesting, So via Stripe via Stripe exactly. Okay, okay,
Speaker 1: So that and that's going to roll out in twenty six.
Speaker 3: That is going to be coming this year, in the
Speaker 3: next month or two, so once the first version comes out,
Speaker 3: version two will have that baked into it. And then
Speaker 3: another very exciting feature that we're that we're looking at
Speaker 3: adding this year on the roadmap is virtual iband, so
Speaker 3: we'll be able to create virtual bank accounts that are
Speaker 3: that sit within the super app, meaning you'll be able
Speaker 3: to move money seamlessly from your stable coin doleance is
Speaker 3: your payroll into an eeband and then you can use
Speaker 3: that to make payments in let's say the FIAT world.
Speaker 1: Okay, so for our audience, explain an iBank. Is this
Speaker 1: a traditional ABA number, which is the banking association number
Speaker 1: that correlates wire routing and all that kind of stuff.
Speaker 2: Would it work the same way exactly?
Speaker 3: So an IVAN is the international version of what an
Speaker 3: American Americans know as a as a bank account with
Speaker 3: an ABA and a routing number. They're fully virtual. They
Speaker 3: support multiple currencies, so you'll have an IBAND for your euros,
Speaker 3: you'll have an ivand for your US dollars for your accounts,
Speaker 3: and then you'll be able to go between a pound
Speaker 3: stable coin and your pound iband, and your eurostable coin
Speaker 3: and your euroiband. And the reason that this is so
Speaker 3: powerful is that it completely replaces a banking app. It
Speaker 3: completely replaces an app like rebolute, right, and it's built
Speaker 3: on stable coins before anything else.
Speaker 2: Is this and this is going to be available in
Speaker 2: the US.
Speaker 3: This is this is going to be available in the US. Yeah.
Speaker 1: So from a Okay, so you don't need a master
Speaker 1: account to do this correct? How are you getting by
Speaker 1: not getting a fed master account?
Speaker 3: We have through some of our banking partners, we have
Speaker 3: coverage in this area and we're using banks APIs for
Speaker 3: the for the iband, so we're not going to be
Speaker 3: hosting the I bands through the back Okay.
Speaker 1: I are a banking partner who custodies the assets that
Speaker 1: are in there, who.
Speaker 3: Custodies the assets within the super app, So we have
Speaker 3: a The way it's currently built is it's a non
Speaker 3: custodial solution, so the wallet, the wallet that you use
Speaker 3: essentially will be your own private key and you'll have
Speaker 3: to okay, citate yourself. But when we bring Privy Wallet
Speaker 3: later this year, that will be a fully custodied solution.
Speaker 1: So that would be a custodied solution right now, will
Speaker 1: the on the super app, I'd still be able to
Speaker 1: plug in.
Speaker 2: My Salona wallet or my Base wallet.
Speaker 3: Or the option to go non custodial or custodial.
Speaker 2: Okay.
Speaker 1: So as far as ky C, where is the KYC
Speaker 1: wall going to hit?
Speaker 3: Yeah, so it's a great question. We have different levels
Speaker 3: of KYC based on the product that you're using. As
Speaker 3: a next so if you want to have a card,
Speaker 3: that's kind of the first level of KYC, and then
Speaker 3: from there, if you want to set up a payroll,
Speaker 3: for example, and you're an enterprise, you're going to need
Speaker 3: to do basic KYB if you're if you're paying employees
Speaker 3: or contractors. Now on the recipient end, you only need
Speaker 3: to do a KYC when you move money out of
Speaker 3: the system, right, So you move money to a bank account,
Speaker 3: for example, or you move out.
Speaker 2: Of the system, and I have full capacity.
Speaker 1: If I'm in the system, I can move to back
Speaker 1: to my wallet and be on DeFi and you know,
Speaker 1: traditional hardware stop.
Speaker 3: Load gets you the ultimate flexibility.
Speaker 2: Yeah.
Speaker 1: Yeah, any kind of limits that are within this app,
Speaker 1: because this is one of the things that I think
Speaker 1: people hate about bank accounts. There's always limits everywhere you look.
Speaker 3: Well, look, there's absolutely no limits in the amount of
Speaker 3: stable coins that you can send it to the app.
Speaker 3: That's the beauty of using DeFi rails. However, when you
Speaker 3: talk about the real world products like the cards, for example,
Speaker 3: there are limits on the cards, but we offer different
Speaker 3: cards for different limits. Our Carbon card you can spend
Speaker 3: ten thousand a day. We have a new card that's
Speaker 3: coming to market. That's going to be the black card,
Speaker 3: and it's going to have multiples of that, So that's
Speaker 3: going to really be for the enter prize users and
Speaker 3: the big spenders, right. And then on the staking side,
Speaker 3: we've limited staking to five million tokens per wallet, and
Speaker 3: that's really a way to encourage retail users to to
Speaker 3: be able to enjoy the benefits of staking rather than
Speaker 3: some of the larger institutional users that maybe hold many
Speaker 3: more tokens than five Yeah.
Speaker 1: Yeah, well, I think that's going to be you may
Speaker 1: find a lot more institutional getting into this, you know,
Speaker 1: in the in the future, just because of the staking
Speaker 1: features within this, and especially as you guys start to
Speaker 1: roll into full full payroll systems. I think that's when
Speaker 1: you open up the multi trillions in the market, that's
Speaker 1: really going to be in capacity there. What would that
Speaker 1: look like for you guys in a five year roadmap?
Speaker 3: Well, I mean, in terms of our roadmap, I think
Speaker 3: our number one priority right now on the payroll side
Speaker 3: is building out our enterprise solutions so that way we
Speaker 3: can serve any sort of company. Right, every company is
Speaker 3: a different use case. They have treasury needs, for example,
Speaker 3: So we're bringing a treasury solution to market that's going
Speaker 3: to sit within that, it's going to have yield in it,
Speaker 3: so that way enterprises that hold stable coins will are
Speaker 3: in a very competitive yield and they'll have more of
Speaker 3: an incentive to hold funds on chain rather than in
Speaker 3: their bank account. We're also going to have direct bank
Speaker 3: account to stable coin APIs, so that's going to be
Speaker 3: offered through Circle as well as through ripple payments, meaning
Speaker 3: that if you're an enterprise that doesn't have fireblocks set up,
Speaker 3: or doesn't have a custody solution, doesn't want to hold
Speaker 3: stable coins, you can still keep your treasury in the
Speaker 3: bank account and at the click of a button when
Speaker 3: you need to fund payroll, it converts into stable coin
Speaker 3: and it loads into the zebek app and then the
Speaker 3: payroll magic begins.
Speaker 2: I like it, okay.
Speaker 1: One thing that I'm seeing utilized a lot by our
Speaker 1: own followers, members of our own bar and market edge,
Speaker 1: because we talk a lot of about where and how
Speaker 1: to get the most yield. One thing that is interesting
Speaker 1: is some of the hardware wallets now are allowing.
Speaker 2: What they call yield mode.
Speaker 1: So if you've got asked it's in your hardware wallet,
Speaker 1: you can go into yield mode, they flip it out
Speaker 1: to the market into DeFi earn the best that they
Speaker 1: can for you. Are you guys planning any of that
Speaker 1: that you'd be able to do inside the zebek wallet
Speaker 1: or even the card itself.
Speaker 3: It's something that we are exploring, to be honest with you.
Speaker 3: We are starting with more vanilla yield options that are
Speaker 3: extremely low risked because at the end of the day,
Speaker 3: enterprises don't have the highest risk tolerance when it comes
Speaker 3: to their balances. So we've gone more for the native
Speaker 3: yield solutions. For example, we're going live next week with
Speaker 3: us X, which is a stable corn at Salona that
Speaker 3: offers high single digits yield natively, which is very exciting.
Speaker 3: And then some of the larger ecosystems as well are
Speaker 3: bringing yield bearing stable coins into the zebec app. So
Speaker 3: currently we do not offer the defile yields, but it's
Speaker 3: something that we're going to consider on the horizon for sure.
Speaker 2: That's good.
Speaker 1: That's good, that'll be interesting to see. Listen, this news
Speaker 1: popped out today. You got MasterCard going into agents which
Speaker 1: are beginning to act. So right now they're introducing a
Speaker 1: MasterCard agent pay for machines.
Speaker 2: So you think.
Speaker 1: About this, You've got maybe a whole new class of
Speaker 1: payments being developed here. At what time do you think
Speaker 1: this rolls into the rest of the finance market or
Speaker 1: do you think this is going to take some time
Speaker 1: to really make its way into the market.
Speaker 3: Well, I think we are still very much in the
Speaker 3: early innings for agent pay and a bech. We really
Speaker 3: never sought out to build an energenic payroll and payment solution,
Speaker 3: but in many ways what we've built in terms of
Speaker 3: our rails works incredibly well for AI agents. Right. Yeah,
Speaker 3: you're running payroll on chain. You don't need an HR
Speaker 3: manager to authorize every single payment, right, it's all programmed
Speaker 3: through art contracts. You set limits, you set controls, and
Speaker 3: then the agents run with it. In payroll really starts
Speaker 3: to run like clockwork. The fraction of the cost. Right
Speaker 3: when you think about what typical companies are paying for payroll,
Speaker 3: typically they're paying between twenty to thirty dollars per employee
Speaker 3: per months. Do the math on how much a fortune
Speaker 3: five hundred with one hundred thousand employees is paying. That
Speaker 3: doesn't even include their HR departments, right, this is just
Speaker 3: what they're paying the ADPs and the paychecks of the
Speaker 3: roles now add on an HR department, right which includes
Speaker 3: many people that are running payroll and deal with tax forms.
Speaker 3: So our view is that a lot of that can
Speaker 3: be automated. And similarly with corporate cards, as you mentioned
Speaker 3: with master cards, the corporate cards are now going to
Speaker 3: also need to function within the aegetic ecosystem, and by
Speaker 3: running a corporate card on a stable coin is so
Speaker 3: much more efficient and easier to track on chain that
Speaker 3: we believe that's the way the market's going to go
Speaker 3: when agents take over.
Speaker 1: So right now today zebec can manage all of business's
Speaker 1: payments or an enterprise's payments to their contractors, and it
Speaker 1: can do it.
Speaker 2: Within is it within the super app? Or do I need.
Speaker 3: Within the enterprise payroll app? Okay? The errise Pero app
Speaker 3: is it's a business version of the super app?
Speaker 2: Okay, gotcha?
Speaker 1: And right now that's tracking all the payments to individual contractors,
Speaker 1: no matter what country, right correct?
Speaker 2: Okay?
Speaker 1: Within that, what kind of reporting features do I have
Speaker 1: as a business to be able to track all those contractors?
Speaker 3: So there's an HR view where you can see all
Speaker 3: of the contractors, you can see what they're what they're earning,
Speaker 3: we can see who they report to, so almost like
Speaker 3: a corporate organizational hierarchy. Okay, and then at the end
Speaker 3: of the month or the end of the quarter, when
Speaker 3: you need to do your financials as a business, you
Speaker 3: can produce all of that as an easy download to Excel.
Speaker 3: You can also send tax forms ten ninety nine slips
Speaker 3: to your contractors as well as it's all built into
Speaker 3: the app.
Speaker 2: Yeap. That is a that's a good feature.
Speaker 1: I think that is something right now because I know
Speaker 1: a lot of companies. We we do our wealth management
Speaker 1: and it's mostly business owners that I talk to a lot,
Speaker 1: And this is the question that's always brought up is payroll,
Speaker 1: you know, and contractors here in South Florida where we
Speaker 1: are a lot of contractors, gig workers.
Speaker 2: That are really kind of of working with a lot of.
Speaker 1: These companies and they want to go to blockchain, they
Speaker 1: want to go to stable coin, but they can't find
Speaker 1: a platform that gives them any kind of audit trail.
Speaker 1: And right now most of them are having to kind
Speaker 1: of muscle it through where they'll use a typical transaction
Speaker 1: via the blockchain and then track it in a spreadsheet.
Speaker 2: It's very clunky for some of these base it's a
Speaker 2: huge headache.
Speaker 3: And if you want some of these larger gig economy companies,
Speaker 3: you know, like the Ubers of the world, the international world,
Speaker 3: you need to have that seamless reporting both for the
Speaker 3: corporate as well as for the gig worker.
Speaker 1: Yeah, well, I think that's the key is the gig
Speaker 1: worker is pretty big. You look at the enterprise adoption
Speaker 1: correlation right now, what the potential here is because this
Speaker 1: gets into you know, what is this going to be worth?
Speaker 1: You're talking eighty five trillion I think in ACCH connections
Speaker 1: right now. You look at the potential for this in
Speaker 1: terms of payments.
Speaker 2: How does it.
Speaker 1: Right at least right now, How does a web three
Speaker 1: protocol directly plug into these traditional banking rails that you're
Speaker 1: doing today, because I'm assuming you have to be able
Speaker 1: to deal with at some point when you scale to ACCH,
Speaker 1: you've got to be able to connect to all these
Speaker 1: banks and pretty much real timeout.
Speaker 3: It's it's a great question, and we've been very forward
Speaker 3: thinking at zebek about getting ourselves plugged into the ACCH
Speaker 3: and the traditional banking system from the very beginning, because
Speaker 3: there's really no other way that you're going to work
Speaker 3: with traditional non Web three companies. So we've been involved
Speaker 3: now with NATCHA for the better part of a half
Speaker 3: a year. NATCHA, of course, is the organization that governs
Speaker 3: the US ACCH network. We are one of the few,
Speaker 3: if only, crypto companies that that's part of the NATCHA alliance,
Speaker 3: which is very exciting because we've now been at the
Speaker 3: forefront as they start to think about stable coin and
Speaker 3: modernizing the ACA system. Right Okay. We also work with
Speaker 3: some of the largest payment companies in the US that
Speaker 3: are direct members of natro so companies like not pay
Speaker 3: for example, right, which is our real direct connection to
Speaker 3: AC and it allows us in our enterprise clients to
Speaker 3: move on seamlessly from the stable coren payroll world into
Speaker 3: the FIAT world.
Speaker 2: I like it.
Speaker 1: You look at this the gig economy impact. I think
Speaker 1: this is going to be pretty big, especially as we
Speaker 1: start to see more and more self employed workers.
Speaker 2: This idea of.
Speaker 1: Continuous payment, which is a big deal streaming payments. Think
Speaker 1: of about it on a cash flow crisis really for
Speaker 1: a lot of people.
Speaker 2: Do you think this is going to get adopted? Streaming
Speaker 2: payments to contractors any type soon.
Speaker 3: Well, we've seen a lot of early tractions, so I
Speaker 3: would say to your question, absolutely, the demand is there, Yeah,
Speaker 3: from the contractors and the employees. When you think about it,
Speaker 3: we are going through probably one of the worst cost
Speaker 3: of living crises in generations. Many people are having trouble
Speaker 3: having ends meet, and the two week or thirty day
Speaker 3: pay cycle really is not serving people today. When you
Speaker 3: think about it, payroll has not changed materially in the
Speaker 3: past seventy years. The reason is because of the friction
Speaker 3: of payments right. It comes down to the antiquated banking
Speaker 3: systems ACCH, swift networks in your mediaries that hold funds
Speaker 3: for days, and with blockchain technology we can completely rebuild
Speaker 3: the system. But the marginal cost of an additional payment
Speaker 3: is so fractionally small that it doesn't really make a
Speaker 3: difference in the grand scheme of things as how frequently
Speaker 3: you pay people. And you'll see early employer groups that
Speaker 3: actually adopt real time payroll, and you'll see them win
Speaker 3: the HR battle. They will have better employee retention, a
Speaker 3: lot of higher employee satisfaction, they'll win in terms of hiring,
Speaker 3: and from there, in my view, the snowball effect will
Speaker 3: then continue to grow and more and more companies will
Speaker 3: just have to adopt it to be competitive.
Speaker 1: Well, I think you're right, they're going to win. When
Speaker 1: you start to see streaming payments in the gig economy,
Speaker 1: that is going to migrate a lot in terms of
Speaker 1: earth and I think we're going to see a lot
Speaker 1: of new businesses in terms of the kinds of businesses
Speaker 1: that it will be serving the gig econo. I mean,
Speaker 1: especially we start to see everything from autonomy, most likely
Speaker 1: that we'll start to attack places like Goober. I think
Speaker 1: it's going to open up a lot of these gig
Speaker 1: workers to have multiple companies that they're dealing with. So
Speaker 1: anybody that has these kind of features, it's going to
Speaker 1: be huge for sure. Hey, let me get your opinion
Speaker 1: on this. This was of course news earlier this week
Speaker 1: where Stripe of Visa, MasterCard, Coinbase forming a consortium and
Speaker 1: this is in reference to a new stable coin, and
Speaker 1: you've got Circle and Tether really kind of controlling the
Speaker 1: market right now. When you look at this move, because
Speaker 1: this is a pretty significant move. I mean, these three
Speaker 1: of the biggest finance guys and then you book the
Speaker 1: biggest crypto guy in there. I would say, in terms
Speaker 1: of exchange, what does this landscape look like once we
Speaker 1: get past.
Speaker 2: The clarity Act.
Speaker 3: My view is that we're going to see more and
Speaker 3: more corporate and institutional backstageable coins popping up. It's not
Speaker 3: going to be one stable coin that fits all, just
Speaker 3: like there's not going to be one blockchain that fits all.
Speaker 3: This is a good thing for the ecosystem, This is
Speaker 3: a good thing for competition, this is a good thing
Speaker 3: for consumers. And the beauty of what we have it's
Speaker 3: beck is then we'll be able to work with any
Speaker 3: stable coin that comes up. So you know, if if
Speaker 3: market sent thement changes and if volumes move to another
Speaker 3: stable coin, our rails will be able to support it.
Speaker 3: So I think now things like this are a great
Speaker 3: early sign that there's a lot of life and growth
Speaker 3: in the stable coin market well.
Speaker 1: And I think the key here is going to be
Speaker 1: how those entities launch those kinds of products and the
Speaker 1: process that they end up in. Because if you look
Speaker 1: at some of the big entities that have been very
Speaker 1: good at that not in the stable coin side, but
Speaker 1: think of it almost like the Starbucks app. If you
Speaker 1: go in and look at their reward system. Even though
Speaker 1: they've kind of got a lot of torching because of
Speaker 1: their devaluation of reward points.
Speaker 2: That's another story, but the point is is they've got
Speaker 2: all these users.
Speaker 1: They've got a ridiculous amount of users that in some
Speaker 1: cases we'll bank money in that card to.
Speaker 2: Be able to feed their starbuck habit.
Speaker 1: Do you think that is the kind of potential enterprise
Speaker 1: use case that we may see coming out of retail giants.
Speaker 3: Absolutely. I think it makes sense for all of the
Speaker 3: major retail companies in the US to eventually issue stable coins. Right,
Speaker 3: they control their own currency, they get the benefit of
Speaker 3: the float that yield flows to them, So it'll end
Speaker 3: up being a profit center on the line items of
Speaker 3: these companies, just like credit card solutions were in the past, Right,
Speaker 3: So I think we're going to see a lot of
Speaker 3: that moving over from credit solutions to stable card solutions.
Speaker 1: Well, and think about it, if you really let retailers
Speaker 1: start to maximize that in the DeFi space, and because
Speaker 1: the retailers themselves have, you know, kind of that trust
Speaker 1: and control value point that they bring to all of
Speaker 1: their customers, it does create a new line item and
Speaker 1: I think in terms of profitability or maybe just in differentiation,
Speaker 1: you know, down into the market, which is going to
Speaker 1: be pretty critical I think for some of these companies
Speaker 1: to kind of win over, especially today's modern consumer.
Speaker 3: For sure, we're really only ten ton months insince the
Speaker 3: GENISAC passed. Yeah, Jackles not passed yet. A lot of
Speaker 3: these large companies we know are are currently looking at it.
Speaker 3: They're trying to find expertise into how to launch a
Speaker 3: stable coins. So in the next few years, we're going
Speaker 3: to see more and more come to the market. But
Speaker 3: you just have to keep in mind that they've only
Speaker 3: started looking this now in the past couple of months.
Speaker 1: I got to talk to you after the show and
Speaker 1: I kind of get your opinion on something we we
Speaker 1: of course have a consulting group, we have an investment
Speaker 1: fund that we're working with right now, both on blockchain
Speaker 1: and also on kind of next generation companies out there.
Speaker 2: And retail is one of them.
Speaker 1: Payments has always been very close to my heart because
Speaker 1: our connection to the retail space and has been for a.
Speaker 2: Very long time. We understand it pretty heavily.
Speaker 1: So i'd love to get your insights on that last
Speaker 1: thing I want to hit you with in terms of
Speaker 1: kind of the three year vision here of where real
Speaker 1: world assets and PAYFI markets start to mature as we
Speaker 1: head toward the end of the decade. How do you
Speaker 1: see this all lining up, Where do you see use cases?
Speaker 1: And also what do you think ends up winning when
Speaker 1: it comes to RWA and pay fie good question.
Speaker 3: I mean, the way we think about it is payroll
Speaker 3: is just the first and most successful so far use
Speaker 3: case of real time finance technology. So what we've built
Speaker 3: at zebec has been tested now in the payroll market,
Speaker 3: and from here we're going to expand into B to
Speaker 3: B payments, cross border international payments, et cetera.
Speaker 2: Yep.
Speaker 3: So the way that we've set things up is that
Speaker 3: we'll plug directly into all different types of blockchains, will
Speaker 3: be able to integrate with real world assets, meaning that
Speaker 3: if you're receiving your payroll on stable coins, you'll also
Speaker 3: will be able to reinvest it in tokenized equities, token
Speaker 3: ized bond funds. So that way the entire economy can
Speaker 3: exist on chain, on our rails and will continue to
Speaker 3: track our key success metrics over the next couple of years.
Speaker 3: And really for us, it comes down to the number
Speaker 3: of people that are using stable cooin payroll. Our share
Speaker 3: a wallet of organization. So if stablecore payroll is offered
Speaker 3: alongside traditional payroll, what is our percentage in year one,
Speaker 3: year two, year three, how that grows and how that
Speaker 3: tracks Because what we've seen in some of our early
Speaker 3: pilot programs is that once employees and contractors get used
Speaker 3: to receiving some payments and stable coins and most importantly
Speaker 3: trust the system, they're more willing and able to accept
Speaker 3: more stable coin payments going forward. So it's really about
Speaker 3: getting your footing in the door, getting a piece of
Speaker 3: the share, and growing it with time. As we have
Speaker 3: enormous market tail ones behind us right now in the
Speaker 3: stable point space.
Speaker 1: Yeah, it's going to be huge going into twenty thirty.
Speaker 1: And I think the adoption curve that we're going to
Speaker 1: see on the enterprise side is going to surprise a
Speaker 1: lot of people because there's just so much pent up
Speaker 1: demand and in.
Speaker 3: Part of deducing its publicly, I mean, we have NDA's
Speaker 3: with countless companies right now that we cannot talk about,
Speaker 3: but they will be coming to market publicly with it
Speaker 3: in the next months of the next few years. Interesting. Okay,
Speaker 3: a lot of it's happening behind the scenes right now
Speaker 3: is not many of these bigger companies are not comfortable
Speaker 3: to talk about stable corns publicly.
Speaker 1: Right, Well, I think yeah, because if just the aura
Speaker 1: of crypto a lot of times attaches to that, I
Speaker 1: think there needs to be a little bit of a
Speaker 1: branding refresh for stable going companies to kind of go
Speaker 1: Stripes doing a pretty good job with it. MasterCard Visa
Speaker 1: most likely will will kind of help bridge that gap.
Speaker 1: And most likely if you get someone major like American Express,
Speaker 1: or you get a major retailer or a major financier
Speaker 1: whether it's JP Morgan or someone like that in the
Speaker 1: banking sector, that starts to move in this direction. It's
Speaker 1: not that that's the best way. It's just that they've
Speaker 1: had the historical credibility you know that a lot of
Speaker 1: these companies are looking for.
Speaker 2: So I agree with.
Speaker 3: You, And it takes years to build that, so it's
Speaker 3: not something that happens overnight.
Speaker 2: Yeah, for sure.
Speaker 1: Hey, Simon, it's been good having you on the show.
Speaker 1: As usual, we love to pick brains of the smartest
Speaker 1: people in the world on all of this when it
Speaker 1: comes to blockchain, So thanks for coming in.
Speaker 3: Thanks for having me, Paul, It's been a great job,
Speaker 3: all right.
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