Speaker 1: And then of course you learn about the technology and
Speaker 1: we do that. That was my aha moment. That's when
Speaker 1: I was, oh, wow, this is good to change everything.
Speaker 1: We didn't do an ico. We sold to private, accredited
Speaker 1: investors at a time when nobody else was doing that.
Speaker 1: We never had a public sale. For example, of our
Speaker 1: app token, which collateralizes the network.
Speaker 2: People call it meme coins. Right, So you could take
Speaker 2: something from culture that is maybe weird or funny, but
Speaker 2: the masses are human psychology gravitates to it, and some
Speaker 2: of it may not be for you or me. Right,
Speaker 2: some of it is just Internet culture. But there's things
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Speaker 2: go to vchain dot org. Link will be in the description. Hey, folks,
Speaker 2: welcome into the Thinking Crypto Podcast. I'm your host, Tony
Speaker 2: Edward and joining me today is Danny McKay, who is
Speaker 2: the co founder and CEO of Flexa. Now. Flexa is
Speaker 2: a digital assets payments platform. Danny, great to have.
Speaker 1: You, Thank you. Great to be here.
Speaker 2: Yeah, Danny, I'm excited to talk about crypto payments and
Speaker 2: learn about all the great things Flexa is doing. Well,
Speaker 2: let's kick it off with your background. Tell us a
Speaker 2: bit about yourself, where you're from, your professional background, and
Speaker 2: how'd you end up founding Flexa.
Speaker 1: Yeah, that's a great question. Background specifically, I'm an attorney. So,
Speaker 1: as some folks already know, I took a weird path
Speaker 1: to get into crypto. But yeah, I was a litigation attorney,
Speaker 1: a business litigation attorney. You worked with a lot of startups,
Speaker 1: worked in the technology sector quite a bit, and that
Speaker 1: led me to crypto. So professionally speaking, I was a
Speaker 1: lawyer for many years. This is my fourth Flex is
Speaker 1: my fourth startup. So I've dabbled in a few things
Speaker 1: here and there, but by far Flex is the focuslex
Speaker 1: Flex is the big one, so to speak.
Speaker 2: So where along the journey or like let's say timeline,
Speaker 2: did you find a crypto or blockchain and what was
Speaker 2: your aha moment?
Speaker 1: That's a great question too do so for me it
Speaker 1: was honestly boring. So if you're a trial lawyer, one
Speaker 1: of the things you have to do is it damages evaluation.
Speaker 1: So if you get a case set, you need to
Speaker 1: evaluate damages. Otherwise what's the point of a case if
Speaker 1: there are no damages. So I got a case I
Speaker 1: want to say, twenty sixteen as a litigation attorne and
Speaker 1: crypto was involved in specifically, it was a narrow ether
Speaker 1: and bitcoin were involved, and I had to do damages
Speaker 1: analysis for you know what possible damages might be. And
Speaker 1: in doing that analysis, I kind of went down the
Speaker 1: rabbit hole finding out about these different assets and more
Speaker 1: importantly the volatility and the appreciation and everything else that
Speaker 1: went along with crypto. And then of course you learn
Speaker 1: about the technology. And when you do that, that was
Speaker 1: my Aha moment. That's when I was, oh, wow, this
Speaker 1: is going to change everything, and sure enough it has.
Speaker 2: Yeah, an incredible I mean, obviously you went and started
Speaker 2: a business, So tell us about the genesis of flexa
Speaker 2: of how did the idea come about on what's the mission?
Speaker 1: The real idea came about with a combination of two things.
Speaker 1: One would be Payments where payments focused company. Obviously, you
Speaker 1: know we're here to help merchants primarily, you know, helping
Speaker 1: merchants thrive in the next era of commerce. So for us,
Speaker 1: this is a merchant centric play all the way. And
Speaker 1: that really came from one of my co founders, Trevor Filter,
Speaker 1: who was in payments his whole professional career. Then the
Speaker 1: other co founder, Tyler Spaulding, brought with him a real
Speaker 1: deep understanding of blockchain technology. So together they had this
Speaker 1: idea of how they can really replace debit and credit rails. Thankfully,
Speaker 1: they wanted an attorney as a co founder to help
Speaker 1: them build from the beginning. We wanted to build flex
Speaker 1: in the most compliant way possible. I knew that they
Speaker 1: wouldn't invest an attorney to be a co founder if
Speaker 1: they didn't want that to be the case. That gave
Speaker 1: me a lot of trust and faith in them. By
Speaker 1: the way, at an early time, this is eight years
Speaker 1: ago now, it seems crazy. So yeah, so I eagerly
Speaker 1: took this opportunity, and knowing what I knew at the
Speaker 1: time about crypto, and knowing what I thought could happen,
Speaker 1: how the transformative this technology could be, particularly with payments,
Speaker 1: I was I was eager to join. That was That's
Speaker 1: how I got into it. And you know, obviously still here,
Speaker 1: still paving the way you.
Speaker 2: Mentioned those eight years ago. That took a lifetime in crypto,
Speaker 2: right with all the things we've seen, some massive collapses FTX.
Speaker 2: Now we're in a very different environment, much more crypto
Speaker 2: friendly environment. What's it like looking back, you know, going
Speaker 2: through that arduous journey, you know, through all the ups
Speaker 2: and downs.
Speaker 1: Yeah, I'm really proud of our history. We could have
Speaker 1: done things differently and we wouldn't be here anymore. We
Speaker 1: didn't do an ICO. For example, we sold to private
Speaker 1: accredited investors at a time when nobody else was doing that.
Speaker 1: We never had a public sale, for example, of our
Speaker 1: AMP token which collateralizes the network. Probably talk about that
Speaker 1: a little bit later. So we did a lot of
Speaker 1: things right in the beginning. We built a compliance program first,
Speaker 1: a BSAAML program before we built anything else. We became
Speaker 1: fins End registered as a money services business immediately. I
Speaker 1: started pursuing money transmitter licenses immediately, so now we have
Speaker 1: licenses throughout the nation. We did a lot of things
Speaker 1: in the compliance and legal front from the outset in
Speaker 1: the beginning to make it through these eight years, because
Speaker 1: there have been quite a bit of challenges, not just
Speaker 1: with the FTX type stuff that drives the market down
Speaker 1: and weekends consumer confidence, but even what we saw with
Speaker 1: the SEC for example, in some of the hurdles they
Speaker 1: put folks through, including FLEXA was named in a complaint
Speaker 1: not as a defendant, but just referenced in a complaint
Speaker 1: with allegations about our token which were patently untrue. So
Speaker 1: we had to deal with all that. We still have
Speaker 1: to deal with all that in certain arenas. So for me,
Speaker 1: we built it right in the beginning and those challenges
Speaker 1: made us stronger. And we look at those challenges as
Speaker 1: helping us find the next opportunity, helping us find the
Speaker 1: next reason to build and what to build. So you know,
Speaker 1: no complaints will continue to just push forward.
Speaker 2: So let's go through the details of how a merchant
Speaker 2: or a business can use flex up to accept crypto
Speaker 2: or you know, spend crypto if they want with stable
Speaker 2: coins and things like that.
Speaker 1: Yeah, I mean for us it's optionality, right, for merchants,
Speaker 1: it's primary optionality. There's a lot of competitors now. People
Speaker 1: are especially because the Genius Act, which obviously came out
Speaker 1: in July, so it's still kind of brand new. But
Speaker 1: what we've seen since Genius is stable coin strategy, stable
Speaker 1: coin adoption kind of flood the market. Everyone's trying to
Speaker 1: get in in some way with stable coin payments, and
Speaker 1: that's wonderful. I don't think anybody would have guessed, for example,
Speaker 1: in July, when Genius becomes law, that the market cap
Speaker 1: for stable coins would be where it is today. I
Speaker 1: think upwards of about three hundred billion or something like that.
Speaker 1: We have thirty billion of on chain activity on a
Speaker 1: daily basis. I don't think anybody would have thought this
Speaker 1: would happen this quickly with stable coins. But for us,
Speaker 1: it's not just stable coin payments. It's not just one
Speaker 1: token or two tokens. It's not just one chain or
Speaker 1: two chains. It has to be everything. It has to
Speaker 1: be any asset for the merchants, from any chain for
Speaker 1: the merchants. It has to be that way, any wallet,
Speaker 1: any asset, and really anywhere, which we're excited to look
Speaker 1: forward to some announcements coming up next year on that.
Speaker 1: But for us, it's optionality. And I see a lot
Speaker 1: of our competitors. They may offer one or two or
Speaker 1: three tokens, they may offer one chain, They may require
Speaker 1: their merchants to have their own crypto wallets. And if
Speaker 1: you're doing that, how are you helping the merchant. Merches
Speaker 1: don't want to hold crypto yet, they don't want to
Speaker 1: manage and hold in custody crypto yet. So we make
Speaker 1: it possible so they can accept FIAT and we can
Speaker 1: do that with our payment page product or payment link
Speaker 1: payment clips. We do that with our SDK that any
Speaker 1: wallet can embed, such that any Walt literally can use
Speaker 1: our payment platform in order to make payments with merchants.
Speaker 1: So folks can use their walts to make payments with merchants. Honestly,
Speaker 1: it's optionality for the merchants, and we do it in
Speaker 1: a number of different ways, none of which costs the
Speaker 1: merchants anything. Obviously, we do the full integration ourselves. And
Speaker 1: of course consumers don't pay for our service, they just
Speaker 1: use the digital assets to make payments at many fortune
Speaker 1: five hundred merchants and growing.
Speaker 2: That's incredible. And is your service available in the international
Speaker 2: markets or just the United States?
Speaker 1: Great question. So right now it's the United States, El Salvador.
Speaker 1: We're legally authorized and we will look forward to some
Speaker 1: things happening in Canada. We're also super closed in a
Speaker 1: number of other international jurisdictions. So you know, I used
Speaker 1: to just say any asset, any wallet. I've been throwing
Speaker 1: it anywhere on there because for the last year and
Speaker 1: a half or so I've really been working hard with
Speaker 1: my team on global expansion and again with flex. So
Speaker 1: this goes back to what I said at the outset.
Speaker 1: We did compliance first, right, we had the BSAML program first.
Speaker 1: We do complete KYC ofax screening for folks that use
Speaker 1: our network. We're very careful because you know, we want
Speaker 1: to talk to regulators and make them feel comfortable, and
Speaker 1: more importantly, we want to talk to merchants and let
Speaker 1: them know we've got their back. We're protecting them from
Speaker 1: day one, so they don't have to worry about a thing.
Speaker 1: We take care of compliance. And I've taken that approach
Speaker 1: internationally as well. So while I see some companies to
Speaker 1: suddenly roll out with the product in a foreign jurisdiction,
Speaker 1: we don't do that because we're protecting merchants. We only
Speaker 1: launch in the jurisdiction once I feel comfortable with my
Speaker 1: CLO that we're either licensed fully to do it or
Speaker 1: that we have a legal authority in some other way
Speaker 1: to do it. So it's taken us some time on
Speaker 1: the international piece, but that's certainly something we're working hard
Speaker 1: on and I'm looking forward to to talking more about
Speaker 1: in the near term.
Speaker 2: Oh absolutely, And that totally makes sense, and I think
Speaker 2: it's the right approach because we're seeing across the globe
Speaker 2: different jurisdictions now putting together their rules so to speak,
Speaker 2: and guard rails, So you kind of want to wait
Speaker 2: for some of those things to be ironed out before
Speaker 2: you launch, and like you said, you get to protect
Speaker 2: your customers and folks and make sure everything is good there.
Speaker 1: Amen. Yeah.
Speaker 2: And as far as assets that you support, you mentioned
Speaker 2: stable coins, I'm assuming you support the top stable coins
Speaker 2: and crypto assets. So if I wanted to pay with
Speaker 2: bitcoin or ether things like that, I can do it.
Speaker 1: Yeah. Absolutely. I think we always say ninety nine plus,
Speaker 1: but really it's anything digital. Any digital token that can
Speaker 1: be traded can be spent on the FlexIt platform, and
Speaker 1: so really I look at as kind of infinite. I
Speaker 1: mean we're talking about today. I mean it's funny. When
Speaker 1: we launch flex I think there maybe were two thousand
Speaker 1: different tokens maybe, and today there's just a ridiculous amount
Speaker 1: of token, not all of them being traded, of course,
Speaker 1: but there's tens of thousands of tokens today. We could
Speaker 1: create a token right now in the time it takes
Speaker 1: to do the next fifteen minutes of this podcast if
Speaker 1: we wanted to. So, tokens are popping up everywhere, and
Speaker 1: we never wanted to strip merchants of optionality. So we
Speaker 1: think all tokens should be spendable and We're going to
Speaker 1: keep it that way. So yeah, of course bitcoin you
Speaker 1: can spend on our network right now, ether of course,
Speaker 1: light coin. All the token that folks want to spend
Speaker 1: you can spend, and even some that maybe they don't
Speaker 1: want to spend, like for instance, there's a lot of
Speaker 1: folks that think spending bitcoin is crazy, and that's fine,
Speaker 1: that's up to them. But yet it's been our top
Speaker 1: asset for spending since we founded Flexa in twenty eighteen.
Speaker 1: That is going to change. Folks are spending stable coins
Speaker 1: a lot more now because the Genius Act. And I've
Speaker 1: said this before publicly, but I really think merchant loyalty
Speaker 1: points are going to make a huge play and merchants
Speaker 1: are going to have their own tokens. That to me
Speaker 1: is super exciting. We've been working with some super high
Speaker 1: end merchants and how to roll something like that out.
Speaker 2: I'm very fascinated by that with these businesses, and I've
Speaker 2: been having different conversations with different folks about once we
Speaker 2: have like clarity, these businesses create rewards tokens that could
Speaker 2: be traded in the open market. They can build relationships
Speaker 2: to other business where you can go spend that token.
Speaker 2: There So let's say, for example, it's a Walmart token
Speaker 2: or Amazon token, and I can go to Starbucks and
Speaker 2: spend it. It could trade in the open market. Maybe
Speaker 2: Walmart and Amazon say hey, hold on to witning. You
Speaker 2: can earn rewards like staking. There's a lot of possibilities here.
Speaker 1: So the possibilities, really, to your point, are endless. And
Speaker 1: I think I heard the word clarity commodity are out there,
Speaker 1: and I think that is going to be a driver.
Speaker 1: I mean, we've been waiting for this. It's on the horizon.
Speaker 1: I've personally been to DC too many times to count
Speaker 1: and had too many meetings to count. Genius was great,
Speaker 1: but Clarity is going to be bigger. And I've said
Speaker 1: this too. Tax reform will be the third pillar of
Speaker 1: all this. You give merchants the Genius Act for stable coins,
Speaker 1: Clarity Act, so they actually know which tokens are commodities
Speaker 1: and securities and which tokens they can accept a safe manner.
Speaker 1: And then you give some to tax reform. So it
Speaker 1: was deminimus relief. At least when you're buying, for example,
Speaker 1: a cup of coffee shouldn't be a taxable event. Wow.
Speaker 1: I mean, I know we've been talking to emergants for
Speaker 1: eight years, and I personally know that is an explosive
Speaker 1: moment for digital asset payments. It's what they've been waiting for.
Speaker 1: It's what we've been waiting for so while. We've been
Speaker 1: educating merchants, and I think we've talked to I mean,
Speaker 1: I have to honestly think we've talked to every fortune
Speaker 1: one hundred, if not five hundred merchant in the last
Speaker 1: eight years. I mean, over ninety percent of them has
Speaker 1: shown excitement about digital asset payments. It doesn't mean they're
Speaker 1: all ready to launch. We've worked with some of them
Speaker 1: for five plus years getting them ready to launch. I
Speaker 1: think twenty twenty six will be big in that regard.
Speaker 1: Some folks are getting ready to launch, and a lot
Speaker 1: of that is because of Clarity. A lot of that
Speaker 1: is because the promise of clarity right now that they're
Speaker 1: really looking at it more seriously, so you you convert
Speaker 1: that promise into an actual law. I couldn't be more excited.
Speaker 2: Yeah, it's gonna be an exciting time and I can't
Speaker 2: wait to see the innovation post that bill being passed
Speaker 2: or signing to law, and the clarity people will have
Speaker 2: to invest more build and do a lot of innovation.
Speaker 1: Yeah, yeah, yeah.
Speaker 2: Now you mentioned, you know stable coins, you expect that
Speaker 2: to grow as far as payments being used. You know,
Speaker 2: we got the Genius Act in place and so forth. Yeah,
Speaker 2: and you mentioned, you know there's some people, well good
Speaker 2: amount of people that use bitcoin. But do you think
Speaker 2: over time it becomes more so heavy weighted stable coins
Speaker 2: versus these other assets, or maybe bitcoin catches up because
Speaker 2: Bitcoin's price continues to go up, that spending a fee
Speaker 2: s of Toshi's it becomes like nothing because the price
Speaker 2: is so high.
Speaker 1: Yeah. I think there will always be folks spending bitcoin
Speaker 1: because that was the original promise of bitcoin. It's supposed
Speaker 1: to be a payment token. I think, you know, the
Speaker 1: real bitcoin folks want to use bitcoin for that purpose,
Speaker 1: and they always will. To your point, it won't be
Speaker 1: maybe a lot and they're going to hold the bulk
Speaker 1: of their assets in that form, but yeah, they'll always
Speaker 1: spend it. It won't be the real spending driver. Though
Speaker 1: stable coins are already accomplishing that. They're catching up quite quickly.
Speaker 1: I mentioned Bitcoin's always been the most spent token on
Speaker 1: our platform. That's changing quickly because of stable coins. And
Speaker 1: again I can't understate, you know, speaking with merchants, loyalty
Speaker 1: points and merchant tokens haven't even begun. Yeah, that's a
Speaker 1: whole new game, and that's going to unlock so much.
Speaker 1: And there's you know, you can brainstorm, as you have
Speaker 1: already here today, how you can use loyalty points in
Speaker 1: the form of tokens and merchant tokens themselves to incentivize consumers,
Speaker 1: to reward consumers, and to increase payments. And we haven't
Speaker 1: talked about this, but you know, one of the things
Speaker 1: we've done at Flexa because we've built this payment platform
Speaker 1: the way we have, we've now opened up commerce for everybody.
Speaker 1: No longer are you restricted from participating in e commerce
Speaker 1: because you don't have the right credit score, you can't
Speaker 1: get the right credit card, you don't have a bank account,
Speaker 1: or your underbank or underbanked. No longer are those hurdles,
Speaker 1: which means instead of something like you know, seventy eight
Speaker 1: to eighty four percent of the population participating in commerce,
Speaker 1: now you're talking about ninety nine plus percent of the
Speaker 1: global population participate to participate in commerce through payments, which
Speaker 1: is also a game changer. So you combine that with
Speaker 1: what we're talking about in loyalty points and merchant tokens.
Speaker 1: This thing is just it's too massive to even imagine
Speaker 1: right now, and that gives us a lot of excitement
Speaker 1: as this year ends we move into twenty twenty six.
Speaker 1: That gives us so much excitement about FLEXA and that's
Speaker 1: why we're heads down building as hard as fast as possible.
Speaker 2: Oh. Absolutely, tell us a bit about liquidity, because maybe
Speaker 2: we're certain assets outside of Bitcoin. You know, Bitcoin like
Speaker 2: the most liquid acid in crypto. But like let's say
Speaker 2: you go down to listen, you're supporting some all coins.
Speaker 2: It may not be as popular, but when you get
Speaker 2: the liquidity. Are you working with different exchanges?
Speaker 1: Yeah, so we work with exchange partners. Coinbases an exchange
Speaker 1: partner of ours, Gemini is an exchange partner of ours.
Speaker 1: We work with other exchanges as well. You know, I'm
Speaker 1: in the process of lining that up that same thing internationally,
Speaker 1: so we'll always have exchange partners for that piece of it.
Speaker 1: But I can tell you related to that as the
Speaker 1: app token, So we created AMP to be a collateral
Speaker 1: token to backstop all of our payments and the utility
Speaker 1: it serves cannot be understated here. I don't know that
Speaker 1: there's a Flexa without app, because what other folks are
Speaker 1: trying to do is build digital asset payment rails that
Speaker 1: are not collateralized, which means you give merchants a horrible choice.
Speaker 1: You know, they really have this problem, what if the
Speaker 1: transaction fails or what if the network fails. So some
Speaker 1: of these works are much faster now than they used
Speaker 1: to be, so unlike Bitcoin, it might not take you
Speaker 1: thirty minutes anymore for a transaction to confirm. Maybe it
Speaker 1: takes you a second or less than a second, but
Speaker 1: that doesn't mean that network is going to stay up
Speaker 1: all the time. So how do you protect merchants the
Speaker 1: transaction takes thirty to forty minutes. Well, you can have
Speaker 1: that because you can't sit there with a cup of
Speaker 1: coffee waiting for a transaction to process. And you also
Speaker 1: can't have the risk of a network failing or the
Speaker 1: transaction failing in any way. So other digital asset payment
Speaker 1: platforms say, hey, that's just part of the risk. But
Speaker 1: we've said at Flexus since day one is shouldn't be
Speaker 1: part of your problem, merchant. So the AMP token collateralizes
Speaker 1: every payment. The world's only neutral collateral token. It collateralizes
Speaker 1: every payment that fows for our network, so we can
Speaker 1: promise merchants they will be paid, not only promise, we
Speaker 1: can actually guarantee merchants, every one of them, that they'll
Speaker 1: receive full payments. And we're the only payment platform that
Speaker 1: can do that because we're the only payment platform that
Speaker 1: utilizes the AMP token to collateralize payments. So, you know,
Speaker 1: this thing collect you wrap it all up everything I've
Speaker 1: talked about with any token, any wallet, what's happening with clarity,
Speaker 1: what's happening with merchants developing loyalty tokens and merchant tokens.
Speaker 1: The fact that our rail is completely collateralized by AMP.
Speaker 1: It's a unique payment platform. It's the most unique payment platform.
Speaker 1: And in talking to merchants, you know, once they understand it,
Speaker 1: and sometimes it takes some time, it's really the only option.
Speaker 1: It's the only viable option.
Speaker 2: Oh, it's amazing. Yeah, I can't think of anybody else
Speaker 2: who's doing that with you know, the token setups. That's
Speaker 2: really great.
Speaker 1: Yeah, yeah, nobody else is doing it. I mean it's hard.
Speaker 2: It was hard.
Speaker 1: I mean I've said this before. The work involved in
Speaker 1: pulling this off. It knows no wonder. It's taking eight
Speaker 1: years to get to where we are. The work involved
Speaker 1: in just having a token mature to the point where
Speaker 1: it's used in a utility form like this, to have
Speaker 1: that AMP token backstopping flex of payments, you cannot do
Speaker 1: that overnight. You can't do it overnight, especially when you
Speaker 1: go through some of the hurdles we talked about earlier. Yeah,
Speaker 1: we didn't mentioned the pandemic. I mean, that could have
Speaker 1: knocked us out, you know, but for some really loyal
Speaker 1: merce who really love what we were building, I don't
Speaker 1: know where we would have made it through that, because
Speaker 1: you know, we were a brick and mortar in store
Speaker 1: payments only at that point. That prompted us obviously to
Speaker 1: move on online. But yeah, it really took a grind
Speaker 1: from us and really heads down stuff to pull this off.
Speaker 1: And you know that's why I keep coming back with this.
Speaker 1: This is the most excited I've been at Flexa since
Speaker 1: we started, and the future is unbelievably bright. We're just
Speaker 1: trying to figure out how to take advantage of it best.
Speaker 2: Oh for sure, Now I read about FLEXA terminal tells
Speaker 2: you that and if I'm not mistaken. That's launching in
Speaker 2: twenty twenty six.
Speaker 1: Yeah, it is. So that's you know, emvs have what
Speaker 1: one thousands, they're limited to one thousand different assets that
Speaker 1: they can you can spend with it. That makes no
Speaker 1: sense when we're talking about tens of thousands of tokens.
Speaker 1: So FlexIt terminal built in cooperation in partnership with Burner,
Speaker 1: makes it possible for folks to use that terminal for
Speaker 1: immediate crypto still on our payment rail, but it makes
Speaker 1: it possible. It's the actual terminal, so you can make
Speaker 1: those payments. And for us that's critic important because it
Speaker 1: gives again merchants optionality. Certainly not required. Nothing is required
Speaker 1: from a merchant. If they want to take digital asset payments,
Speaker 1: they don't need a terminal, they don't need to do anything.
Speaker 1: We integrate with their point of sale directly, and that
Speaker 1: will always be true. It's just another piece to give
Speaker 1: merchants optionality, so they'd accept payments in that way if
Speaker 1: they want to. And it may be a critically important
Speaker 1: piece because folks are used to that and I like
Speaker 1: to do that, and some merchants want it. So you know,
Speaker 1: this is the truth. If a merchant wants something in
Speaker 1: this space, We're going to deliver it for them.
Speaker 2: Danny. There's an interesting kind of movement happening with crypto
Speaker 2: where it's human behavior tokenized on the blockchain and a
Speaker 2: financialized and people call it meme coins. Right, So you
Speaker 2: could take something from culture that is maybe weird or funny,
Speaker 2: but the masses are human psychology gravitates to it. And
Speaker 2: sure some of it may not be for you or me, right,
Speaker 2: some of it is just Internet culture. But there's things
Speaker 2: like doche coin and fart coin. But the build a
Speaker 2: brand and a following, and you have network effects. So
Speaker 2: how do you You may have touched a bit on this,
Speaker 2: but how do you navigate that to say, hey, look
Speaker 2: there's a big demographic that's backing this coin. It's the
Speaker 2: craziest thing ever. But there's people hold it and merchase
Speaker 2: want to accept it, so we're going to facilitate it.
Speaker 1: Yeah. I mean I look at it first from the
Speaker 1: legal perspective, which is if coinbase and Gemini support the token.
Speaker 1: I rely a lot on their teams to make sure
Speaker 1: something is first of all, legally permissible to be traded,
Speaker 1: let alone spent at point of sale. With one of
Speaker 1: our merchants, and then we have our own token review
Speaker 1: committee at Flexa. So every token that we allow to
Speaker 1: be spent on our platform has gone through not only
Speaker 1: the coinbase and Gemini review, but our Flexa internal review
Speaker 1: before it gets to the point where it can actually
Speaker 1: be spent. Other than that, honestly, it could be anything.
Speaker 1: It really could be. I mean, I draw the line
Speaker 1: at hate speech. There's something that's promoting hate speech or
Speaker 1: something like that. As long as I'm CEO of Flexa,
Speaker 1: nobody's going to be able to spend it. But other
Speaker 1: than that, no, if it's popular, if it's doge, or
Speaker 1: if it's something that folks get behind and they love it,
Speaker 1: even even no one's asked, but even furt coin, you
Speaker 1: will make it spendable if enough people want it to
Speaker 1: be spendable, and more importantly, if our merchant wants it
Speaker 1: to be spendable. Yeah. So, yeah, we don't want to
Speaker 1: limit this. We built this so anything digital can be spent,
Speaker 1: and I mean it that way. I mean, even you
Speaker 1: look at tokenization of assets, which is going nuts right now.
Speaker 1: I think right now you're kind of in that post pilot,
Speaker 1: early production phase of tokenization of assets. But that's happening.
Speaker 1: I mean, most major banks, most major even real estate
Speaker 1: companies are looking at tokenization of assets in a very
Speaker 1: real way. There's no reason why tokenize assets. If they
Speaker 1: can be traded, they should be able to be spent,
Speaker 1: and they can be We're already built so they can
Speaker 1: be that flexous. So this is just another example of
Speaker 1: building flexa the right way. So any asset, any digital asset,
Speaker 1: can be spent. And that's again for merchant optionality primarily
Speaker 1: exciting days.
Speaker 2: Yeah, it's so fascinating because there's so many possibilities. And
Speaker 2: you know, one of the things I thought about as
Speaker 2: we're having this conversation when you have these meme coins, Look,
Speaker 2: there's a certain demographic in the public that will hold it.
Speaker 2: There's a community, but I think there are merchants, there
Speaker 2: are businesses. So if you run a comedy show or
Speaker 2: you do something that's funny or lighthearted, right, that's a
Speaker 2: great demographic to tap into it. Accept that coin because
Speaker 2: it's you know, from a brand resonance standpoint, it's on point. Now,
Speaker 2: if you're a Fortune five hundred company, you may not
Speaker 2: want to accept far coin, right, but hey, that's okay.
Speaker 2: There's different verticals, different cohorts right as it would.
Speaker 1: Yeah. I mean it's important to realize too that FLEXA
Speaker 1: doesn't require the merchant to accept any specific coin. For example,
Speaker 1: a merchant wants to take USD only we're licensed to
Speaker 1: pull that off. Not every digital payment platform is. Like
Speaker 1: some would say, sorry, we don't have the money transmit
Speaker 1: your license, or we're not a money services business. Thankfully,
Speaker 1: we built that in the beginning, so merchants can accept
Speaker 1: USD if they want to. In fact, you could spend
Speaker 1: bitcoin at point of sale. The merchant could take light coin,
Speaker 1: they could take any asset they want because of our platform.
Speaker 1: So if it's it's USDA USD one day and ether
Speaker 1: of the next and bitcoin the next, that's fine by us.
Speaker 1: So truthfully speaking, someone could spend four coin and the
Speaker 1: merchant does not need to hold that.
Speaker 2: Yeah, and obviously we're using forty coin as an example, right,
Speaker 2: but it could be the other stuff. It could be
Speaker 2: I don't know, a monkey coin or something and a
Speaker 2: zoo accepts it.
Speaker 1: Yeah why not? Why not? Man? No, I think sky's
Speaker 1: the limit. And that again, you're going to exactly what
Speaker 1: we talk about, which is optionality. Merchants should be able
Speaker 1: to do what they want it should be for them,
Speaker 1: you know, gone or the days when the debit and
Speaker 1: credit rails kind of dictate to merchants what they're going
Speaker 1: to pay and how they're going to accept. I mean
Speaker 1: those things, you know, those old, ancient, broken analog debit
Speaker 1: and credit rails invented some thirty years before the internet
Speaker 1: costs this country two percent of his GDP annually. Seven
Speaker 1: hundred billion dollars annually is a social cost of payments
Speaker 1: on those broken out of date, analog, really antique payment rails.
Speaker 1: So those should have been gone a long time ago.
Speaker 1: We think you're at flex so they have a shelf
Speaker 1: life of maybe ten to twenty years and then they're
Speaker 1: just gone. And we're doing everything in our power to
Speaker 1: make that timeline come quicker.
Speaker 2: So on that note, Danny, because one of my questions
Speaker 2: for you is going to be it's twenty thirty five,
Speaker 2: how do you see crypto in payments and the economy,
Speaker 2: and what's your like predictions? You know, and obviously we
Speaker 2: won't hold it to you, but you know, well, how
Speaker 2: do you see the future of payments? So I'm the
Speaker 2: one here that thinks it is going to be ten years,
Speaker 2: not twenty.
Speaker 1: I always pushed that faster, and I just again, I
Speaker 1: look at what's happened in stable coins since Genius, which
Speaker 1: was only in July. That just happened in July, and
Speaker 1: we already see these ridiculous numbers about on chain activity.
Speaker 1: So for me, by twenty thirty five, not only will
Speaker 1: all payments be digital asset payments in some way or another,
Speaker 1: but folks won't even know what's happening, just like you know.
Speaker 1: The easiest way to think of it is, folks don't
Speaker 1: think of how they can possibly make a cell phone
Speaker 1: call today, or how you send a text message. You
Speaker 1: just do it. No one's wondering what that technology is,
Speaker 1: or how do you build that? No one today. Everybody
Speaker 1: wonders about crypto. How does this work? Why is this working?
Speaker 1: Is it safe? It's scary. This is a scary thing.
Speaker 1: I thought it was for you know, money laundering and
Speaker 1: funding terrorism and it once they learned that, no, no, no,
Speaker 1: of course, any asset can be used for those things,
Speaker 1: but crypto is probably the dumbest asset to use for
Speaker 1: those things because it's all public and unschained. But once
Speaker 1: you start to educate folks and they learn about the technology,
Speaker 1: how much faster it is, how more inclusive it is,
Speaker 1: how much safer it is, the privacy protection features this
Speaker 1: which we haven't even talked about. Every bit of it
Speaker 1: is better. Merchants are learning that. Most merchants already know that.
Speaker 1: They're just rolling it out over time. Consumers won't even know.
Speaker 1: As the UX gets better, consumers won't even know what's happening.
Speaker 1: It's going to be as easy or easier than their
Speaker 1: current payment flow to be faster, you know, just work,
Speaker 1: and it's going to be better. It already is better.
Speaker 1: It's just not fully adopted yet. So by twenty thirty five,
Speaker 1: I think it's completely taken over payments. I wouldn't be
Speaker 1: surprised if you know, the visas, amexs and master cards
Speaker 1: of the world have gotten a board too late. Everything
Speaker 1: they're trying to do right now isn't crypto payments. It's
Speaker 1: it's it's crypto on roads and off ramps, using those
Speaker 1: ancient analog payment rehels, which are broken and costs the
Speaker 1: seven hundred billion dollars annually nobody wants. Nobody wants. So yeah,
Speaker 1: I look forward to twenty thirty five and maybe sooner.
Speaker 2: Yeah, it's gon exciting time and to your point of consumer,
Speaker 2: most of the people won't know that the stable points are.
Speaker 2: Blockchain tech is running behind the scenes right now and
Speaker 2: obviously as they the crypto acid class grows and there's
Speaker 2: more holders. Uh what you guys are doing? Will you
Speaker 2: know if I want to spend my big winner in
Speaker 2: my Ether or Solona or whatever it is, I could
Speaker 2: have that optionality. It'll be very seamless.
Speaker 1: Absolutely, yeah, for sure.
Speaker 2: Now you mentioned you got some launches coming up in
Speaker 2: twenty twenty six, we got the Terminal launch. Is there
Speaker 2: anything else on your road map that you want to highlight?
Speaker 1: So what we've been really focused on as merchants. So
Speaker 1: we've been working with merchants for literally eight years, so
Speaker 1: some of them we've been talking to seven plus cheers,
Speaker 1: And what I'm excited about is finally bringing those merchants
Speaker 1: out of kind of hiding and getting them rolling with
Speaker 1: digital asset payment acceptance. So we're focused on that. We
Speaker 1: have our product about where we want it for next year.
Speaker 1: We've been refining a few things, so whether it's payment pages,
Speaker 1: payment clips, payment links, there's a number of different ways
Speaker 1: merchants can accept digital asset payments through Flex's platform and
Speaker 1: with what we've done on our SDK, so any wallet
Speaker 1: can integrate and use our payment platform. We really feel
Speaker 1: like we're in a good place now with merchants and
Speaker 1: as they learn more about AMP, which takes some time,
Speaker 1: because again we're the only one collateralizing payments and that's
Speaker 1: a weird topic right by the way, all your payments
Speaker 1: are collateralized by this token called AMP that folks can
Speaker 1: buy globally and pledges collateral. There's a bit of a
Speaker 1: break there. Wait, how does that work? How does that
Speaker 1: possibly work? So by the time they learn or it's
Speaker 1: you know, to a merchant, they absolutely love it, but
Speaker 1: it takes time to educate. But for us, what that
Speaker 1: means is it's just this twenty twenty six should be
Speaker 1: just this year of bringing merchants on, turning them on,
Speaker 1: getting them ready new jurisdictions internationally, with new merchants and
Speaker 1: new and bigger merchants here at home.
Speaker 2: Danny, I don't know if this makes sense for your business,
Speaker 2: but it's something that I'm waiting to see someone solve,
Speaker 2: and that is micro payments for streaming and web monetization
Speaker 2: and so forth. Is have you guys thought about anything
Speaker 2: like that.
Speaker 1: One hundred percent. So that's part of everything that I'm
Speaker 1: talking about. And so yeah, when I say merchants, I'm
Speaker 1: not just talking about the traditional fortune one hundred is
Speaker 1: who we are working with and talking to, and that's
Speaker 1: part of what I'm talking about. But I'm talking about
Speaker 1: all the above, right, So it might be in the
Speaker 1: infrastructure you're talking about, it could be in gaming, it
Speaker 1: could be pretty much anywhere that payments are made in
Speaker 1: any format, in any ecosystem. We've been building that for
Speaker 1: two years. I said this in a post once and
Speaker 1: I exposed that we you know, we were processing stable coin,
Speaker 1: but it's five to six years before anybody else was,
Speaker 1: quite frankly, so when Genius rolls out, that was kind
Speaker 1: of old news to us. We've been stable coins we
Speaker 1: used for payments on our platform forever, and I think
Speaker 1: we're about five years ahead of everybody else on the
Speaker 1: other payment ecosystems that exist out there, which for us
Speaker 1: at Flex is hugely exciting. It's exciting for our merchant partners,
Speaker 1: and it's part of the reason I look forward to
Speaker 1: twenty twenty six so much.
Speaker 2: That's awesome, Danny, you've been in this industry for a
Speaker 2: long time, So I'm curious to get your take on
Speaker 2: the amount of Tradify Wall Street institutions now entering crypto banks,
Speaker 2: the major investment firms. It's incredible. Many of them were
Speaker 2: anti crypto for a long time. Now they've completely done A.
Speaker 1: One to eighty and Aaron Brace yea, I've kind of
Speaker 1: always called bullshit on that. Excuse my friendship. They were
Speaker 1: publicly anti crypto, but we were meet I was a
Speaker 1: meeting with them in twenty eighteen nineteen. They were all building,
Speaker 1: they were all learning, They all knew exactly what was coming.
Speaker 1: Some of them had these black sites where they wouldn't
Speaker 1: have it in their building. They would have it literally
Speaker 1: a hidden office where you'd meet with the crypto teams
Speaker 1: in twenty eighteen, twenty nineteen. So, y know, we all
Speaker 1: know the famous ones who say they ate crypto. Well,
Speaker 1: they've been building for ten years. So I'm not shocked
Speaker 1: by any of this. I don't think anybody should be.
Speaker 1: They're not only ready, but they're gonna launch all of them,
Speaker 1: and they know they have to because it's really simple.
Speaker 1: They know the technology is better.
Speaker 2: Oh yeah, and it's incredible. They are launching ETFs, they're
Speaker 2: launching tokenized products, custody stable coins, and much more. You know,
Speaker 2: there's talks of the banks they want to launch their
Speaker 2: own stable coins. How do you think this stable coin
Speaker 2: market plays out? Because there might need to be some
Speaker 2: consolidation here. Everybody in their uncle can have a stable coin. No,
Speaker 2: everybody and their uncle's going to try to have a
Speaker 2: stable coin right now. It's built though, in genius especially,
Speaker 2: you know, without going into the nitty gritty of the
Speaker 2: regulatory details, it's really hard once you get past a
Speaker 2: certain threshold if you grow too much, you know, for
Speaker 2: you know, it's a bit different than being regulated like
Speaker 2: a bank, but not that different, right, It's it's really
Speaker 2: hard to get to that level and succeed. So there's
Speaker 2: a bit of a first mover advantage in place for
Speaker 2: the usdcas and tether of the world, et cetera. But
Speaker 2: you're going to see stable coins.
Speaker 1: You are going to see them, and there are going
Speaker 1: to be many Who's gonna win that war? I think
Speaker 1: there will be some consolidation. I think there will be
Speaker 1: some deaths, and there's gonna be more than one winner.
Speaker 1: There's gonna be a lot of winners. There's a lot
Speaker 1: of room for everybody. The space is huge, it's international,
Speaker 1: and stable coins folks are finally starting to realize thanks
Speaker 1: to genius. Again, it took regulatory clarity. It took an
Speaker 1: actual law for folks to feel safe enough to learn
Speaker 1: enough to really use it. And that's what's gonna happen
Speaker 1: with clarity. So you go back to that, and that's
Speaker 1: why you're seeing what's happened with stable points happen. So
Speaker 1: to your point, there's gonna be a lot of them.
Speaker 1: Some of them are gonna be bigger winners than others.
Speaker 1: But I just see it as such an open space
Speaker 1: for creative minds that great things will happen.
Speaker 2: Oh for sure. One of the things you've seen in
Speaker 2: the industry is a lot of crypto companies going public.
Speaker 2: There's expecting to be more in twenty twenty six. You
Speaker 2: get the SEC chair talking about making it easy and
Speaker 2: so forth. FLEXA have any plans along those lines that
Speaker 2: you can share.
Speaker 1: No, not right now, And I'm not saying no, I
Speaker 1: won't share it. I'm saying no, we don't have those
Speaker 1: plans right now. You know, my co founder and I Trevor,
Speaker 1: I haven't thought outside of how we best help merchants
Speaker 1: in eight years, so truthfully speaking, you know, we haven't
Speaker 1: even we haven't thought about anything other than how we
Speaker 1: build this platform for merchants, how we best protect AMP,
Speaker 1: and how we best use AMP to callateralize payments. You know,
Speaker 1: for us, it goes hand in hand. It's just for merchants.
Speaker 1: It's just for merchant optionalities, helping them thrive in the
Speaker 1: next air of commerce. And someday in the future, if
Speaker 1: we achieve this great goal of replacing debit and credit
Speaker 1: rails with a far better piece of technology that helps merchants,
Speaker 1: I guess we'll take a breath and think of options then,
Speaker 1: but not right now.
Speaker 2: Yeah, you guys are head sound building right, absolutely? Yeah,
Speaker 2: are you using AI in any way to facilit will
Speaker 2: tate your services?
Speaker 1: So we're a bit slow to that. I was cautious.
Speaker 1: You know, sometimes the lawyer in me comes out and
Speaker 1: delays things here a bit too much. But yeah, we've
Speaker 1: implemented some AI, very carefully implemented some AI and what
Speaker 1: we're building and how we build it. And by the way,
Speaker 1: you know AI aggregators. This is another payment ecosystem there
Speaker 1: that we're working with as well. And we're building for
Speaker 1: so I think there's a lot of opportunity there. I
Speaker 1: just try to be really careful. Again, it's not because
Speaker 1: I want Flexi to be protected, It's because I want
Speaker 1: merchants to be protected. So maybe we're going to roll
Speaker 1: it out kind of carefully and thoughtfully, but it is
Speaker 1: something we're focused on.
Speaker 2: Yeah, oh for sure. I know there's a lot of
Speaker 2: talks of AI agents and that economy and look at
Speaker 2: still at ground level, so we have to figure out
Speaker 2: the rules and regulations around that. But yeah, you can
Speaker 2: imagine they're going to be taking payments and stable coins
Speaker 2: and other assets.
Speaker 1: Yeah, yeah, absolutely, Yeah, and somebody's got to power those payments.
Speaker 1: So yeah, we're focused. Yeah.
Speaker 2: Awesome, d any great stuff. I got some wrap up
Speaker 2: questions here for you. Sure, first, if you could create
Speaker 2: your own metaverse, what would the theme be?
Speaker 1: You know what, I'd go back to nature somehow. I
Speaker 1: like to you know, I do a lot in nature.
Speaker 1: I try to do as interesting. Fact. I don't know
Speaker 1: if everybody knows this, but over ninety percent of human
Speaker 1: existence was spent in the hunter gatherer phase, so we
Speaker 1: have not evolved for what we're living in. We have
Speaker 1: not evolved for this office in Manhattan. We're not here,
Speaker 1: We're not supposed to be So for me, it would
Speaker 1: have to be something in nature, Definitely, something in nature,
Speaker 1: something where I can go fishing in nature.
Speaker 2: Maybe, oh for sure. Yeah, especially in it's this technology
Speaker 2: driven world and digital world and every.
Speaker 1: Us furst right, it's yeah, our bodies biologically we're not
Speaker 1: supposed to be here right now, so I would want
Speaker 1: to use technology to bring.
Speaker 2: Me back absolutely, rapid fire questions. Favorite food, Yeah, it's.
Speaker 1: Got to be pizza. It's got to be pizza. And
Speaker 1: I'm a Chicago guy originally, so for me, it's going
Speaker 1: to be thin cruss, tavern style Chicago pizza.
Speaker 2: Nice. Favorite musician or band.
Speaker 1: I mean Beatles one Beatles, Beetles a kind of my formation.
Speaker 1: Also Beetles led to everything else. So my favorite band
Speaker 1: in college with the Pixies, number of other bands with Pixies.
Speaker 1: Nothing happened without the Beatles to me, nothing, So it's Beatles.
Speaker 2: Nice.
Speaker 1: Favorite movie, favorite movie, Holy hell, So that's impossible. I
Speaker 1: just have too many, too many favorite movies. I mean, immediately,
Speaker 1: what comes to my mind is The Godfather because that
Speaker 1: was my favorite movie for so long. But yeah, too
Speaker 1: many to count.
Speaker 2: Oh, for sure, favorite book that's.
Speaker 1: Even worse than movies. You're killing me Flan O'Brien, Third Policeman,
Speaker 1: probably if I had to limit it to one only
Speaker 1: because the writing is spectacular and the kind of there's
Speaker 1: a bit of a sci fi twist in there to
Speaker 1: a piece of classic literature that I like, So I'll
Speaker 1: go with that one.
Speaker 2: And when you're not working, what are you doing for fun?
Speaker 1: For fun, I'm either out with my wife. We're either
Speaker 1: having a great dinner in a cocktail somewhere here in
Speaker 1: the city, or I'm in nature somewhere fishing. So yeah,
Speaker 1: it's one of those two. It's either. Yeah, it's a
Speaker 1: bit of a yin and yang for me. I'm in
Speaker 1: the city enjoying a good meal, or I'm lost somewhere
Speaker 1: in the Little.
Speaker 2: Danny awesome stuff, Absolute pleasure. I love what you guys
Speaker 2: are building. And you know, we talked a bit about
Speaker 2: before the recording, we're gonna have to do around two
Speaker 2: since we're both near New York, and uh, we're gonna
Speaker 2: do it in person. But thank you so much for
Speaker 2: joining me.
Speaker 1: Appreciate it, Tony, Thank you.
Speaker 2: M