Speaker 1: In many ways, Payanier is the original stable. We collect
Speaker 1: funds we give the customers that pay in your account
Speaker 1: balance and then plug it into the way that they
Speaker 1: do business across the world. I think the distributed nature
Speaker 1: of blockchain creates some new opportunities for some of those
Speaker 1: services to move totally digital, and that's awesome.
Speaker 2: It seems like enterprises com Latch are unstable quin. So
Speaker 2: can banks and other types of payment companies and financial institutions.
Speaker 2: Do you think there might be some consolidation over time.
Speaker 1: It's a really good question. I think it comes back
Speaker 1: to how you view the role of stable quins.
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Speaker 2: welcome into the Thinking Crypto Podcast. I'm your host Tony
Speaker 2: Edward and joining me today's Rob Morgan, who is the
Speaker 2: head of stable coin strategy at Pioneer. Rob. Great to
Speaker 2: have you, hey, Jony, Thanks for having me. Yeah, Rob,
Speaker 2: excited to talk about payments and stable coins and this
Speaker 2: brand new world that we are all immersed into. But
Speaker 2: I'd love to kick it off with your background. Tell
Speaker 2: us a bit about where you're from, where you grow
Speaker 2: up in your professional.
Speaker 1: Backer awesome happy too. So I am from Boston, Massachusetts,
Speaker 1: originally have grown up all over the country, spent some
Speaker 1: time in Salt Lake, currently based in Washington, d C.
Speaker 1: With my wife and dog, my yellow labrador Rocky.
Speaker 2: Very cool, and then I saw you spend some time
Speaker 2: at the ABA the American Bankers Association. Tell us about
Speaker 2: that experience in working with the banking sector. Yeah, so
Speaker 2: I have spent my career at the intersection of banking,
Speaker 2: technology and regulation. Most of my career is much more
Speaker 2: on the banking side than the crypto side, although I've
Speaker 2: found my job has always been to try to translate
Speaker 2: between the two and in many cases bring banks along
Speaker 2: with what's new and what's coming down the pipeline to
Speaker 2: help them innovate move faster. So I spent twelve years
Speaker 2: at the ABA, where I built and led our Office
Speaker 2: of Innovation. So that meant doing really three things. One
Speaker 2: was helping banks work with new stage startup to see
Speaker 2: what new technology was coming, how can we integrate that
Speaker 2: technology create partnerships. Two, we actually ran a corporate venture
Speaker 2: fund to make investments that in technology that we thought
Speaker 2: was beneficial for the banking industry as a whole. And
Speaker 2: then three was trying to push for regulatory clarity to
Speaker 2: help banks actually move forward in the space and open
Speaker 2: up the path for banks to do new and innovative things.
Speaker 2: Which is which is not always easy in a highly
Speaker 2: regulated environment. Absolutely, and so you know, talking about your
Speaker 2: role of looking at innovation and helping these banks to
Speaker 2: look at these different technologies and the emerging technologies and
Speaker 2: so forth, at what point was your encounter with crypto
Speaker 2: or blockchain tech? And at that point it maybe could
Speaker 2: tell us how did you come across it and what
Speaker 2: was your like your next steps after you had like,
Speaker 2: let's say your Aha moment to say, hey, banks, this
Speaker 2: is something you need to look at.
Speaker 1: Yeah, so I had come across, you know, being sort
Speaker 1: of the innovation person in the banking space, got all
Speaker 1: of the questions of like, hey, what is this bitcoin thing?
Speaker 1: From really early on, I would say the Aha moment
Speaker 1: was probably right around you'd call it twenty fourteen twenty fifteen.
Speaker 1: We were working really closely with groups of community banks
Speaker 1: to look at how they engage with their core systems.
Speaker 1: So for those banks, they all rely on one ledger
Speaker 1: that is usually an on premise server. It is run
Speaker 1: by typically one of three companies. I think you know,
Speaker 1: something like eighty five percent of the four thousand, seven
Speaker 1: hundred banks in the US run on one of these
Speaker 1: three systems. These systems typically and traditionally were closed well ecosystems.
Speaker 1: And we had this moment where a banker was telling
Speaker 1: us that he had asked for API access to some
Speaker 1: of his customer data and the response he got from
Speaker 1: the vendor was, what are you going to do with it?
Speaker 1: We need to know so we know how much to
Speaker 1: charge you for your own data. And that was sort
Speaker 1: of the aha moment of the banking system being built
Speaker 1: in these proprietary ledgers that even the bank themselves can't access.
Speaker 1: How powerful having that distributed ledger technology could be in
Speaker 1: creating something that is modern, that is extensible across the
Speaker 1: whole ecosystem, and that can facilitate open innovation in a way.
Speaker 1: This sort of traditional banking core model really could.
Speaker 2: Absolutely and rob you know, initially, I think a lot
Speaker 2: of banks seem to not want to embrace this technology.
Speaker 2: There was a bit of knee jerk reaction, well, well
Speaker 2: we don't like this, and you know it's used for
Speaker 2: money laundering and so forth. But now we now in
Speaker 2: twenty twenty five and even you know, most of last year,
Speaker 2: a lot of these banks are integrating blockchain, building their
Speaker 2: own private permission chain connecting to public chains launching stable coins, custody,
Speaker 2: you name it, tokenization and much more. What's it like
Speaker 2: to see, you know, the banking sector embracing this technology,
Speaker 2: So it's really exciting.
Speaker 1: Right after ABA, I spent two years three years working
Speaker 1: with a group of mid sized regional community banks on
Speaker 1: tokenized departments, So a period of time where the banking
Speaker 1: regulators were not particularly inclined to lean into this technology.
Speaker 1: And so I think there has always been a group
Speaker 1: of banks that have been forward leaning, that have been
Speaker 1: thoughtful about the role that this technology can play in
Speaker 1: helping them build a better future for financial services. So
Speaker 1: no surprise that the industry has by and large come around.
Speaker 1: My focus throughout the years has always been how can
Speaker 1: we help banks embrace this new tech use it to
Speaker 1: build sort of a more open and better future together.
Speaker 1: I do think you always with any field, you see
Speaker 1: concern around what does this mean for my existing business?
Speaker 1: And the players that you see push back and try
Speaker 1: to push competition out often aren't the ones that survive
Speaker 1: in the long run. I will say in the banking space,
Speaker 1: there are a number of bank CEOs I've talked to
Speaker 1: throughout the years, even since that sort of twenty fourteen
Speaker 1: moment who have said, look, how do we use this
Speaker 1: to create the bank of the future, as opposed to
Speaker 1: how do we push it out? So my view is
Speaker 1: that lens has always been there, even if there was
Speaker 1: a point where this felt new and scary and we
Speaker 1: saw pushback from the industry. I think it's only natural
Speaker 1: that as we get regulatory clarity that will allow banks
Speaker 1: to move forward alongside some of the non banks in
Speaker 1: the space, you're going to see the banks lean in
Speaker 1: and really try to embrace their ability to use this
Speaker 1: technology to better serve their customer.
Speaker 2: Pardon the interruption. Hi, I'm Tony. I'm the host of
Speaker 2: the Thinking Crypto podcast. I wanted to ask you if
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Speaker 1: Rob.
Speaker 2: There's a trend that we're seeing that there's less brick
Speaker 2: and mortar locations for banks because the majority of people
Speaker 2: are going digital right, they can do a lot of
Speaker 2: their banking on their mobile phone or their desktop, and
Speaker 2: stable coins and come along. You know, how do you
Speaker 2: see banking This is a hard question fifteen twenty years
Speaker 2: from now. Is it a continued trend of less brick
Speaker 2: and mortar. Yes, there's still going to be some, but
Speaker 2: there's more decentralized finance. The banks are facilitating this, and
Speaker 2: there's more global lending and credit markets and things along
Speaker 2: those lines that's accessible to the everyday person.
Speaker 1: Yeah. So it's a good question, right, there are some
Speaker 1: things we probably know about the future of banking. If
Speaker 1: we look at the banking system in the US, we've
Speaker 1: seen a ton of consolidation over the years and we
Speaker 1: see that continuing. But really, you know, we have I
Speaker 1: think it's four thy seven hundred banks, maybe fewer now
Speaker 1: I haven't checked the statistic in the recent quarters. But
Speaker 1: one of the strengths of the US banking system is
Speaker 1: its diversity. You look at other countries and they have
Speaker 1: maybe three banks. And so it's really easy when we say,
Speaker 1: you know, banks in the US, to think of monoliths
Speaker 1: sort of the large banks that may be more of
Speaker 1: us engage with or that own a large chunk of
Speaker 1: the market. But the reality is, with the diversity of banks,
Speaker 1: you have community banks that are embedded into those communities.
Speaker 1: While some of those services will move digital, I view
Speaker 1: stable coin, blockchain and crypto generally as something that can
Speaker 1: empower them to better serve their communities. So those institutions
Speaker 1: add real value. Right if there is a farmer down
Speaker 1: the street that needs a loan, they may have the
Speaker 1: ability to know in this community this credit looks this
Speaker 1: way and to make a loan that no one else
Speaker 1: in the world could because they're there, they have that
Speaker 1: relationship and they're based in that community. That is incredibly powerful.
Speaker 1: I think it's a benefit that our system has as
Speaker 1: we digitize. I think there's an opportunity to leverage what
Speaker 1: makes those banks great, supercharge it by lowering their costs,
Speaker 1: given them more flexible infrastructure so that they can go
Speaker 1: deliver financial services faster, more efficiently to the communities that
Speaker 1: they serve. So in my mind, similar to I think
Speaker 1: we always think of Excel has always been part of banking,
Speaker 1: but there was a period in time where all the
Speaker 1: accountants were very nervous that Excel was going to put
Speaker 1: them out of business. The reality is that's just not true. Right.
Speaker 1: What we've seen through wave after wave of technology is
Speaker 1: that it's often an empower that lets us get back
Speaker 1: to the important relationship based pieces of the business. I
Speaker 1: think the distributed nature of blockchain creates some new opportunities
Speaker 1: for some of those services to move totally digital, and
Speaker 1: that's awesome. There's new markets there. There are also opportunities
Speaker 1: for sort of the high touched local model that I
Speaker 1: think will help banks be more competitive, not less as
Speaker 1: we move forward.
Speaker 2: Yeah, well said not to mention AI, where you can
Speaker 2: have both blockchain and AI help to enhance those services
Speaker 2: as you mentioned, and better serve the consumer and open
Speaker 2: up new options. So it's like a brave new world.
Speaker 2: But there's a huge opportunity here to kind of build
Speaker 2: on the legacy and make it better.
Speaker 1: Couldn't agree more.
Speaker 2: So, Rob tell us about Pioneer. What is Pioneer, What
Speaker 2: are the services you provide and how are you using
Speaker 2: blockchain and crypto and stable coins and things along those lines.
Speaker 1: So Payoneer is a global financial services company that helps
Speaker 1: connect SMBs to the global economy. So what we see
Speaker 1: is that increasingly SMBs operate globally, but that financial systems don't,
Speaker 1: and so we help bridge our SMB customers ambition to
Speaker 1: serve a global market to really a fully connected financial
Speaker 1: services experience that allows them to operate seamlessly across the world,
Speaker 1: where their money follows them the same way their business does.
Speaker 1: So Payoneer works with SMB customers, helps them reach new markets,
Speaker 1: collect payment in those markets, manage their funds globally, and
Speaker 1: pay out both their employees, their vendors, and all of
Speaker 1: their other costs in the markets where they operate. So
Speaker 1: in many ways, Payoneer is the original stable coin, right.
Speaker 1: We collect funds, we give the customers that pay in
Speaker 1: your account balance, and then plug it into the way
Speaker 1: that they do business across the world. We are sort
Speaker 1: of deeply and carefully watching the stable coin space as
Speaker 1: our customers begin adopting stable coin, as we see the
Speaker 1: transition of stable coin from those cryptonative use cases into real,
Speaker 1: real world use cases. We want Pioneer to be able
Speaker 1: to help our customers engage with this new form of
Speaker 1: payments the same way that we do every other currency
Speaker 1: every other market that are our customers engage in. So
Speaker 1: we're watching the market carefully, keep an eye in the
Speaker 1: space I think we'll have more coming in the coming
Speaker 1: weeks and months here.
Speaker 2: Got it. So it sounds like you're in the building
Speaker 2: phase of setting up the infrastructure to support these SMBs,
Speaker 2: and in addition to those businesses being able to accept
Speaker 2: stable coins and transacting them and so forth, I'm assuming
Speaker 2: you will also look at integrating them on the back
Speaker 2: end of your system to move money faster.
Speaker 1: Yeah, So we'll share any specific updates when we get them.
Speaker 1: What I would say more generally is if you think
Speaker 1: about the role that pay in your play is in
Speaker 1: the ecosystem today, we simplify what is a very complex
Speaker 1: world of cross border payments. So how I can collect
Speaker 1: money in country A, manage that globally pay it out
Speaker 1: in country B. There's often five or six different steps.
Speaker 1: There are often three or four bank accounts in different
Speaker 1: countries that are all connected. We abstract all of that
Speaker 1: complexity in the FIAT ecosystem today. Our view is that
Speaker 1: stable coin is a really powerful tool to speed up
Speaker 1: to add transparency to global commerce. But for many of
Speaker 1: these businesses it doesn't actually simplify right the need for
Speaker 1: on ramping stable coin into a wallet, for managing a
Speaker 1: wallet and keys for being able to send receive into
Speaker 1: that wallet, creating interoperability with other currencies, other markets, and
Speaker 1: then ultimately off ramping. There's a lot that needs to
Speaker 1: be done, and so our view is that Pioneer's role
Speaker 1: is to help our customers operate their business without having
Speaker 1: to think about where and how the money is moving.
Speaker 1: We think there's an opportunity for us to simplify that
Speaker 1: complexity in stable coin the same way we do in
Speaker 1: FIAT today.
Speaker 2: And we're seeing stable coins being adopted at a rapid pace.
Speaker 2: The market cap has grown significantly. I'm you know, waiting
Speaker 2: to see, if you know, over in the next couple
Speaker 2: of years we hit a one trillion dollar market cap,
Speaker 2: you know. For example, one major adoption news was YouTube
Speaker 2: integrating the PayPal p y usc stable coin. What are
Speaker 2: your thoughts on that? And you know, can we expect
Speaker 2: maybe other big retailers and platforms like your amazons and
Speaker 2: so forth to integrate stable coins.
Speaker 1: Yeah, so I think the key for stable coin for us,
Speaker 1: that type of adoption is what gets me really excited.
Speaker 1: Right at the end of the day, you only create
Speaker 1: value in payments when you help people sell products, hire employees,
Speaker 1: or invest for the future. Right, when you're moving real
Speaker 1: world goods and services and products. If you can do
Speaker 1: that more efficiently, then you're creating real value, right, You're
Speaker 1: creating jobs, you're helping people sort of reach towards that
Speaker 1: vision of the future. That's where it becomes really exciting.
Speaker 1: And so as we see real world integrations where stable
Speaker 1: coin is not being used because it's cool and new,
Speaker 1: but where it's actually solving someone's business problem today, that's
Speaker 1: where we get excited and that's where we think we
Speaker 1: can help our customers. So I think there are sort
Speaker 1: of two main developments that are pushing that adoption and
Speaker 1: the use of real world of stable coin to solve
Speaker 1: real world financial services problems. The first is the passage
Speaker 1: of the Genius Act in the US, the additional regulatory
Speaker 1: clarity and the certainty around a framework for regulated money
Speaker 1: in the stable coin and blockchain space. That's a huge
Speaker 1: advancement as someone who spent a big chunk of the
Speaker 1: last few years trying to be able to adopt this
Speaker 1: technology for banks to solve their problems. Without that regulatory clarity,
Speaker 1: it becomes really hard and it becomes really hard to
Speaker 1: interoperate with the other systems that those businesses use every day.
Speaker 1: The second is sort of market clarity that follows that
Speaker 1: increased adoption and the ability to have your customers or
Speaker 1: your suppliers operating in the same medium, The ability to
Speaker 1: have that sort of embedded nature. I think YouTube is
Speaker 1: a really interesting one. The ability to embed those payments
Speaker 1: in a way that existing rails can't. Right, it's not
Speaker 1: just that this is faster or cheaper, but it's a
Speaker 1: totally new rail that can actually help operate at a
Speaker 1: code level, the way your business operates. And so, in
Speaker 1: my mind, these payments innovations stable cooin incredibly innovative, but
Speaker 1: it becomes most useful when it actually does something that
Speaker 1: other rails can not, just does it a little faster
Speaker 1: or a little cheaper.
Speaker 2: What are your take on there being maybe too much
Speaker 2: saturation in the stable coin market. It may be too
Speaker 2: early to answer this question, but it seems like enterprises
Speaker 2: collacture unstable coin, So can banks and other types of
Speaker 2: payment companies and financial institutions. Do you think there might
Speaker 2: be some consolidation over time? Yeah, so it's a really
Speaker 2: good question. I think it comes back to how you
Speaker 2: view the role of stable coins.
Speaker 1: Right. If we've view stable coin as a payment rail,
Speaker 1: we probably don't need five two hundred different payment rails,
Speaker 1: and so I suspect when we're using stable coin as
Speaker 1: a payment rail, we will see continued consolidation into a
Speaker 1: handful of chains and a handful of tokens that will
Speaker 1: facilitate most of the money movement. What we also see
Speaker 1: is that stable coins used as a store of value
Speaker 1: in a lot of cases, and in that case, as
Speaker 1: we look at money globally, we do see a lot
Speaker 1: of those options today. We already have digital dollars in
Speaker 1: the form of bank deposits. They might all be denominated
Speaker 1: in USD but a dollar at JP Morgan is not
Speaker 1: the same as a dollar at City and we have
Speaker 1: multiple form factors for that money today. I don't think
Speaker 1: stable coin changes that. So I think we will continue
Speaker 1: to see a proliferation of different stable coins that are
Speaker 1: use case specific, that are maybe held in different ecosystems.
Speaker 1: But I also think we'll see groups coalesce around major chains,
Speaker 1: major tokens for types of transaction.
Speaker 2: And with the growing adoption of stable coins, you know,
Speaker 2: mostly of the dominant stable coins that right now are
Speaker 2: the US dollar ones right and the US dollars the
Speaker 2: well reserve currency. But as the ecosystem grows and we
Speaker 2: head into this token economy, if you want to call
Speaker 2: it that, all running on blockchain rails. Do you see
Speaker 2: digital euros and you know whatever else country will besides
Speaker 2: to launch your own stable coins, And it's kind of
Speaker 2: working like the FX market. Everybody has their own digital
Speaker 2: version of their fiat currency and there's interoperability or an
Speaker 2: upgrade version of the FX market.
Speaker 1: Yeah. So what I will say is, I think the
Speaker 1: US in particular has been on the front foot here
Speaker 1: and the legislation that we've talked a little bit and
Speaker 1: will probably continue to do so about the Genius Act.
Speaker 1: I think the Genius Act created clarity that will enhance
Speaker 1: the dollar's role as the global reserve currency. By having
Speaker 1: this regulatory framework that the rest of the world will fallow,
Speaker 1: I think that will supercharge USD stable coin use as
Speaker 1: a global tool to make commerce easier. So I'm optimistic
Speaker 1: that I think USD stable coins will continue to play
Speaker 1: a really key role. Now the question becomes how do
Speaker 1: those then interact with the rest of the world where payments, prices, etc.
Speaker 1: Aren't done in USD. I think what we start to
Speaker 1: see is a world where there are multiple tokens in
Speaker 1: those jurisdictions. One of the big challenges we see today
Speaker 1: for businesses that operate globally is the ability to offer him.
Speaker 1: So if I am a business in Vietnam that is
Speaker 1: paid in stable coin, I might have USDC in my wallet,
Speaker 1: but my costs are Vietnamese dong in my local economy,
Speaker 1: and so a real challenge in the adoption and use
Speaker 1: of stable coin globally is, as a business that wants
Speaker 1: to get paid in this new form factor, how do
Speaker 1: I actually take it and operate my business the way
Speaker 1: I do today? So importantly like today, their best option
Speaker 1: is to go to an exchange in Vietnam, hope that
Speaker 1: there are enough buyers of USDC for Vietnamese dong to
Speaker 1: complete the transaction, and then wait for those funds to
Speaker 1: settle in a local bank. Then finally they can use
Speaker 1: that to pay their employees to go buy materials. I
Speaker 1: think what we see is a few options right. In
Speaker 1: some cases there will be better infrastructure for those businesses
Speaker 1: to accept USDC and convert them to Vietnamese dong, where
Speaker 1: I think we will start to see more proliferation of
Speaker 1: new denominations for currency is as off ramping tokens, So
Speaker 1: I think we'll see increased use of say Vietnamese dong
Speaker 1: token that exists in that ecosystem that helps facilitate the
Speaker 1: move from USDC into that local economy and facilitates that
Speaker 1: sort of off ramping into the various jurisdiction where those
Speaker 1: businesses open.
Speaker 2: Yeah, that absolutely makes sense. And I'm assuming you folks
Speaker 2: at Pioneer, you know, thinking about your strategy and assisting
Speaker 2: with all those things.
Speaker 1: Right, So, as we look at Payoneer's business, I think
Speaker 1: a lot of the work that we do in the
Speaker 1: FIAT space today answers a lot of complexity that exists
Speaker 1: in the stable coin space. And what I will say is,
Speaker 1: I think there are a few strengths that we have
Speaker 1: that position us to help answer a lot of the
Speaker 1: complexities for global businesses that want to operate in stable coins.
Speaker 1: So the first is that last mile question. How do
Speaker 1: you deliver fiat last mile for a business paid in
Speaker 1: stable coin? Today? Payoneer helps global businesses that collect money abroad,
Speaker 1: manage it and pay out in one hundred and ninety
Speaker 1: markets around the world. So we have incredible call last
Speaker 1: mile reach to be able to deliver fiat. I think
Speaker 1: that's one really important piece. Two is the customer relationships
Speaker 1: that we've built, the partnership that we have with our
Speaker 1: SMB customers. We have huge reach into that market that
Speaker 1: is just starting to see adoption in the stable coin space.
Speaker 1: As we've seen in stable cooin broadly, distribution is in
Speaker 1: many cases what determines winners in this market. We have
Speaker 1: distribution into key corridors where there is product market fit
Speaker 1: stable coin. The third is compliance. We have built a
Speaker 1: global compliance infrastructure that allows us to onboard customers around
Speaker 1: the world in a way that is consistent with the
Speaker 1: expectations from US banking regulators, so that those companies can
Speaker 1: access the banking system and importantly, the nexus that exists
Speaker 1: in the US today, so as I think genius raises
Speaker 1: the bar for everyone, we have the ability to help
Speaker 1: bring those customers into this ecosystem in a way that
Speaker 1: is consistent with regulatory expectations. And I think the last
Speaker 1: and most important is the simplicity. As we see the
Speaker 1: adoption of stable coin. Our business today is simplifying payments
Speaker 1: around the world, making it for our customers so it
Speaker 1: just works whether payment is in JPY, Euro, usd We
Speaker 1: think that there's the ability to further simplify this. I
Speaker 1: doubt that in the future there are businesses that will
Speaker 1: purely exist in FIAT or really exist and stable coin.
Speaker 1: The question is going to be how can you simplify
Speaker 1: across both and allow businesses to engage seamlessly around the world.
Speaker 1: So we think Pioneers really well positioned to answer what
Speaker 1: I think are those sort of four key questions for
Speaker 1: adoption of stable coin for cross border commerce.
Speaker 2: Absolutely. I read recently that Pioneer has partnered with City
Speaker 2: Bank to implement blockchain enabled treasury transfers through City Token Services.
Speaker 2: But can you tell us, Daron, how you've been working together. Yeah,
Speaker 2: so we're really excited about the partnership. We are leveraging
Speaker 2: City Token Services to help us move funds around the
Speaker 2: world to make those last mile deliveries more efficient. So
Speaker 2: the partnership lets us serve our customers more reliably. We
Speaker 2: use their blockchain enabled treasury transfers to get faster transaction, speed, automation, transparency.
Speaker 2: The blockchain sort of reduces the cash management FX risk,
Speaker 2: all of those pieces that we have to consider it
Speaker 2: and adds efficiency on the back end that we can
Speaker 2: then pass along to our customers. Are you able to
Speaker 2: disclose if you're working with different banks or cities like
Speaker 2: your primary partner in doing these so Panier works with
Speaker 2: the network of banks around the world. City is one
Speaker 2: of those banks that.
Speaker 1: We work with. But as you can imagine, you know,
Speaker 1: delivering funds into Japan, there's a bank will work within
Speaker 1: that market there to deliver those months. So we have
Speaker 1: you know, I think that's one of the benefits pay
Speaker 1: in your has is a robust global banking network that
Speaker 1: allows us to serve customers in those one hundred and
Speaker 1: ninety countries.
Speaker 2: Rob you brought up the Genius Act earlier, right, and
Speaker 2: the implications of that and how important it was to
Speaker 2: have those clear rules and the guard wills in place,
Speaker 2: and certainly it's the benefit of the US dollar and
Speaker 2: much more. However, the American Bankers Association and you know,
Speaker 2: the banking lobby and so forth have had some issues
Speaker 2: with some of the things that are included in at
Speaker 2: Genius Act, such as stable coin yield and rewards. You know,
Speaker 2: giving your background, the ABA will love to get your
Speaker 2: thoughts about what happened here and kind of the re litigation.
Speaker 2: You know what the banks not really paying attention to that,
Speaker 2: and do to have valid concerns possibly like a lot
Speaker 2: of funds leading to banks and going into stable coin
Speaker 2: platforms where people can earn yield.
Speaker 1: Yeah, so it's a good question, right, And whenever there
Speaker 1: is new regulation that sets up sort of a new
Speaker 1: structure for money movement, everyone wants to weigh in, and
Speaker 1: there's always a you know, there's a dance that happens
Speaker 1: to make sure that we're both allowing new products to
Speaker 1: market fast enough and creating a regulatory structure that facilitates innovation,
Speaker 1: that facilitates new thinking, balanced against the need to maintain
Speaker 1: consumer and customer protection, that the way these things are
Speaker 1: rolled out or done responsibly, that there isn't sort of
Speaker 1: a gap in oversight that would otherwise exist. So there's
Speaker 1: always a debate around this. I've spent a good chunk
Speaker 1: of the last few years testifying before Congress and others
Speaker 1: trying to help think about how we create a responsible
Speaker 1: regulatory structure for this new form of money. There will
Speaker 1: be I think, hotspots throughout that debate, and it will
Speaker 1: be ongoing. But I think most importantly what we see
Speaker 1: is really continued progress and continued buy in on ensuring
Speaker 1: this new path exists for banks and non banks to
Speaker 1: leverage this technology in a safe, responsible and regulated environment.
Speaker 1: I think we've seen both the clarity that comes from
Speaker 1: that regulation create more enthusiasm in the market. We've also
Speaker 1: been really encouraged by the move's bank regulators have made
Speaker 1: to move quickly on implementing that. I think that path
Speaker 1: creates additional clarity. I will say what we saw during
Speaker 1: my time at USDF was a lack of clarity around
Speaker 1: how both banks and non banks could leverage stable coins right.
Speaker 1: The lack of regulatory structure meant that when you went
Speaker 1: to a banking regulator as a bank, you were told well,
Speaker 1: ask again in about six months or we're thinking about
Speaker 1: your response. And as a bank, when you're told effectively
Speaker 1: noet veto through through a non answer right, you don't
Speaker 1: feel like you can participate now. So I think in
Speaker 1: some ways there's a concern that from the banking industry,
Speaker 1: if we can't adopt this technology, others will and we'll
Speaker 1: be left behind. In my mind, the right answer is
Speaker 1: to enable everyone to adopt this new technology and compete.
Speaker 1: We certainly need to make sure the right guardrails are
Speaker 1: there to make sure this is well regulated, well protected.
Speaker 1: But let's create a regulatory structure that facilitates responsible innovation,
Speaker 1: allows those into market, and creates a level playing field.
Speaker 2: Yeah, well said, And well, I guess we'll see how
Speaker 2: this all pins out with the crypto market structure and
Speaker 2: what compromise and things are reached. I know there was
Speaker 2: a delay in the markup last week, but you know,
Speaker 2: talks are still happening, the dialogues that we are going forward.
Speaker 2: But I guess we'll have to wait and see what
Speaker 2: the type of resolution they come to. Yeah, we're all
Speaker 2: waiting and watching here for sure. Rob. You know, you
Speaker 2: have a lot of experience and the payments sector and
Speaker 2: the history of payments and so forth, so I'm curious
Speaker 2: what your outlook is for the future of payments and
Speaker 2: how stable coins and crypto might be integrated into the sector.
Speaker 2: So let's say it's twenty thirty five, am I going
Speaker 2: to Starbucks paying for a coffee? Not necessarily I'm choosing
Speaker 2: to use a stable coin, but stable coins may be
Speaker 2: powering the movement of the money behind the scenes where
Speaker 2: my credit card or whatever app I'm using. Is it
Speaker 2: something like that?
Speaker 1: And beyond Yeah, It's a great example, and I think
Speaker 1: you already hit on what my answer will be is,
Speaker 1: as a customer, you probably don't even know. Right, we
Speaker 1: win in innovation and in payments when the customer doesn't
Speaker 1: even think about their money. Right, No one wakes up
Speaker 1: in the morning and gets out of that excited to
Speaker 1: go to their bank. Right. The bank exists so that
Speaker 1: the customer can go execute on their ambition. Right, if
Speaker 1: it is a small business, they wake up thinking about
Speaker 1: how can I sell my customer's product that adds value
Speaker 1: to their lives, not how do I manage financial services
Speaker 1: on the back end. And so in my mind, in
Speaker 1: ten years, stable coin has the opportunity to help simplify
Speaker 1: some of that complexity. There's a lot of work we
Speaker 1: all need to do to make that the case, but
Speaker 1: I think it's a few things. Right. Money disappears into
Speaker 1: the background. My business just continues to operate. Money is
Speaker 1: the operating system that a lot of that business has
Speaker 1: to work on. So you know, if I go to Starbucks,
Speaker 1: I probably don't pick stable Coin. I may not even
Speaker 1: think about it. I may have just told my AI
Speaker 1: assistant that I'm going to be at Starbucks in two minutes,
Speaker 1: and it may handle the transaction on the back end.
Speaker 1: And so I think the more that we can integrate
Speaker 1: payments into the flows that businesses and consumers use every day,
Speaker 1: the more that we can abstract that complexity, take that
Speaker 1: away and create a system that just works. That's where
Speaker 1: we went. That's where we create real value when businesses
Speaker 1: don't spend time on payments but spend time talking to
Speaker 1: their customers building better products. That's how we when I think,
Speaker 1: that's where the ecosystem really delivers on its promise in
Speaker 1: the next five, ten and fifteen years. And do you
Speaker 1: think with the instant settlement aspect and stable coins running
Speaker 1: in the rails of the payments networks and so forth,
Speaker 1: that people would get paid daily? Now, you know we'll
Speaker 1: have to upgrade legislation and infrastructure and so forth, But
Speaker 1: that because you have instant money, people can get paid
Speaker 1: on a daily basis. Why not even by the minute? Right?
Speaker 1: I think there's all sorts of models when you lower
Speaker 1: some of the facilitate smaller and smaller transactions, or you
Speaker 1: enable a lot of new different sort of payment methods,
Speaker 1: et cetera. So I won't get out, I won't get
Speaker 1: into the legal structure of how payments or how salaries
Speaker 1: are paid. Right, I have no special view on that,
Speaker 1: But what gets me excited are things like the ability
Speaker 1: for micro transactions to help better unlock value as it's
Speaker 1: being created. So you know, if I have a website,
Speaker 1: maybe I can get paid per visitor, per click, whatever,
Speaker 1: and it's not one payment at the end of the month,
Speaker 1: but the minute that I generate some value that someone
Speaker 1: used my content, that someone consumes one of my services,
Speaker 1: even if it's just one minute of browsing a page,
Speaker 1: you can create a fraction of ascent of a transaction
Speaker 1: that goes along with that in real time and gives
Speaker 1: someone access to the payments that to their earnings in
Speaker 1: real time. Maybe it's an Uber driver who gets paid
Speaker 1: by the minute and sort of sees those those funds
Speaker 1: add up in real time in their account. Right. I
Speaker 1: think there's a lot we can do. Most importantly, I
Speaker 1: think a big piece of the future of global commerce
Speaker 1: R the SMB of the future is probably AI based,
Speaker 1: or at least has a heavy AI component, And so
Speaker 1: having a system like stable coin that at a code
Speaker 1: level can work with these new technologies, with the new
Speaker 1: bit with the businesses of the future, help facilitate moving
Speaker 1: value along the same way that we're seeing an evolution
Speaker 1: in the way that those buses misses operate. And I
Speaker 1: think stable coin has the opportunity to make sure that
Speaker 1: payments keep pace well.
Speaker 2: Rob as a content creator publishing content, I would love
Speaker 2: to have the micro transactions and updated web monestization where
Speaker 2: it's like you're to your point, get that instant payment
Speaker 2: or you know, same day, I don't have to wait
Speaker 2: weeks or months to get a payout. Absolutely, let's talk
Speaker 2: about tokenization. The tokenization market is heating up. We are
Speaker 2: seeing a lot of assets going on chain, from goal
Speaker 2: to stocks and other equities, money market funds and things
Speaker 2: along those lines. I would love to get your take
Speaker 2: on that market. And is payoneer looking to integrate tokenize
Speaker 2: assets in any.
Speaker 1: Way, Yeah, so happy to give just a general view
Speaker 1: of the market at say, you know, from payoneer's perspective,
Speaker 1: it's still very early and we're watching the space carefully.
Speaker 1: For me, if we go back to the core value
Speaker 1: that tokenization brands, right, it's the idea that we have
Speaker 1: a shared ledger for a shared in public ledger that
Speaker 1: simplifies the various complex systems that exist today, and so
Speaker 1: we spent a lot of time on this in my
Speaker 1: days at USDF working on tokenized deposits. I think blockchain
Speaker 1: is too often used as the silver bullet that solves
Speaker 1: all of the world's problems. But where it really I
Speaker 1: think does add unique value is when you have multiple
Speaker 1: parties collaborating in real time. I think of it as
Speaker 1: that that shared Google doc instead of the Excel spreadsheet
Speaker 1: that sits on your computer and then you send someone
Speaker 1: else and you all have to work separate, right. The
Speaker 1: beauty of blockchain is that we're all working together in
Speaker 1: real time. And so as we think about tokenization of
Speaker 1: non payments activities we think about tokenized assets areas where
Speaker 1: you need that kind of collaboration in real time is
Speaker 1: where I think tokenization adds the most value. So if
Speaker 1: it is just you know, buying and selling product X
Speaker 1: that could connect to any other payment system today, sure
Speaker 1: you might have some incremental value there. Where I get
Speaker 1: excited are when we see new assets that require that
Speaker 1: type of real time collaboration. So one example I'll give
Speaker 1: that we looked at USDF were loan participations. So you
Speaker 1: might have an example where a community bank wants to
Speaker 1: make a loan to one of the companies that they
Speaker 1: work with, but can't right the loan is too big
Speaker 1: for this community bank, and so they want to bring
Speaker 1: other banks in to make that loan. In the past,
Speaker 1: that would mean the first bank would have to keep
Speaker 1: its own Excel spreadsheet, collect a payment from a borrow,
Speaker 1: or send it to those other banks. By tokenizing that loan,
Speaker 1: you now have the ability to route payments to the
Speaker 1: various holders of that loan. That's where I think you
Speaker 1: can unlock real opportunity. You can create lower funding costs
Speaker 1: for those loans, help create better access to credit just
Speaker 1: by making it easier for those banks to collaborate in
Speaker 1: real time on the same system of record and to
Speaker 1: have the payments followed. So I think there's a ton
Speaker 1: of opportunity. I'd say I'm most excited about areas where
Speaker 1: you need that kind of real time collaboration. That's where
Speaker 1: it adds the most value in my mind.
Speaker 2: Yeah, for sure, I know there's a lot of excitement
Speaker 2: about token is A, but not everything needs to be tokenized,
Speaker 2: And to your point, it needs to be markets, it
Speaker 2: needs to be demand liquidity, and it has to make
Speaker 2: sense you have, you know, the network effects of different participants.
Speaker 2: I know, as a public company, it's not much you
Speaker 2: can share them till it's you know, the information's out there.
Speaker 2: But what can you highlight as far as your roldmap
Speaker 2: as it relates to blockchain, stable coins, crypto and things
Speaker 2: like that.
Speaker 1: Yeah. So look, I think we've talked about as much
Speaker 1: as we probably can there, which is we think that
Speaker 1: you know, as we look at the future payments, our
Speaker 1: business is simplifying the complexity of cross border trade. As
Speaker 1: our customers increasingly use this technology, we want to simplify
Speaker 1: that as well. We think we're well positioned to help
Speaker 1: be that operating system for businesses today and tomorrow to
Speaker 1: make sure money just works for that, whether it's in
Speaker 1: fiat payments or stable Yeah.
Speaker 2: Absolutely, Rob. I got some wrap up questions here for you. First,
Speaker 2: if you could create your own metaverse, what would the
Speaker 2: theme be? Well, that's a good question.
Speaker 1: If I could create my own metaverse, I'm clearly too
Speaker 1: focused on SMB payments, but I think and create a
Speaker 1: metaverse that helps global businesses connect, share ideas, and help
Speaker 1: better serve their customers.
Speaker 2: And rapid fire questions favorite.
Speaker 1: Food, Favorite food? Got to be pizza, favorite musician or band,
Speaker 1: very into Fred again these days? Favorite movie, favorite movie,
Speaker 1: ask an extreme, favorite book, Red Rising? And when you're
Speaker 1: not working, what are you doing for fun? Yeah? Avid cyclists.
Speaker 1: So it's not the weather today, a little too chilly
Speaker 1: out there, but once it warms up, I'll be out
Speaker 1: biking as much as I can.
Speaker 2: Good stuff, Rob, Thank you so much. Appreciate your perspectives
Speaker 2: and insights on payments, and I would love to have
Speaker 2: you back on Maybe round two we can do in
Speaker 2: person in New York.
Speaker 1: Would love that, Tony, thanks so much for having me,
Speaker 1: great conversation, Really looking forward to the next one.
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