Speaker 1: Hey, folks, we are recording at stable Coin Summit NYC,
Speaker 1: co hosted by PayPal and Borderless Xyz. And joining me
Speaker 1: is Kevin Latinity, who is the CEO of Borderless Xyz.
Speaker 2: Kevin, great to see you. It's always good to see you, Tony.
Speaker 1: Kevin. Excited chat with you because there's so much happening
Speaker 1: in the stable coin market and building, and you guys
Speaker 1: are leading on many fronts. But let's kick it off
Speaker 1: with this summit. Tell us about the collaboration.
Speaker 3: So this is the fourth event now that we've put
Speaker 3: together in a series where our core products, as you
Speaker 3: know from some of our previous discussions, is all about connectivity.
Speaker 2: Right.
Speaker 3: We created the first stable coin payments network in January
Speaker 3: of last year, and then Circle jumped in in July,
Speaker 3: Fireblocks jumped in after that CPN and the Fireblocks network
Speaker 3: for payments. And it's always been obvious to us that
Speaker 3: connectivity shouldn't be just a product, it should be the
Speaker 3: core of Borderless's DNA and our culture. So what better
Speaker 3: way to support a product of connectivity than by connecting
Speaker 3: people in real life. And we've hosted this now in
Speaker 3: San Francisco and con in Las Vegas, from Money twenty
Speaker 3: twenty and this is now the first time in New
Speaker 3: York where we try to bring together the best in
Speaker 3: the stable coin world for our quarterly client partner, you know,
Speaker 3: kind of ecosystem events. And we're incredibly fortunate that the
Speaker 3: folks at PayPal are jumping in with us this time
Speaker 3: around and are supporting kind of the stable coin world.
Speaker 1: Oh absolutely, And I'm looking forward to the panels and
Speaker 1: the talks that are happening here today where there's lots
Speaker 1: of different folks in different walks and different markets, you know,
Speaker 1: who are going to be talking about how stable coin
Speaker 1: stable coins.
Speaker 2: It's because we are being.
Speaker 1: Used across the globe to facilitate payments and much more.
Speaker 1: And it seems like the saying stable coins are the
Speaker 1: killer app a blockchain is becoming true and truer. You're
Speaker 1: just seeing incredible adoption.
Speaker 2: It's true and truer.
Speaker 3: So I, you know, was maybe slightly an early adopter
Speaker 3: in the sense that I've been working on table coins
Speaker 3: for a decade now, come twenty twenty six, and it's
Speaker 3: a really long time to say stable coin adoptions coming
Speaker 3: next year, But I feel like we're finally starting to
Speaker 3: see that and you know, even just in the past
Speaker 3: six months really since the passing of the Genius Act,
Speaker 3: We're seeing Zell announce a stable coin, the largest peer
Speaker 3: to peer money movement really in the US. We're seeing
Speaker 3: Western Union announce a stable coins, right, which is kind
Speaker 3: of like one of the largest, you know, international money
Speaker 3: movers in the world. We're seeing Swift announce a blockchain
Speaker 3: initiative at their conference. All this stuff is starting to happen,
Speaker 3: and we're only six months in, not six years in,
Speaker 3: so it's hard to tell how much of it will
Speaker 3: stick or things of that nature. But I think we
Speaker 3: can definitively say that the market is growing. Real traditional
Speaker 3: payments companies are entering the space. PayPal has always kind
Speaker 3: of been a bit of a leader here with the
Speaker 3: PYUSD issue in some of those things, but there's definitely
Speaker 3: now concrete examples that we can point to and say,
Speaker 3: really large enterprise, global money movement companies are doing things
Speaker 3: with stable coins, and that's amazing. That hasn't been true
Speaker 3: the past nine years.
Speaker 1: Yeah, it's amazing. The race is on, Kevin, The race
Speaker 1: is very much on. And you know, you mentioned Western Union.
Speaker 1: They were like, hey, we're gonna lauch stable coin in
Speaker 1: Stillana and much more. It's pretty amazing. It's kind of surreal.
Speaker 1: You kind of have to pinch yourself because you know,
Speaker 1: just a few years back, you couldn't imagine that we
Speaker 1: were in such a different environment, Crypto being attacked and.
Speaker 2: Much more Operation Chow point two point zero. Like even
Speaker 2: US as a company.
Speaker 3: We're coming up on our second birthday, which is still
Speaker 3: very very young for US, and we were six months
Speaker 3: in and we were wondering, depending on how kind of
Speaker 3: political events go, do we move to London, do we
Speaker 3: geofence the US and start to focus on a payments
Speaker 3: network that doesn't touch anything to do with the US
Speaker 3: and is more focused on like Europe to Africa and
Speaker 3: Asia and sort of those corridors. And then we've gotten
Speaker 3: the regulatory environment that we have now, and obviously we've
Speaker 3: you know, coalesced around New York and the US market
Speaker 3: is very much open, and you're seeing Stripe going on acquisitions,
Speaker 3: freeze of of not just Bridge but also Privy or
Speaker 3: saying fireblocks acquiring.
Speaker 2: You're seeing kind of.
Speaker 3: Innovation is very much alive in the US and the
Speaker 3: stable coin world.
Speaker 1: Kevin, last time we spoke you highlighted the benchmark product
Speaker 1: that the folks at border is built. Are there any
Speaker 1: updates there?
Speaker 2: You know, what are you seeing? So far?
Speaker 3: We've been super proud of that product, and really that
Speaker 3: was driven by a lot of customer need that we
Speaker 3: were seeing in traditional PSPs and kind of enterprise FinTechs
Speaker 3: that were saying, hey, borderless, is it true that stable
Speaker 3: coins are better, faster, cheaper. And obviously in the traditional
Speaker 3: FIAT world you have Bloomberg mid Market, you have XC
Speaker 3: dot com, you have kind of all these incredibly neutral
Speaker 3: places where you can see what an indicative FX rate
Speaker 3: looks like between FIAC currencies. You don't have that in
Speaker 3: stable coins before the borderless benchmark. Right, you can go
Speaker 3: to bitso and you can see their order book. You
Speaker 3: could go to open fx and see their order book.
Speaker 3: You can go to yellow Card and see their order book.
Speaker 3: But is yellow cards pricing for ZAR and USDT represent
Speaker 3: of the entire industries pricing?
Speaker 2: Maybe? Maybe not?
Speaker 3: And we realize, wait a minute, because we have built
Speaker 3: this entire payments network, now we can start to create
Speaker 3: all this value on top of that payment's network. And
Speaker 3: really the way that we think about our flywheel is
Speaker 3: that you have data these transactions the payments network. The
Speaker 3: transactions create more data, The data creates more insights. Insights
Speaker 3: drive better transactions, which create more data, which create more insights,
Speaker 3: which drive more transactions.
Speaker 2: Et cetera, et cetera.
Speaker 3: And what we said is, Okay, we're connected to over
Speaker 3: one hundred and fifty pricing feeds and we see all
Speaker 3: this transaction activity, and we see all the execution prices
Speaker 3: that are happening across the network. What if we aggregate that,
Speaker 3: anonymize it, and create the world's biggest data set of
Speaker 3: stable coin to Fiat actual FX prices around the world.
Speaker 3: And we've visualized that in this benchmark. But this core
Speaker 3: data set now is about to cross a million data
Speaker 3: points of actual Fiat FX execution prices, rates, transactions, etc.
Speaker 3: And we are powering some very exciting research that is
Speaker 3: coming out about stable coin FX rates from some of
Speaker 3: the biggest brands in the world.
Speaker 1: That's incredible. Congrats on that. And I remember when you
Speaker 1: were telling me about the tool. I'm like, this absolutely
Speaker 1: makes sense. You know, it's you have all this adoption,
Speaker 1: you have all the usage. Where's the data? How can
Speaker 1: we what can we extrapolate from the data and learn
Speaker 1: and our learnings and then that can inform business decisions
Speaker 1: and market decisions and much more. So. That's really great. Now,
Speaker 1: you're working with a plethora of different companies and brands.
Speaker 1: Can you give an example, and I know you probably
Speaker 1: can't share too many details, but an example of a
Speaker 1: company you're working with that is using stable coins and
Speaker 1: they're doing something really cool.
Speaker 3: Yeah.
Speaker 2: Look, I love nothing more than highlighting our customers.
Speaker 3: And we've been spending quite a bit of time working
Speaker 3: with a company called Bastion. Bastionian has an absolutely phenomenal
Speaker 3: team and they've put together a great product around stable
Speaker 3: coin issuance. We're helping them with the Borderless network on
Speaker 3: global on and off ramps for their issuance, and together
Speaker 3: we're going to be powering Sony and Sony Banks products
Speaker 3: around the stable coin space, which is you know, a
Speaker 3: global fortune five hundred of epic proportions, and you know,
Speaker 3: the Bastion team's really been crushing it and we're just
Speaker 3: excited to get to be a part of that journey
Speaker 3: and to be part of kind of bringing one of
Speaker 3: the world's largest electronics companies into the stable coin world.
Speaker 3: And it's really interesting to me, they're so big they
Speaker 3: own their own bank.
Speaker 2: That's incredible, right, wow, And it's.
Speaker 3: Really telling to me that they're bringing this product to
Speaker 3: market through the bank subsidiary. I think that gives you
Speaker 3: a lot of insight about where this roadmap is going
Speaker 3: and about the level of investment and the level of
Speaker 3: conviction that they have about stable coins to say, no, no,
Speaker 3: this isn't going to be some like fringe thing that's
Speaker 3: brought into the market by like PlayStation as like credits
Speaker 3: or something like that. It's the actual bank entity that's
Speaker 3: going to be bringing this product live.
Speaker 2: And that's that's incredible.
Speaker 1: I'm assuming they're going to use the stable coin infrastructure
Speaker 1: for both internal payments and mostly for sure external payments, right.
Speaker 3: Without going into the things that that you know, we
Speaker 3: really shouldn't be going into. The roadmap is really exciting.
Speaker 3: The roadmap is really broad. There's going to be a
Speaker 3: lot more coming about kind of how Sony is going
Speaker 3: to be using stable coins.
Speaker 2: I'm gonna let the Bastion team tell that story.
Speaker 3: This is really, you know, their win, and we're we're
Speaker 3: excited to be supporting them on it. But this is
Speaker 3: from from where we sit and all the activity that
Speaker 3: we see happening twenty twenty six is going to be unreal, man,
Speaker 3: it really will be.
Speaker 1: It's exciting as far as your roadmap, what can you
Speaker 1: tease or hint or give to us, you know, because
Speaker 1: you guys are always innovating and working on cool things.
Speaker 2: We are, you know.
Speaker 3: I was thinking about what opening remarks I want to
Speaker 3: give at the summit this afternoon, and one of the
Speaker 3: things I was thinking about is I got into stable
Speaker 3: coins helping launch True USD, which was the first USD
Speaker 3: based us you know, fully reserved stable coin, and then
Speaker 3: Circle quickly followed. And now, you know, I've done a
Speaker 3: lot of other firsts in the past decade, but most
Speaker 3: recently it's been launching Borderless, which is the first stable
Speaker 3: coin payments network in the world. And then six months
Speaker 3: later Circle followed with CPN. So I don't know if
Speaker 3: Jeremy taps my phone or something, but like maybe I
Speaker 3: got to double check into that. But a lot of
Speaker 3: the way that we're now thinking about it is is
Speaker 3: connectivity as the foundation and as certainly the core of
Speaker 3: the product set. But now that we're getting all this data,
Speaker 3: these transactions can feed insights. What are the sorts of
Speaker 3: guidance and what are the sorts of kind of advice
Speaker 3: and different value that we can build on top of
Speaker 3: this network where when customers think about borderless, it's no
Speaker 3: longer about oh, if I connect to three or four
Speaker 3: provid through borderless instead of connecting to them directly.
Speaker 2: What features do I lose through borderless?
Speaker 3: Now it flips and it says, wait a minute, if
Speaker 3: I don't connect through borderless, what borderless features do I
Speaker 3: lose by going directly to these underlying liquidity providers? And
Speaker 3: that's what our twenty twenty six roadmap is all focused about.
Speaker 3: The benchmark is a starting point things around back office automation,
Speaker 3: compliance automation, How do you handle RFI as at scale?
Speaker 3: What different sorts of agentic workflows can you put into
Speaker 3: those things? I'll tease the word agentic, maybe we'll leave
Speaker 3: it there. There's a lot of really exciting stuff that
Speaker 3: we're excited to bring to market, and we're wildly confident
Speaker 3: that we are years ahead of where other people are thinking,
Speaker 3: and it's going to be really fun to see the reactions.
Speaker 1: I'm excited to see those rollouts and I get a
Speaker 1: promise that you're going to come on and talk about it.
Speaker 3: For those that don't know, our offices are like three
Speaker 3: blocks from each other. Yeah, so I promise you that
Speaker 3: I will come wander down anytime.
Speaker 1: You'll have me awesome. Final question herefore, I let you gogus.
Speaker 1: I know you got to go take care of things.
Speaker 1: What do you think about these banks fighting stable couin
Speaker 1: yield and ongoing back and forth with legislation.
Speaker 2: I think banks have two issues.
Speaker 3: One is, historically they've been terrible sharers of yield.
Speaker 2: Right.
Speaker 3: That's kind of the opportunity that neobanks took early on.
Speaker 3: Why would you sign.
Speaker 2: Up for a revolute or a chime or something like that.
Speaker 3: It was the allure of high yield savings accounts, right.
Speaker 3: That was the initial value proposition where FinTechs came in
Speaker 3: and took a big chunk out of banks. The second
Speaker 3: thing to keep in mind is that with Genius Act,
Speaker 3: stable coins have to be fully reserved. But bank's business
Speaker 3: is fractional reserves. Bank's business is lending. So stable coins
Speaker 3: are kind of inherently under genius incompatible with the business
Speaker 3: model of banks. And that's where obviously their spearheading tokenized
Speaker 3: deposits right and they're saying, we want to stay on
Speaker 3: a fractional reserve basis. If stable coins can pay yields,
Speaker 3: they become super attractive. If they can't pay yields, they're
Speaker 3: far less attractive to everybody, which gives them a better
Speaker 3: chance of pushing tokenized deposits. Where I think this ultimately
Speaker 3: ends up is you have a lot of different types
Speaker 3: of banks as well, where you have like consumer focus banks,
Speaker 3: you have commercial banks, you have central banks, et cetera,
Speaker 3: et cetera. I think we're going to have different types
Speaker 3: of products at those different levels, and I think commercial
Speaker 3: banks we should think of as tokenized deposits, and I
Speaker 3: think that's how they're going to interact with each other,
Speaker 3: and that's going to be how they settle.
Speaker 2: That's the world they're going to live in.
Speaker 3: And then when we get into more consumer centric banks
Speaker 3: and we get into moving money in and out of
Speaker 3: the system versus around the system, that's where stable coins
Speaker 3: will live. So tokenized deposits will form the inside of
Speaker 3: the system, and then stable coins will then form the
Speaker 3: perimeter of that system for making it interoperable with the
Speaker 3: rest of the world and the rest the blockchain ecosystem.
Speaker 1: Sure I'm hoping they find some sort of compromise because
Speaker 1: I know they're holding up the market structure bill as
Speaker 1: a result. Yes, unfortunately, Yeah, but I think we will
Speaker 1: figure it out. And you know, like you were mentioning earlier,
Speaker 1: a lot of banks are working on their own stable coins.
Speaker 1: They are, and I'm hoping they can.
Speaker 3: Look.
Speaker 1: I think I believe in the free market, and I
Speaker 1: would love if my bank that I currently use offers
Speaker 1: a great stable coin you'll return.
Speaker 2: That would be awesome, exactly, or stable coin based remittance.
Speaker 1: Right.
Speaker 3: We've seen Cross River do some full announcements there at
Speaker 3: the end of last year where they said, Hey, as
Speaker 3: a bank, we're going to support USDC as a rail
Speaker 3: you don't need to go to a middleman anymore. You
Speaker 3: don't know you need to go to an intermediary on
Speaker 3: and off ramp. The bank is the on and off ramp,
Speaker 3: and that's incredibly exciting. I think that's what we're going
Speaker 3: to see three four, five years from now, is you're
Speaker 3: going to have banks directly participating in the stable coin ecosystem.
Speaker 2: Wow.
Speaker 1: Amazing to hear banks mentioning or working with stable coins
Speaker 1: and crypto and so forth.
Speaker 2: It's a brand new day. It's amazing. It is a
Speaker 2: brand new day.
Speaker 1: Yeah, Kevin, I know you got to go, but thank
Speaker 1: you so much for taking the time. And we're going
Speaker 1: to talk again this year, so but.
Speaker 2: Thank you so much. Thanks for having me, Tony.
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