Speaker 1: Well. A stable coin is a type of digital currency
that's basically designed to minimize price volatility in the traditional
stable coin. It's based on the popularity of the stable
coin of value, and it fluctuates considerably depending on the
level of popularity.
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Speaker 3: Ever, and welcome. You are listening to the Financial Survival Network.
I'm your host, Carrie Lutz. Well, it's July first, We're
halfway through the year. The crypto space is moving so
rapid you can't believe it. You ignore it at your
own peril. I was at the Bitcoin twenty twenty five
conference in Vegas, brought to you either by black Rock
or Blackstone, I can't remember which one, but it doesn't
really matter. There's huge, huge money behind this. It wasn't
in the convention center, it was in the Venetian and
the booths I saw ranged anywhere from one hundred thousand
to multiple seven figures. And a trend that we picked
up on is the stable coin. And right now with
us is Gerson Gibbs, executive at Bellot Capital and expert
in stable coins in crypto. Gerson, what's the deal here?
Retailers are going to start to take in stable coins,
They're going to issue their own how's this working.
Speaker 1: Our retailer is a thank you for having me carry
But retailers, to answer your questions, are definitely, in my opinion,
shifting towards stable coin. I believe that it's going to
assist them with dropping liabilities a little bit.
Speaker 3: All these associated fees.
Speaker 1: With quite a card transactions can be a big costly
for our retailers. And when we see all these things
occurring with the tarofts and possible advice increases, I think
that retailers are going to be looking for any areas
in their business that they can reduce any type of course,
and I think that stable coins are one of those
areas well.
Speaker 3: You know, many people out there believe that credit card
clearing houses and credit card issuers it's just a big
extractive grift to take money from small retailers because let's
face it. The government doesn't pay credit card fees. Large
retailers even they are I don't want to say exempt
from it, but their fees are drastically reduced. Right, So,
small retailer, the medium sized retailer is really bearing the
brunt of all this, aren't they.
Speaker 1: Absolutely. I think that that's the business model for a
lot of these credit card companies. For the target audience
are the smaller and mid size retailers. I think that
those are the companies that pay a bulk of the
fees and they're just looking to get away from that,
and I think this is an opportunity. There are many
different means of payment processing. You know, you got things
like PayPal. You have these digital apps on telephones that
you're utilizing the pay but those are those are still
tied to credit cards, and that's where the issue begins.
So I think these stable coins will definitely assist with that.
Speaker 3: All Right, So, you know, I guess you've got to
explain exactly what a stable coin is, how it works,
and how it cuts costs.
Speaker 1: Okay, Well, a stable coin is a type of digital
currency that's basically designed to minimize price volatility in the
traditional stable coin. It's based on the popularity of the
stable coin the value and it fluctuates considerably depending on
the level of popularity. A stable coin is a digital
currency that is typically pegged to a stable asset like
a US dollar or gold, typically dollar for dollar. And
the differences from a credit card company is the speed processing.
And because these things are pegged to a network, all
the transactions and fee costs are almost eliminated. Right Because
these are companies like a Discover or a Chase, they
don't have the overhead expenses, so they have to charge
these fees. With stable coins, there's no fees. Everything's on
a network on these digital exchanges, and that's how they
managed to determine what the value of the stable coin is.
So a stable coin is simply, simply put more of
a think of a gift card. If you were to
put money on our Starbucks gift card, but you can
use the Starbucks gift card anywhere in the world to
purchase any product.
Speaker 3: Interesting here, really interesting. So yeah, like, what does the
name stable coin mean exactly?
Speaker 1: Stability there's no volatility. So for example, if you were
to have ethereum bitcoin, the value is going to change.
We've seen as the market was changing or if Trump
is making an announcement, a bitcoin that was worth for
one thousand bucks all of a sudden is worth twenty
thousand bucks because of popularity. And there's no really rationale
as to the volatility outside of popularity, right, So if
there's negative press surrounding the bitcoins, that is a drop
in the price, and that is the difficulty in determining
the value. So what Senate has decided is to create
a digital currency that doesn't have as much volatility. And
that's why it's called stable coin because it's stable, right,
It's pegged to something that's a real asset, like a
dollar dollar to dollar, So it's not going to change
based on popularity. And that assists retailers, right, because the
retailers are, you know, utilizing stable coin, they want to
make sure that they could actually determine the value of
the stable coin when they use utilizing it for transactions.
And that's one of the issues that we've had with
regard to this digital currency space that it was based
on popularity opposed to a real asset.
Speaker 3: Gotcha, okay, And so when we look like bitcoin, how
does that differ from a stable coin?
Speaker 1: Well, a bitcoin is not backed by a hard asset
based on popularity. If individuals feel that the value of
bitcoin is more valuable, the value of it is going
to go up, and as more individuals invest into it,
you will see the value increasing. Unlike a stable coin,
it doesn't matter the popularity. You're putting up the money
or the collateral and that's giving you the value of
your stable coin and there will be no fluctuations. That's
the difference.
Speaker 3: So you could have a stable coin that could be
backed by bitcoin, couldn't.
Speaker 1: You correct, correct, And that would have some fluctuations if
you're utilizing your bitcoin to buy stable coin, And that's
where there's a little bit of gray area and on
which is trying to wrap their hands around it before
actually passing the bill by the House. Because the people
are utilizing bitcoin to stable coin, there's still that fluctuation.
Speaker 3: So there has to.
Speaker 1: Be laws surrounding those type of transactions.
Speaker 3: Okay, interesting, Interesting, So you are a regulator, you dealt
with the big banks. What do you think the barriers
are here regulation?
Speaker 1: One of the things about digital currency why it's attractive
to a lot of individuals is because of the privacy
features associated with it. All Right, So because of the
privacy features. For investors and individuals who don't want the
government having full transparency over their financials and investments, they
take the digital currency angle. In addition to that, they
don't want bank involvements in their financials as much as
it currently is, because if you're banking with a chase
is totally different than banking with but than having your
money in a digital currency. And one of the major
issues is how do you regulate these things? How do
you oversee it? How do you prevent fraud? And if
there's so much privacy, how does the government get an
opportunity to oversee. So that's where the real issue is
and who's going to be the regulator that oversees it.
Bitcoin again is not backed by any hard assets or
real assets, but stable coin is depending on an asset
that it's being backed by. For example, if we take
the dollar, the FED oversees the dollar, right, if we
take gold, the CFTC oversees gold. If the digital currency
is utilized as an investment product, because you have the
ability to invest in it also and turn it into
an investment vehicle, the SEC oversees that. So digital currency
has features of all the regulatory bodies. So the government
is trying to determine who's going to lead the regulation
over digital currencies, and that's one of the major issues
right now.
Speaker 3: Gotcha all right? So we're kind of in the wild
west here then, aren't we?
Speaker 1: Absolutely?
Speaker 3: All right? So when we have this conversation in five years,
what is the landscape going to look like? Here?
Speaker 1: Oh, I think it's going to be figured out way
before then. I think that with the new administration coming in,
that was one of the primary goals to bring digital
currency to the forefront. I think it improves international trade.
I think it reduces fees for retailers, mid to small retailers,
especially with regard to tariffs that are now changing the
cost of goods. I think that retailers are looking for
places to again reduce costs. I think it's gonna play
out with digital currencies in a sense that it's going
to assist with reducing some of these costs that credit
cards processings are bringing, so on and so forth. So
I believe in five years this will be the norm.
It will be the main use of financials and use
of money. It will be all digital, all.
Speaker 3: Right, And uh so, what impacts it's going to have
on the banks.
Speaker 1: Well, they're gonna have have banks change your models. That's
what I believe. I think traditional banking is never going
to go away, but I think it's going to be
an added feature to change your models, to restructure their
pricing models and their fee models. I think they're going
to figure out a way. But I think the traditional
approach of the the process of fees, the three percent
and of I think that model is going to change
and be reduced tremendously.
Speaker 3: All Right, So we're into a whole new realm of
finance here that JP Morgan, God rest his soul, never
ever thought about it.
Speaker 1: Absolutely absolutely. I'm sure this wasn't even a thought back
in the day. But now I think it's becoming a
norm and we see it all the time. We actually
have been in some kind of a digital space for
some time now, with companies like Hey Pal, you have
companies like chime On. You have these credit card companies
that are giving you the ability to not have the
physical credit card and have things on your phone. I think,
in some way, shape or form, we've been shifting to
digital currency. I went to the store a couple of
days ago, and I tried to pay cash, but I
didn't have any cash on me, you know, I just
use my credit cards that don't usually carry cash. So
I think that we've been transitioning into this space for
some time now. I think that now we're actually looking
at it's it's worldly impact and making it necessary changes
implemented into the United States as best as possible.
Speaker 3: That really is fascinating that we're seeing this transition curve
and we're living through it right yet.
Speaker 1: Yeah, Yeah, it's it's coming out of a coming out
of an era and into a new era. I believe
that again, this is going to be the main way
that we pay for our products in the United States,
to be a digital currency.
Speaker 3: Mm hmm. Interesting. Interesting, you know, it just it's the
economy is not what it used to be.
Speaker 1: Right, not at all, not at all, And I think
that the younger generation is definitely pushing towards it. I
think that disadministration is very involved in the digital space.
Trump has his own coin, his family is highly involved
in the space, and I believe again he believes that
it's going to open up international business and be lucrative
for smaller to mid sized businesses in the United States.
Speaker 3: Yeah, that's that's pretty amazing. And you know, Trump's moves
with with crypto have been very controversial. You know, you
get that emollience clause, emoulment's clause and all that stuff.
Got any thoughts about that, Well.
Speaker 1: I think that from some administration is extremely controversial because
of what I mentioned a little bit earlier. Bitcoin is
based on the popularity. The value of it is based
on popularity, and that's a huge issue. If you're the
president of the United States, you're one of the most
popular people in the world.
Speaker 3: So if you.
Speaker 1: Speak on you know, bitcoin or speak on digital currencies
in any manner, it could go in any direction. And
I think that Congress had a major issue with that.
Hence the creation of a stable coin, which doesn't necessarily
get impacted by you know, the president providing the world
with new information with relation to it. So I think that,
you know, the controversy surrounding that was, you know, how
do we control these popular politicians from providing the general
republic with information that's going to shift the value of
something that they own, right put in the political system
in a bit of jeopardy because they have no control
over the political figures. So I think it was a
big controversial. However, I think that it needed to be
done in order for a little bit of fire to
people be put under the government to ensure that it's
regulated correctly, and they're thinking about all of the features
associated with digital currency.
Speaker 3: All right, all right, well, that's interesting and obviously Trump
is the best thing that ever happened to crypto in
our lifetimes for now.
Speaker 1: For now, we'll see what the future beholds, But for now,
Trump definitely is one of the pioneers in the crypto
space and incorporating it into modern day financials.
Speaker 3: And who would think, you know, a guy that doesn't
even use a computer, right.
Speaker 1: Absolutely, it's always it's always the person that people wouldn't
never thought or assumed. And again I think that it
is just because the push that he's doing with tariffs
is definitely raising the prices on some of these smaller
and mid sized companies. But with the passing of the
digital stable coin, I think it could drop a lot
of process smps and balance out some of the costs
that have increased to do business in the United States.
Speaker 3: Right, all right, Well, this is a fascinating I appreciate
your coming on with us and helping to share your
knowledge with what's happening here. It's pretty amazing.
Speaker 1: Thank you so much for having me carry Carry. It's
been a pleasure.
Speaker 3: Likewise, I say, people want to find out more about you,
connect with you on the web. How do you do that? Gerson?
Speaker 1: Definitely on my website is www dot Bellett B E
L I T E Capital C A P I T
A l dot com. You can find me there all.
Speaker 3: Right, excellent. Appreciate you coming on and we'll look forward
to having you on again. If you've got a question
for Gerson myself, shoot me an email k L at
Carrie Lutz dot com and you'll find links to Gerson's
places on the web on Financial Survival Network dot com.
Just when you go there, we just asked that you
sign up for a free newsletter, Grayson. Been a pleasure.
Thanks for stopping by. Been a pleasure and enjoy to
ust of your day.
Speaker 2: Carry, Thanks for listening to carry Letz's Financial Survival Network,
your solution to today's trying times. For the latest, go
to Financial Survivalnetwork dot com. Financial Survival Network now more
than ever