Speaker 1: I was really annoyed that we are building this new
Speaker 1: kind of financial system and yet we're not using it.
Speaker 1: Crypto companies have historically had trouble getting bank accounts. We
Speaker 1: have these like Telegram support crew trying to figure out
Speaker 1: which banks will even talk to you.
Speaker 2: It's ten years from now, it's twenty thirty five. Are
Speaker 2: stable coins running through the rails of the economy of
Speaker 2: payroll or sending money overseas? Buy some coffee?
Speaker 1: Yeah, I think unquestionably yes.
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Speaker 2: more about uphold and all the great services they offer,
Speaker 2: visit the link in the description. Hey folks, welcome into
Speaker 2: the Thinking Crypto Podcast. I'm your host, Tony Edward, and
Speaker 2: joining me is Megan Nab who is the founder and
Speaker 2: CEO of Franklin. Megan, great to have you.
Speaker 1: Great to be here, Megan.
Speaker 2: I'm excited to learn more about Franklin and all the
Speaker 2: great solutions you're building for businesses to handle their finances
Speaker 2: both on and off chain. As we've seen crypto adoption
Speaker 2: continue to grow, stable coin legislation has passed into law,
Speaker 2: so I think it's very timely I'm chatting with you,
Speaker 2: But let's kick it off with your background. Tell us
Speaker 2: a bit about yourself, where you're from, and your professional background.
Speaker 1: Yeah sure, well, thanks again for having me excited to chat. Yeah. Background,
Speaker 1: native New Yorker, lived in New York most of my life.
Speaker 1: I got ended up getting into crypto actually sort of
Speaker 1: by being a New Yorker. In my early twenties, I
Speaker 1: was living in Bushwick, Brooklyn, with like a zillion roommates.
Speaker 1: I was working on Wall Street, going to business school
Speaker 1: at night. I would spend my weekends doing my grad
Speaker 1: school homework in a cafe in Bushwick that happened to
Speaker 1: be the Swallow Cafe, which was right below the Consensus
Speaker 1: Office which Consensus was an early venture product studio in
Speaker 1: the Ethereum space back in twenty sixteen, and happened to
Speaker 1: just meet some people that worked there and got hooked
Speaker 1: on crypto for a lot of different reasons, but one
Speaker 1: of them was proximity. So that's a very like quick
Speaker 1: quick background on myself. AM a classically trained accountant, worked
Speaker 1: as a staff accountant for a couple of years and
Speaker 1: really like got excited about the Ethereum space, specifically initially
Speaker 1: as a way to create open source accounting standards and
Speaker 1: so have been doing a bunch of wonky accounting technology
Speaker 1: out of initiatives since since then.
Speaker 2: You know what you guys, you were talking about being
Speaker 2: in Bushwick at one point. I think it was twenty sixteen.
Speaker 2: I think it was. I was living in Bushwick temporarily
Speaker 2: as my wife and I were transitioning to move to
Speaker 2: Jersey to Hoboken, So I we I'm at some point. Yeah,
Speaker 2: we may have crossed paths not knowing each other. But
Speaker 2: it's so funny how the world works. And and and
Speaker 2: I you know, we were in Brooklyn Highs for a
Speaker 2: while as well. You know you mentioned Consensus and the
Speaker 2: folks at etherorem and they're based in Brooklyn and been
Speaker 2: building for years. So it's so amazing how things have
Speaker 2: changed from small, small, startup, small industry to now this
Speaker 2: huge financial movement and new asset class.
Speaker 1: So yeah, yeah, looking at things in retrospect, it is
Speaker 1: shocking how much has happened in less than a decade.
Speaker 1: I went to the Consensus offices in Bushwick actually a
Speaker 1: couple months ago for the first time in a long time,
Speaker 1: and it's funny, like a lot of it, it's still
Speaker 1: the same, but so much as the context is all different.
Speaker 1: So certainly like a thrilling industry to be in, and
Speaker 1: wouldn't want to be anywhere.
Speaker 2: Else absolutely, So tell us about what led to the
Speaker 2: founding of Franklin. Where did the idea come from.
Speaker 1: Yeah, so Franklin has. It was sort of just born
Speaker 1: out of frustration that I had personally doing accounting for
Speaker 1: Web three companies. It's my second startup, you know, after
Speaker 1: my last startup ended spent some time consulting doing basically
Speaker 1: just like fractional CFO services for different startups in the
Speaker 1: Web three space. And something that I noticed was all
Speaker 1: these companies are using the same kind of tradfy stack
Speaker 1: to build their businesses that you know, every other startup
Speaker 1: outside of Crypto was using. And I was so frustrated
Speaker 1: by that, and I was really annoyed that, like, we
Speaker 1: are building this new kind of financial system and yet
Speaker 1: we're not using it. So, yeah, born out of frustration,
Speaker 1: and so you know, I had a little bit of
Speaker 1: a background doing startup be things myself and started prototyping
Speaker 1: Franklin within a company that I was working at called Serotonin,
Speaker 1: which is a Web three marketing studio as well as
Speaker 1: a venture product studio, kind of like you know, a
Speaker 1: second generation. A lot of people that worked at Consensus
Speaker 1: were working at Serotonin, so it was like very easy
Speaker 1: for me to land there, but yeah, as the person
Speaker 1: running finance and you know, trying to help guide some
Speaker 1: strategy and how can we differentiate ourselves in market and
Speaker 1: how can we track Like the top web three to
Speaker 1: to come and work with us was, yeah, how do
Speaker 1: we start using this technology for ourselves internally? You know,
Speaker 1: what pieces of financial operations could we bring on chain?
Speaker 1: We had a lot of issues with managing payroll we
Speaker 1: had you know, when I got there, there were ten people.
Speaker 1: We grew it to over sixty people all around the world.
Speaker 1: The pandemic happened, everybody moved to or was initially doing
Speaker 1: remote working. So it seemed like a really good use
Speaker 1: case to figure out, like how can we enable this borderless,
Speaker 1: permissionless technology on our balance sheet. So prototyped it within
Speaker 1: Serotonin and then kind of before I knew it, we
Speaker 1: were spinning out, raising around, getting our first customers, hiring
Speaker 1: our team. Kind of a whirlwind moment.
Speaker 2: That's awesome and congrats, and you know, it's kind of
Speaker 2: the true entrepreneur's journey. You found a problem and you
Speaker 2: wanted to build a solution, and obviously you were very
Speaker 2: frustrated by that problem. So that's that's really cool. Now
Speaker 2: it break down to different services and solutions you offer
Speaker 2: for those who may not be familiar with the whole
Speaker 2: payroll set up, and how finances work on the back
Speaker 2: end for businesses, and how you're integrating crypto there.
Speaker 1: Yeah, so I think when you're looking to hire your
Speaker 1: first employee into a business, there's like a very steep
Speaker 1: learning curve, especially when you're operating in the United States.
Speaker 1: There are a lot of labor regulations, there are a
Speaker 1: lot of tax nuances depending on where you operate. And
Speaker 1: the thing about like being in the US is every
Speaker 1: state kind of acts like its own country in a
Speaker 1: lot of ways, So you have a lot of administrative overhead.
Speaker 1: So there's some level of like how do we make
Speaker 1: this administrative overhead attainable and put it into these byte
Speaker 1: sized pieces for companies that are just getting started. You know,
Speaker 1: three years ago when I started the company, you know,
Speaker 1: most of the businesses in the web three space were
Speaker 1: just like very early stage startups figuring out how to
Speaker 1: like bootstrap to get together or they're just you know,
Speaker 1: getting in their first round of VC funding, so figuring
Speaker 1: out how do we go from like that zero to
Speaker 1: one and help them just start doing everything above board.
Speaker 1: The next piece is, yeah, like the money movement. So
Speaker 1: crypto companies have historically had trouble getting bank accounts and
Speaker 1: being able to maintain those bank accounts. So this is
Speaker 1: an area that like I have struggled with. We have
Speaker 1: these like telegram almost like support groups of people who
Speaker 1: work in crypto finance trying to figure out you know,
Speaker 1: which banks are we'll even talk to you in the
Speaker 1: first place. So there was another level of like, Okay,
Speaker 1: here is a set of vendors that we can create
Speaker 1: repeatable processes with so that companies can start up. And
Speaker 1: then what parts of those processes can we be moving
Speaker 1: on chain in a way that is maintaining a good
Speaker 1: user experience, making sure that you're now creating a lot
Speaker 1: of accounting overhead, and then also yeah, it's just faster, cheaper,
Speaker 1: and also compliant from like a HR labor regulation perspective.
Speaker 1: Sometimes companies, you know, I've seen kind of get into
Speaker 1: a tough spot where they are operating doing a lot
Speaker 1: of things on chain and then they have to go
Speaker 1: back and pay an outsourced accounting firm like one hundred
Speaker 1: thousand dollars that they don't really have or can't really
Speaker 1: ford just to clean up their books, and so figuring
Speaker 1: out how do we make sure all that stuff is
Speaker 1: easily kind of attainable from from day one was part
Speaker 1: of our you know, go to market thesis. There are
Speaker 1: a lot of pieces, honestly, but those are some of
Speaker 1: the first ones that we kind of started trying to tackle.
Speaker 2: So are you using primarily E theorem as to power
Speaker 2: some of these services or are you using other blockchains
Speaker 2: or do you have a layer two? How's that set up? Yeah?
Speaker 1: Yeah, we launched initially actually on Polygon. We are EVM
Speaker 1: based and the crypto side of Franklin is all non
Speaker 1: custodial smart contracts, So yeah, you can operate on a
Speaker 1: theory mainenet, you can be on their layer twos like Optimism, Arbitrum, Base,
Speaker 1: et cetera. We have customers across all of those chains,
Speaker 1: and it is this other just kind of like innovation
Speaker 1: in payroll tech in general, where you can actually have
Speaker 1: a non custodial payroll product. And really all that Franklin
Speaker 1: is doing is helping you calculate an account for the payroll,
Speaker 1: but all of the money movement sits with you and
Speaker 1: your employees or contractors or whatever. So, yeah, smart contracts
Speaker 1: are awesome and they're the base of like our crypto
Speaker 1: kind of tech stack.
Speaker 2: So let's walk through a kind of a mock scenario here.
Speaker 2: I have the Thinking crypto podcast business. It's a small business,
Speaker 2: but I have a video editor, I have a podcast
Speaker 2: tech and they want to get paid in stable coins.
Speaker 2: Can Franklin help me to do that? And how would
Speaker 2: you help me to execute that?
Speaker 1: Yeah? Yeah, one hundred percent they can. So basically, when
Speaker 1: you sign a company up with a Franklin account, we
Speaker 1: will deploy a smart contract under the hood that sits.
Speaker 1: You can interact with it through our app. You can
Speaker 1: also interact with it outside of our app if you prefer,
Speaker 1: and if you're comfortable kind of like making on chain
Speaker 1: smart contract calls. But basically, you get your own smart contract.
Speaker 1: Funds are never co mingled with another company smart contract
Speaker 1: or anything like that. That's another thing that's kind of
Speaker 1: unique about, you know, our architecture. And then when your
Speaker 1: workers sign up, like they sign up for any sort
Speaker 1: of payroll account or like build dot com account, they
Speaker 1: can connect a wallet and by that kind of like connection,
Speaker 1: it ensures that you're always paying the right person. Every
Speaker 1: single time we've seen crypto payments companies go through, you know,
Speaker 1: kind of like hacks or cybersecurity things by manual data
Speaker 1: entry or needing to do file uploads. This on chain
Speaker 1: smart contract signature ensures that never is a problem. So
Speaker 1: that's that's roughly how it works. There are a lot
Speaker 1: of other ways it can work too. If your company
Speaker 1: only has FIAT like USD and a bank account and
Speaker 1: you want to settle it out and and stable coins,
Speaker 1: we can also do that. If you want to fund
Speaker 1: payroll in stable coins, then have it settle in your
Speaker 1: employee bank accounts in FIAT, we can also do that.
Speaker 1: So there are a lot of different permutations of how
Speaker 1: it can work. We do work with some companies that
Speaker 1: are really they have absolutely nothing to do with crypto,
Speaker 1: and we are just moving stable coins under the hood
Speaker 1: for them to have a faster payroll cycle, which is
Speaker 1: something that I'm really excited about. I think it's the
Speaker 1: future of payments tech. But yeah, there's there's a lot
Speaker 1: a lot you can do.
Speaker 2: I want to double click on what you just said
Speaker 2: there with making the payroll cycle faster. Even though those
Speaker 2: folks have nothing to do with crypto, they don't even
Speaker 2: know maybe that's happening. How are you pitching that though?
Speaker 2: Are you telling them that this is being settled or
Speaker 2: being moved with stable coins. I'm just curious, you know,
Speaker 2: how you present that to them, given that to your point,
Speaker 2: this is the future because people are going to be
Speaker 2: interacting with stable coins whether they know it or not. Yeah.
Speaker 1: Yeah, I mean to be honest, and I like extremely
Speaker 1: naively when some of these companies first, we were not
Speaker 1: pitching them at all, Like they had some kind of
Speaker 1: like forward thinking bookkeeper in their back office being like
Speaker 1: I heard, we can actually run payments faster if we're
Speaker 1: using stable coins, and like they googled us and found us,
Speaker 1: which was like very exciting to see, honestly. But yeah,
Speaker 1: I mean, there are a lot of businesses out there
Speaker 1: that have really compressed cash flows that like really put
Speaker 1: a lot of pressure on their business. We've seen an
Speaker 1: industry kind of like pop up around extracting value from
Speaker 1: those companies that are just trying to live paycheck to paycheck,
Speaker 1: so to speak. That should not be the case, you know,
Speaker 1: So the fact that you have all these middlemen between
Speaker 1: you and your workers or you and your customers, you
Speaker 1: know this idea that we can be using stable coins
Speaker 1: as a tool as a different kind of orchestration level
Speaker 1: of USD and speed up fun flows. It can totally
Speaker 1: change business models, it can totally changed compensation models, and
Speaker 1: so that's like really what we're excited about. I think,
Speaker 1: like in terms of the messaging, I don't think we've
Speaker 1: cracked the right messaging for it yet. You know, there's
Speaker 1: so much kind of like fud I would say still
Speaker 1: among like the general population around crypto. I think that
Speaker 1: stable points have a little bit of a different narrative
Speaker 1: as of like you know, maybe a month ago or
Speaker 1: with the advent of like the Genius Act, and it's
Speaker 1: just being in the headlines more in the United States,
Speaker 1: So you know, it is I think still kind of
Speaker 1: at this level of being like a little technical sciance.
Speaker 1: Like if you're talking to an accountant who has some
Speaker 1: like level of familiarity, it's an easy conversation to have
Speaker 1: to say, hey, we can move some of this on chain.
Speaker 1: There's no intermediary, you know, like that's it. It's just
Speaker 1: you and your money, and we can help you figure
Speaker 1: out how to do that. But I would say, for
Speaker 1: like the population is really not something that is easily consumable.
Speaker 2: Yet yeah, there are the education aspects still need to
Speaker 2: be done there.
Speaker 1: Yeah, And there's something else that I think is a
Speaker 1: little insidious about the stable coins space and the prolition
Speaker 1: proliferation of stable coins recently, which is a lot of
Speaker 1: these stable coins are sitting in these walled gardens still
Speaker 1: and they're not that different from payments networks like ach
Speaker 1: or Swift because they're being totally custodied by banks or
Speaker 1: by other payments networks, And basically the value add is
Speaker 1: it's helping their bottom line and end users. Actually, if
Speaker 1: you look at using stable coins on you know, PayPal
Speaker 1: or some of these others, right, which no offense to
Speaker 1: those technologists that are building that tech, but it's a
Speaker 1: lot more expensive for the end user. And where's the
Speaker 1: innovation in that. The innovation of stable coins is that
Speaker 1: they can be non custodial and and I think that's
Speaker 1: something that we have to kind of keep a critical
Speaker 1: eye on as we see more of these trad fi
Speaker 1: companies starting to leverage stable coins, Like is it actually
Speaker 1: benefiting the end user or not?
Speaker 2: Yeah, because a big part of it, many of them
Speaker 2: see the money tether's making they want to cut that revenue.
Speaker 2: They want to have the payout some of the treasury
Speaker 2: holding the debt and so forth. And yes, it's backing there,
Speaker 2: it's in part of the reserves. But they're making a killing. Yeah,
Speaker 2: and that's kind of the business almost versus hey, we
Speaker 2: want to make payments faster.
Speaker 1: Yeah, exactly, exactly.
Speaker 2: Two part question which stable coins are you supporting? And
Speaker 2: let's say my podcast sech once you get paid in
Speaker 2: bitcoin or Salon or XRP, can you facilitate that as well.
Speaker 1: Yeah. So we are not very prescriptive about the kinds
Speaker 1: of assets that our customers want to use. There are
Speaker 1: some limitations depending if you want to be off ramping
Speaker 1: or on ramping between fiat. The most popular one that
Speaker 1: our customers use by far is you SDC, which is
Speaker 1: issued by Circle that just went public this year. Some
Speaker 1: companies that have more of a global contractor base will
Speaker 1: use Teather, which is just more popular outside of the
Speaker 1: United States. The criteria that we have for supporting assets
Speaker 1: is really we can whitelist them in our app and
Speaker 1: then you know, we do a check to see like
Speaker 1: is it classified as a security. We cannot help or
Speaker 1: do anything in the securities realm since we're not a
Speaker 1: broker dealer, so we'll never touch that kind of stuff. Yeah,
Speaker 1: that's kind of the criteria most people want to use USDC.
Speaker 1: That's just like the reality of it. We do have
Speaker 1: some customers that will pay their employees in other kinds
Speaker 1: of assets, like we have one customer that pays their
Speaker 1: team and wrapped bitcoin. So the criteria does have to
Speaker 1: be from a technical side that it has to be
Speaker 1: an EERC twenty token, which is something that can interact
Speaker 1: with a smart contract in an automated fashion. Some things
Speaker 1: like we're going to add support for Solana. We don't
Speaker 1: have Ripple, never met anybody that wants to use Ripple,
Speaker 1: would love to chat to anybody who does. We're really
Speaker 1: much more kind of like demand focused. Do you have
Speaker 1: a lot of these kinds of like issuers come to
Speaker 1: us and say, hey, can you make us the preferred
Speaker 1: stable coin or preferred asset, and the answers always know
Speaker 1: it's our customer's choice what they want to use. We're
Speaker 1: rinding for a second, just paying people in other kinds
Speaker 1: of like assets that are not tied to a fiat currency.
Speaker 1: There are a ton of regulations around how that needs
Speaker 1: to work. And that's also one of the special sauces
Speaker 1: of Franklin, which is like, we will make sure that
Speaker 1: you are compliant with the labor regulations of your jurisdiction.
Speaker 1: So there's a lot of very interesting legal precedent for
Speaker 1: some of this kind of stuff, which goes back actually
Speaker 1: to Appalasia during the coal mining boom, where you had
Speaker 1: people working for coal mining companies that were getting paid
Speaker 1: and come any certificates and then could only use them
Speaker 1: at the company grocery store, and then you could never
Speaker 1: get out of that economy. And so you know, West
Speaker 1: Virginia with one of these states that actually led a
Speaker 1: lot of the modern sort of labor compensation regulations you
Speaker 1: know in the twentieth now twenty first centuries. So you
Speaker 1: have a lot of places say you have to be
Speaker 1: paid in a USD denominated asset. Some states will also
Speaker 1: just explicitly prohibit crypto. They have these like blanket regulations
Speaker 1: which we just can never touch. So that's why it's
Speaker 1: also important to have like this hybrid option where it's
Speaker 1: very hard to operate one hundred percent on chain natively
Speaker 1: right now, So having the spectrum of a flexibility and
Speaker 1: kind of like a nicer user experience packaged up in
Speaker 1: this piece of software is very effective.
Speaker 2: Yeah. Absolutely. I love that you guys are agnostic when
Speaker 2: it comes to the assets, but you also make sure
Speaker 2: you're following the law and you know, not putting your
Speaker 2: clients at risk, but making sure they everything is copasetic
Speaker 2: with what they're trying to do. So that's really really great.
Speaker 2: And you have the flexibility as well. Do you think
Speaker 2: you know you being a disruptor a startup essentially right,
Speaker 2: and with this new awesome solution, you know, like an
Speaker 2: ADP might come knocking your door saying, hey, we want
Speaker 2: to acquire you when we want to bring you into
Speaker 2: our network or whatever it may be.
Speaker 1: Yeah, I mean, we have talked to a lot of
Speaker 1: these large payroll companies and there is not I wouldn't
Speaker 1: say it's not like monopoly, but ADP is the biggest
Speaker 1: payroll processor by far, and I think, you know, unless
Speaker 1: you're really nerdy focused on this space, they're really important
Speaker 1: for economic data, like the Bureau of Labor Statistics hasn't
Speaker 1: been in the news recently for a lot of political reasons,
Speaker 1: but ADP is an important indicator for like the broader
Speaker 1: economy around giving insights into private payroll data and employment trends.
Speaker 1: And that's just because they have such a massive reach.
Speaker 1: You know. There there's like they used to call them,
Speaker 1: I think, like the big four piece or the four
Speaker 1: piece something that paychecks, paycore whatever, like these guys take
Speaker 1: you know, the majority of the United States employees are
Speaker 1: getting paid through one of these softwares. We you know,
Speaker 1: are going back to kind of like what I was
Speaker 1: mentioning before, Like I am so excited about cryptotechnology and
Speaker 1: have been for so long, and I'm so concerned about
Speaker 1: it getting co opted by these like big brands that
Speaker 1: are using it to extract a value. Like the real
Speaker 1: innovation of this technology and why it's interesting is it
Speaker 1: because it can foster peer to peer transactions. And so
Speaker 1: that's that's our mission, you know, like we do not
Speaker 1: want to become another intermediary that extracts value along like
Speaker 1: the finance chain. But that being said, like we want
Speaker 1: to also kind of have a say in how this
Speaker 1: technology gets deployed. And so you know, all of these
Speaker 1: company are looking at how do youse stable coins and
Speaker 1: if we can have a say and how they can
Speaker 1: use it to be able to facilitate peer to peer,
Speaker 1: non custodial types of transactions, Like we definitely want to
Speaker 1: be as part of those conversations to try and manage
Speaker 1: those outcomes. So that's what I would say there. There
Speaker 1: is like a little bit of, to be honest, like
Speaker 1: a cultural difference where you know, you look at something
Speaker 1: like ADP and the software looks like something that was
Speaker 1: built in nineteen ninety nine and such. Working with such
Speaker 1: a legacy tech stack is really hard, but the distribution
Speaker 1: channels are very appealing. So you know, it's I think
Speaker 1: the thing that every entrepreneur thinks about, whether you know,
Speaker 1: how do you get your investors or returned, and like
Speaker 1: how do you think about the rest of your professional career. Certainly, yeah,
Speaker 1: those are the considerations I have.
Speaker 2: Yeah, that makes sense. And you know, I most recently
Speaker 2: interviewed the EVP of Digital Assets and blockchain and MasterCard,
Speaker 2: and they're exactly what you're saying. They're looking at, how
Speaker 2: can we leverage stable coins, USDC or whatever it may
Speaker 2: be to improve payments in certain corridors, And they're you know,
Speaker 2: you can see they're going through their R and D
Speaker 2: and trial and error. So it seems like at some point,
Speaker 2: whether it be ADP or whoever they're going to have
Speaker 2: this moment. Okay, we need to figure out what we're
Speaker 2: doing here or we're gonna get disrupted. We're gonna lose
Speaker 2: market share. Because with the Genius Act pass, we should
Speaker 2: see a whole bunch of new stable coins. Banks are
Speaker 2: talking about launching stable coins like Bank of America and
Speaker 2: much more, and we'll see which ones survive. But obviously
Speaker 2: Tether's king of the held USDC right behind. So it's
Speaker 2: just fascinating to see how this is all going to
Speaker 2: play out.
Speaker 1: Yeah, yeah, yeah, super interesting. And you know, I have
Speaker 1: a past history working in equities brokerage, and I loved
Speaker 1: your episode with lad from Robinhood like thinking about like
Speaker 1: how digital brokers can, like the equity stack is so
Speaker 1: full of legacy tech, and thinking of different ways to
Speaker 1: implement blockchains in those flows I think are really effective.
Speaker 1: I think that, like, yeah, it's tough. There's a lot
Speaker 1: of talk around tokenization of assets, which is very cool,
Speaker 1: but if these like the actual fundamental assets themselves are
Speaker 1: not living on a blockchain, a tokenized version of it
Speaker 1: is higher risk. You know, it's almost like a marketing
Speaker 1: asset in a lot of ways, and so, but it's
Speaker 1: a great thing to experiment with. Like if we think
Speaker 1: about the earlier days of crypto or at least the
Speaker 1: etherorem space in twenty sixteen, the Ico boom, like it
Speaker 1: was a massive experiment and like, I think the industry
Speaker 1: learned a lot from it. And I almost see the
Speaker 1: same thing happening in with banks, with equities brokers, with
Speaker 1: all these kinds of things. So we'll see, we'll see
Speaker 1: what the outcomes are and the lessons.
Speaker 2: Absolutely and hopefully, you know, with the upcoming Clarity Act,
Speaker 2: that legislation which covers more uh you know, obviously because
Speaker 2: it's the market structure build it covers DeFi and tokenization
Speaker 2: on a lot of different things. That helps to put
Speaker 2: some guardrail in place. And hopefully we don't see any
Speaker 2: major collapses or anything like that. But you know, what
Speaker 2: would that mean for your business we're having that pass
Speaker 2: into law.
Speaker 1: Yeah, I mean, it's a good question. The I think
Speaker 1: overall having these pieces of legislation is like a massive
Speaker 1: net positive for the industry. It's almost surreal to see
Speaker 1: it happening, you know, just having anybody who's worked in
Speaker 1: the industry for more than five years, like it's wild
Speaker 1: to see it being talked about like at the level
Speaker 1: of the White House, to see the like bipartisan legislation
Speaker 1: going through Congress. As a side note, I have a
Speaker 1: maybe hot take on US politics, which is like crypto
Speaker 1: is the thing that will make Congress work again where
Speaker 1: we have such a divided country, like the only thing
Speaker 1: that people can agree on is crypto and regulating crypto,
Speaker 1: and you know, maybe that's like build some goodwill to
Speaker 1: deal with other societal issues that Congress has to work on.
Speaker 1: Aside from that, we'll see. I think like the Market
Speaker 1: Structure Bill is important. I think one of the things
Speaker 1: that's like a fundamental issue with how the US regulates
Speaker 1: financial markets and capital markets is like it is very
Speaker 1: much like by enforcement, and this bill is not going
Speaker 1: to change that so much. And it's really like can
Speaker 1: we have like more effective kind of enforcement agencies that
Speaker 1: really go after the bad actors. It's almost like a
Speaker 1: little bit of a political problem like we think about,
Speaker 1: you know, in our recent history, like FTX was so
Speaker 1: involved in talking to regulators and we all know what
Speaker 1: happened there. So I'm not totally confident that this bill
Speaker 1: will like really change that, but I am hopeful that
Speaker 1: it will. It's hard, I think to look at crypto
Speaker 1: like only the crypto legislation without like some of the
Speaker 1: other pieces that need to fall in place, like across
Speaker 1: capital markets. So you know, I think about accreditation rules
Speaker 1: that the SEC has. I think some of those need
Speaker 1: to change as well, and that can lead to enhanced
Speaker 1: access and also better consumer protection. So there's a lot
Speaker 1: of stuff that I want to see.
Speaker 2: Yeah, yeah, well, it said hard question for you. It's
Speaker 2: ten years from now, it's twenty thirty five. Are stable
Speaker 2: coins running through the rails of the economy from a
Speaker 2: payment standpoint, whether it be payroll or me sending you
Speaker 2: some money via an app, or I'm sending my cousin
Speaker 2: some money overseas, or I go to Starbucks and I
Speaker 2: buy some coffee. Our stable coins running behind all these things.
Speaker 2: And initially, you know, I guess where I get my
Speaker 2: money via payroll. It's powering the payroll, my paychecks and
Speaker 2: things like that.
Speaker 1: Yeah, I think, unquestionably. Yes, We're working actually on a
Speaker 1: paper right now with some of our payments fintech friends
Speaker 1: about just the history of payments networks ACCH swift. We
Speaker 1: have in recent history our TP and FED now which
Speaker 1: have both emerged in the in the last couple of years,
Speaker 1: and stable coins have really come up alongside these technologies,
Speaker 1: and I think we'll probably usurp them entirely. I think
Speaker 1: the question is, like stable coins are going to be
Speaker 1: powering payments, no question. How will that look like? Will
Speaker 1: they be in these walled garden payments networks, like in
Speaker 1: a master Card payments network using a master Card stable
Speaker 1: coin where you know you're not really seeing it as
Speaker 1: a consumer, or like will you really have these more
Speaker 1: non custodial type of fun flows. We'll see, you know.
Speaker 1: I think like when we look at emerging economies that
Speaker 1: are like a digital base, so like areas of Africa,
Speaker 1: ors of South America, like they have had digital money,
Speaker 1: not crypto that is peer to peer for much longer
Speaker 1: than we have had in sort of like you know,
Speaker 1: the the US, Europe, things like that, Like I kind
Speaker 1: of think about that, like how did that emerge? How
Speaker 1: how will we see like our own version of like
Speaker 1: much more digital money kind of emerged. Yeah, we'll see,
Speaker 1: but I'll certainly be powered by stable coins. Like what
Speaker 1: flavor of stable coins? I'm not totally sure.
Speaker 2: Yeah, And I'm very curious as to what what that's
Speaker 2: going to look like. And to your point, which stable
Speaker 2: coins and is it a you know, multiple stable coins
Speaker 2: and they are all interoppable and multiple blockchains and vendors
Speaker 2: accept these multiple stable coins, and you know, is it
Speaker 2: more or less account based and more wallet based where
Speaker 2: we're all self custodying. I get my pay it's not
Speaker 2: on a weekly basis, maybe a daily basis, and then
Speaker 2: it's all in my same wallet and I could transact,
Speaker 2: you know, kind of all in one app thing, go
Speaker 2: make my purchases and my it's my bank account I
Speaker 2: earned yield, YadA, YadA.
Speaker 1: Yeah, yeah, yeah, I think it. Yeah, like will wallets
Speaker 1: like usurpent accounts is a great question, I hope, so
Speaker 1: you know, I hope so.
Speaker 2: Yeah, that'd be so fascinating. And then you know, I've often,
Speaker 2: well I shouldn't say often. I've recently had some folks
Speaker 2: who are in the robots industry, and you know, we
Speaker 2: were talking about robots are not going to transact in cash.
Speaker 2: It's gonna be digital currency and most likely stable coins,
Speaker 2: and to have a built their own built in wallet
Speaker 2: and maybe in ten years we'll have robots in our homes.
Speaker 2: Elon's building it. Other companies are building it, and I
Speaker 2: can say, hey, robot, whatever your name is, go to
Speaker 2: home depot and get me this, and it can go
Speaker 2: make the payment and it's done in stable coins.
Speaker 1: Yeah, I mean ten years from now, like if we
Speaker 1: just really zoom out, it's gonna be totally it's gonna
Speaker 1: be a crazy life, you know. I think that one
Speaker 1: thing that and stable coins are like a small piece
Speaker 1: of this broader sort of tech revolution that we're going
Speaker 1: through in general, where robotics is part of it. AI
Speaker 1: is obviously something that is in the news a lot,
Speaker 1: but crypto is really like perfectly suited for like agents
Speaker 1: AI agents to interact with, for automated technologies that are
Speaker 1: a little bit more advanced to be able to use.
Speaker 1: And I think, you know, sometimes listening to some tech podcasts,
Speaker 1: it's kind of like, yeah, you're just going to be
Speaker 1: managing a lot of agents who are actually doing a
Speaker 1: lot of the work though, like kind of grunt work.
Speaker 1: And so we think about it now that you do now,
Speaker 1: So I think that that will be definitely something. I
Speaker 1: would love to have a robot like clean my house
Speaker 1: for me and like go whatever, which you know, we
Speaker 1: have some early steps like I have a rumba, I
Speaker 1: have an automated mop thing like what they're getting there,
Speaker 1: like they get smarter? Like sure. I think something else
Speaker 1: that is worth thinking about too, is just like when
Speaker 1: we have instant money, like instantly settled money, Like how
Speaker 1: will that change business models? How will that change how
Speaker 1: we interact with our jobs, with our friends, like with
Speaker 1: our family. When you have things like Venmo and zell,
Speaker 1: like it seems instant, like it feels instant, but it
Speaker 1: actually creates a lot of float in the economy. With
Speaker 1: cash that's getting settled between financial institutions, it creates a
Speaker 1: lot of risk. There's a lot of chargeback risk, right
Speaker 1: that fintech companies have to or you know, normal financial
Speaker 1: institutions have to eat. But I think that there's just
Speaker 1: some level of like transacting will fundamentally be a different thing,
Speaker 1: and like the technology under the hood will be different,
Speaker 1: but it's like almost the social context around it will
Speaker 1: be totally different too.
Speaker 2: It's like exciting but scary to see in time, to
Speaker 2: see how all these things are going to come into fruition.
Speaker 1: Yeah, yeah, yeah, you know, it's interesting, like we offer
Speaker 1: much faster pay cycles and there are payroll companies that
Speaker 1: have things called like earned wage access programs that you
Speaker 1: can get part or all of your paycheck faster for
Speaker 1: a fee, Like we do this much differently where you
Speaker 1: can just get paid what you've earned, no additional fees.
Speaker 1: Things like that. But when we look at like that,
Speaker 1: the reporting infrastructure for it, the compliance infrastructure, like the
Speaker 1: IRS doesn't really have a way for us to report
Speaker 1: instant payments, you know, like they're like, well, there's a
Speaker 1: calculation if you do it daily, or a calculation if
Speaker 1: you do it weekly. Like there's a lot of this
Speaker 1: legacy crap that's going to have to catch up as well.
Speaker 2: That's a great point because the government is slow. They
Speaker 2: still have outdated processes and softwares and whatever it is.
Speaker 2: Do you think eventually they're plugging into these different blockchains
Speaker 2: and these different companies and kind of like an API
Speaker 2: set up, they're getting the feed and they have eventually
Speaker 2: a software that is Web three native that is like
Speaker 2: a chain analysis right, kind of like a data and
Speaker 2: analytics and it's aggregating everything, it's categorizing everything, and it's
Speaker 2: making it easier for them.
Speaker 1: Yeah, I think that there's that, Like I like the
Speaker 1: the tech infrastructure upgrades will be there. Something that I
Speaker 1: think is interesting is like you know, in the US specifically,
Speaker 1: like we're US based companies, so we're very US like
Speaker 1: you know, policy centric. The IRS knows how much money
Speaker 1: you make, like we're reporting how much money you make
Speaker 1: every two weeks or whatever, and we go through this
Speaker 1: weird song and dance where it's like, Okay, now I
Speaker 1: have to report my personal W two or ten ninety nine.
Speaker 1: The government already has this information. They know exactly how
Speaker 1: much you owe. You have to kind of take a
Speaker 1: guess at it, and then you know, it leads to
Speaker 1: this very like annoying kind of like tax season where
Speaker 1: you wait for refund or whatever, like things go on
Speaker 1: for years. A friend of mine just got a notice
Speaker 1: from the IRS that said he was over refunded in
Speaker 1: twenty twenty one, and now he owes them a couple
Speaker 1: thousand bucks, And it's just like this. You know, there
Speaker 1: is a big private industry that wants to keep this
Speaker 1: kind of chaos the same because they make money off
Speaker 1: of it. These like kinds of intermediaries, the biggest one
Speaker 1: is into it. You know, it's well documented how much
Speaker 1: money they spend lobbying Congress so that they can keep
Speaker 1: turbo tax, which is one of the most popular tax
Speaker 1: software is one of the richest sort of like software
Speaker 1: revenue generating things by far. Will these private industries like
Speaker 1: co op this technology to like maintain their positions, you know,
Speaker 1: or can we get the government to like want to
Speaker 1: upgrade themselves instead of relying on these kind of private sectors,
Speaker 1: you know, I would, I would love the latter. But
Speaker 1: it's it's not a question of like the tech being there,
Speaker 1: it's a question of like the willpower to implement it
Speaker 1: and to use it in a certain way. I think
Speaker 1: in a lot of these kinds of instances.
Speaker 2: Yeah, great point. And plus you throw in, like you said,
Speaker 2: the lobbying, the you know, the craziness of politics, and
Speaker 2: that could hit your progress and getting these new things
Speaker 2: in place. But hopefully we can, you know, and sooner
Speaker 2: than later.
Speaker 1: Yeah, I agree.
Speaker 2: Tell us a bit about what's on your roadmap.
Speaker 1: What can we expect, certainly, and there's some like base
Speaker 1: level of ecosystem expansion we have been EVM based. There
Speaker 1: are other kind of ecosystems outside of ethereum that are
Speaker 1: interesting that we see customer demand for Solana being one
Speaker 1: of them. So I think that there's some level of
Speaker 1: that that we're looking into. You know, a lot of
Speaker 1: payroll companies right now make money not because of running payroll,
Speaker 1: but because of the added benefits that they offer workers.
Speaker 1: So you know, your cost per unit for like an
Speaker 1: ADP customers like four to five dollars not very much.
Speaker 1: Your like profit on that is even lower, like probably
Speaker 1: fifty percent lowers. But you can make a lot more
Speaker 1: money by offering them healthcare and then you get a
Speaker 1: kickback from the insurance brokers or companies. You know. All
Speaker 1: that kind of stuff really bothers me. I don't I
Speaker 1: don't like it. And so one thing that we're trying
Speaker 1: to think about fundamentally is like how do we make
Speaker 1: companies running payroll? Like how do we move that from
Speaker 1: an expense area of their their P and L up
Speaker 1: to you know, an asset on their balance sheet? Like
Speaker 1: can you be making money off of running payroll? You
Speaker 1: have massive treaturies at companies that are just sitting making
Speaker 1: no money while they're going through an extremely long fun
Speaker 1: flow process to settle payroll payments. Like faster payments also
Speaker 1: means you have a lot more opportunity to be earning
Speaker 1: money off of that. And so that's something that like
Speaker 1: we're thinking about at the corporate level, like how do
Speaker 1: we help companies like actually make money instead of like
Speaker 1: you know, be paying these massive like opch op x expenses.
Speaker 1: And we have like a couple different theories about how
Speaker 1: to do that. We did just release a yield product
Speaker 1: where companies that have stable coins sitting in smart treasuries
Speaker 1: could be earning yield through different DeFi protocols. Yeah, it's
Speaker 1: really kind of like how do we sort of try
Speaker 1: and bring about a business model shift and you know,
Speaker 1: really stay true to this kind of value of not
Speaker 1: being like an extractor along the way. So so that's
Speaker 1: kind of where my mind is at.
Speaker 2: That's great. I really love the deep like DeFi component
Speaker 2: you mentioned. If the companies have whether we stable coins
Speaker 2: sitting there, they can put it to work and earn Yeah,
Speaker 2: that's really great.
Speaker 1: Yeah, and it's it's palatable for certain type of customer.
Speaker 1: Other types of customers like you know, don't have that
Speaker 1: kind of risk tolerance, which is completely understandable, and so
Speaker 1: what can we do for them too? And there are
Speaker 1: there are a lot more options now, so yeah, so
Speaker 1: that's that's all under development.
Speaker 2: Great stuff, all right, I got some wrap up questions
Speaker 2: here for you, Megan. First, if you could create your
Speaker 2: own metaverse, what would the theme be?
Speaker 1: It would probably be like garden themed. I'm really on
Speaker 1: a Martha Stewart kick. I just watched her documentary and
Speaker 1: Netflix and I just think that she was so ahead
Speaker 1: of her time in so many ways. So it would
Speaker 1: be like a Martha Stewart crypto native thing. Yeah. It
Speaker 1: kind of goes with the ethereum infinite garden idea as
Speaker 1: well instead of walled gardens. So there's there's a there's
Speaker 1: a cute theme there.
Speaker 2: I think awesome rapid fire questions.
Speaker 3: Favorite food Panier Tica Masala, favorite musician or Ben Dispatch,
Speaker 3: favorite movie Spy with Melissa McCarthy, Favorite book Ocean at
Speaker 3: the End of the Lane by Neil Gaiman.
Speaker 2: And when you're not working at Franklin, what are you
Speaker 2: doing for fun?
Speaker 1: I'm walking my dog around the Upper east.
Speaker 2: Side, Megan. Absolute pleasure. And I love what you and
Speaker 2: the folks of Franklin are doing and definitely a big
Speaker 2: part of the future of how we are going to
Speaker 2: get paid and much more. And I would love to
Speaker 2: have you back on in the future. Maybe you can
Speaker 2: do it in person since you know you're in New
Speaker 2: York and but yeah, you know, thank you.
Speaker 1: It would be awesome. Yeah, really appreciate it and having such
Speaker 1: a great conversation and like, let's get keep it going